Ryanair Holdings has reported a first quarter (Q1) 2021 loss of €273 million, compared to a prior year Q1 loss of €185 million.
The low-cost airline reported that Q1 traffic rebounded from 0.5 million to 8.1 million as capacity recovered in May and June. Revenue climbed to €371 million during the period, but with higher operating costs - driven primarily by variable costs such as fuel, airport & handling and route charges – the loss widened from the prior year.
Ryanair retained a strong June cash balance of €4.06bn up from €3.15bn at 31 March, boosted by the successful issuance of its €1.2bn 5-year unsecured bond issued in May at record low 0.875% coupon.
The airline’s net debt fell from €2.28bn at 31 March to €1.66bn at 30 June (with the €850m bond repaid in June).
“Covid-19 continued to wreak havoc on our business during Q1 with most Easter flights cancelled and a slower than expected easing of EU Govt. travel restrictions into May and June,” said Ryanair Holdings Group CEO, Michael O'Leary. “Significant uncertainty around travel green lists (particularly in the UK) and extreme Govt. caution in Ireland meant that Q1 bookings were close-in and at low fares. We kept aircraft and crews current throughout the quarter and recruited additional cabin crew to enable us recover quickly in Q2 as Covid restrictions ease. The 1st July rollout of EU Digital Covid Certificates (DCC) and the scrapping of quarantine for vaccinated arrivals to the UK from mid-July has seen a surge in bookings over recent weeks. Pricing remains below pre Covid-19 levels and there will continue to be great value for Ryanair guests travelling this summer as we focus on recovering traffic, jobs and tourism across our European network. Based on current (close-in) bookings, we expect traffic to rise from over 5m in June to almost 9m in July, and over 10m in Aug., as long as there are no further Covid setbacks in Europe. We will continue our load active/yield passive strategy as we recover load factors over the course of FY22.”
O’Leary again criticised the state aid provided to many rivals that he says, “will distort EU competition and prop up high cost, inefficient, flag carriers for many years”, adding that the loss of EU capacity however will provide Ryanair with “growth opportunities for Ryanair to extend airport incentives, as the Group takes delivery of 210 new Boeing 737 "Gamechanger" aircraft”.
He also noted that the company was “encouraged” by the high rate of vaccinations across Europe, and that if as is presently predicted, most of Europe's adult population is fully vaccinated by Sept., “we believe that we can look forward to a strong recovery in air travel for the second half of the fiscal year and well into S.22 - as is presently the case in domestic US air travel”.
Ryanair states that the company is seeing a strong rebound of pent up travel demand into Aug. & Sept. that it expects to “continue into the second half of FY22, with pre Covid-19 growth planned to resume strongly in summer 2022.