Ryanair has reported a loss of €48 million for the six months to end September 2021 (H1 FY2021), compared to the previous H1 period loss of €411 million. Total revenue rose to €2.15bn from €1.18bn in the prior-year period thanks to the rebound in H1 traffic by 128% from 17.1 million to 39.1 million, with a load factor of 79% compared to 72% in the previous year. Ryanair’s ancillary revenue continued to perform strongly, generating over €22.50 per passenger, as guests choose priority boarding and reserved seating.
As traffic doubled, costs pushed up by 63% to €2.2bn for the reporting period due to lower variable costs such as aircraft, airport & handling, route charges and fuel. Lower costs, coupled with rising load factors, led to a marked reduction in cost per passenger (ex-fuel) to €38, said Ryanair, adding that it expects further improvements in costs as more 737-8200 are delivered and airports and other suppliers rollout Covid recovery incentive schemes.
Ryanair has hedged 80% of its fuel requirements for Q4 FY22 (50% jet swaps at $580, with the balance hedged with caps at $750 per met. tonne). H1 FY23 is 80% hedged (60% jet swaps at $620 and 20% caps at $715) and H2 FY23 is 60% hedged at $625. Carbon credits are fully hedged for FY22 and 70% hedged for FY23 at €24 and €40 per EUA respectively.
Ryanair's Michael O'Leary, said: “Following a very badly disrupted Q1, which saw most Easter flights cancelled and a slower than expected easing of EU Govt. travel restrictions in May and June, traffic rebounded in Q2 with the successful rollout of the EU Digital Covid Certificates (DCC) in July. H1 bookings were mostly "close-in" and required price stimulation, particularly to/from the UK where consumer confidence was undermined (until early Oct.), by the UK Govt.'s confusing and inconsistent traffic light system. In recent weeks, we have seen a surge in bookings for the Oct. mid-term and Christmas breaks and we expect this peak buoyancy to continue into Easter and S.22. We will continue our load active/yield passive recovery strategy as we rebuild load factors (consistently above 80% in Q2) and, in time, yields over the second half of FY22.”
Also during the period, Ryanair retained a strong cash position at €4.24bn, up from €3.15bn at 31 March. In May, Ryanair closed a €1.2bn five-year unsecured bond issued at record low 0.875% coupon. In June the Group repaid its (2014) maturing €850m 1.875% bond and last week repaid its CCFF £600 million loan in October helping to reduce its net debt from €2.28bn at 31 March to €1.50bn at 30 September.
During second quarter, the Group agreed to sell its 10 oldest 737NGs - two of which were delivered in Sept. with the remainder set to exit the fleet before the financial year end. “The strength of Ryanair's balance sheet ensures that the Group can capitalise rapidly on the many growth opportunities that exist in Europe in the post Covid-19 recovery,” said O’Leary.
Ryanair also announced that it was considering delisting its shares on the London Stock Exchange (LSE), where it says trading as a percentage of overall trading volume in Ryanair's ordinary shares has “reduced materially during 2021”. O’Leary commented: “The migration away from the LSE is consistent with a general trend for trading in shares of EU corporates post Brexit and is, potentially, more acute for Ryanair as a result of the long-standing prohibition on non-EU citizens purchasing Ryanair's ordinary shares being extended to UK nationals following Brexit. The Board of Ryanair is now considering the merits of retaining the Standard listing on the LSE.”
Ryanair has a primary listing on the regulated market of Euronext Dublin, which offers shareholders the highest standard of protection, including compliance with the UK Corporate Governance Code, and its ADRs are listed on NASDAQ.
Ryanair stated that the providing meaningful guidance for the remainder of the FY22 is challenging but stated that it believes FY22 traffic has improved to just over 100m and (subject to winter fares) expects to record an FY22 loss of between €100m to €200m.
Ryanair will take delivery of 210 737-8200s aircraft over the next five years which Ryanair says will enable the airline to uniquely to accelerate growth into the post Covid-19 recovery. “As announced at its AGM in Sept., Ryanair Group now expect to deliver accelerated growth over the next five years, with the growth forecast raised from 33% to 50%. As a result, Ryanair's pre-Covid traffic of 149m is expected to grow to over 225m guests p.a. by March 2026 (previously targeted at 200m p.a.),” said O’Leary.