Dublin: Ryanair Holdings said losses are set to worsen this winter as a new wave of coronavirus lockdowns frustrates attempts to bring back flights at Europe's biggest discount carrier.
The shortfall in the fiscal second-half, which began on October 1, is set to exceed the 197 million-euro ($229 million) loss of the first six months, Ryanair said in a statement. By comparison, the Irish firm recorded a profit of 1.15 billion euros in summer 2019.
Airlines across Europe have been paring back already reduced schedules as a resurgence in the virus prompts a return of restrictions. Dublin-based Ryanair is planning to offer 40 per cent of its usual capacity this winter and said the figure could drop further, with full-year passenger numbers also potentially falling below forecast levels.
A long winter
"It's going to be a challenging winter," with a "question mark" over whether there will be much flying over Christmas, Chief Financial Officer Neil Sorahan said. Airlines make most of their money over the summer, so the period is already weak for yields or fares, he said.
Ryanair is responding by extending efforts to cut costs beyond temporary pay reductions for staff that it's already agreed, the CFO said, although the carrier can't rule out further job losses. The Stoxx 600 Travel & Leisure Index, which includes airlines and hospitality companies, has declined 33 per cent this year, making it among the worst performing sectors.
UK is still on
Sorahan said that Ryanair intends to operate its previously announced schedule in the UK, the company's biggest market, despite a lockdown announced at the weekend that will see leisure travel effectively ruled out from Thursday.
Ryanair says it sees a release in pent-up demand whenever restrictions are eased, including a recent surge in bookings after the UK added the Canary Islands to an approved-travel list, flights people may no longer be able to take.
Ryanair said it expects to receive its first Boeing Co. 737 Max jets early in the new year after the model grounded in the wake of two fatal crashes returns to service in the fourth quarter. The carrier, which has 135 orders for the high-density Max-200 variant, expects to have 30 of the planes by next summer.
The carrier is still in discussions with Boeing for a follow on order for new planes, Sorahan said.