Published on May 17th, 2021 | by Alan Dwyer0
Ryanair Announce €815m loss
Ryanair has released their financial records for the FY21 (Fiscal Year 2021), showing a loss of €815 million with traffic figures down 81% due to the COVID-19 pandemic. The airline had reported a €1 billion profit in the previous financial year. Across the network, the airline carried 27.5 million passengers up to 31st March 2021 operating with a 71% load factor. This was down from 148.6 million with a 95% load factor in the previous year. The last year has been the most challenging in Ryanair’s 35-year history.
Although there was a partial recovery during summer 2020, as initial lockdowns eased, however a second Covid-19 wave in Europe in the autumn with the third wave in spring caused untold disruption to future bookings and fleet planning. The airline minimised job losses through agreed pay cuts and participation in Government job support schemes, while at the same time keeping as many of the pilots, cabin crew and aircraft current and ready to resume service once normality returns.
Ryanair expects intra-European air travel capacity to be materially lower for the foreseeable future. This will create opportunities for Ryanair to extend airport growth incentives, as the Group takes delivery of 210 new Boeing 737-8200’s. The rollout of the vaccines and the European vaccine passport will help to facilitate the resumption of intra-Europe air travel and tourism this summer.
Speaking in a video presentation of the Group’s results, Michael O’Leary said, “The likely outturn is that we are looking at something between a very small loss and break-even for the next 12 months but there are a lot of moving parts and there is a lot of uncertainty. Most of the uncertainty revolves around the timing of the recovery and the fares that people will pay into the key June, July, August, September travel period.”
Ryanair saw its revenue fall by 81% to €1.64 billion during the year, in line with the fall in traffic to just 27.5m from 149m the previous year. Ancillary revenue delivered a solid performance as more customers chose priority boarding and reserved seating, resulting in an 11% increase in per-passenger spends to almost €22. Due to an 81% reduction in traffic and aircraft delivery delays, the Ryanair Group recorded a €200m ineffectiveness charge on fuel and currency hedges during the year. During the year, Ryanair agreed on some long term agreements with several of its airport bases ensuring the future ability to offer low-cost fares across the network. The Group also increased its order with Boeing for more of the new Boeing 737-8200 aircraft from 135 to 210 and they revealed they received “further and modest, price discounts” on the list prices. The new aircraft has 4% more seats, 16% lower fuel burn and 40% lower noise emissions and will enable the Ryanair Group to grow to 200m passengers per year in the coming years. It is likely the first of the new aircraft will now arrive before the end of May, having previously been expected in mid-April. However, Michael O’Leary did say that “We are now being told the first delivery will be in late May. I am not sure we necessarily believe that. As the management team in Seattle continues to mismanage that process I think there is a real risk we might not see any of these aircraft in advance of summer 2021.”
The airline claims that its balance sheet remains one of the strongest in the industry with a BBB credit rating (S&P and Fitch), with reserves of €3.15 billion cash at 31st March and over 85% of the Boeing 737 fleet being unencumbered. In their forward looking statement for the year ahead, the airline is hopeful that lockdowns and restrictions will be eased. The airline expects to carry only around 5-6 million passengers during the first quarter with future bookings being made much closer to departure dates. Although there has been a significant increase from a very low starting point in early April. The airline expects their passenger numbers across the Group to be near the lower end of their previously forecasted 80-120 million.