Ryanair Q1 losses widen but traffic forecast lifted
By Michele Maatouk
Date: Monday 26 Jul 2021
(Sharecast News) - Budget airline Ryanair reported a widening of its first-quarter losses on Monday as it continued to be impacted by Covid restrictions, but lifted its traffic forecast as bookings have surged in recent weeks.
The company's first-quarter losses widened to €273m from €185m in the same period a year ago. It said Covid-19 continued to "wreak havoc" on its business, with most Easter flights cancelled and a slower-than-expected easing of EU government travel restrictions into May and June.
However, traffic recovered to 8.1m from 0.5m as demand picked up in May and June.
Ryanair said revenue jumped to €371m from €125m, with ancillary revenue performing well, generating around €22 per passenger, as more guests chose priority boarding and reserved seating. However, this was outweighed by a 116% increase in operating costs to €675m, driven mainly by variable costs such as fuel, airport & handling and route charges.
Still, the airline lifted its traffic forecast for FY22 to between 90m and 100m, having previously guided at the lower end of an 80m to 120m passenger range and said it cautiously expects that the likely outcome for FY22 is "somewhere between a small loss and breakeven".
"This is dependent on the continued rollout of vaccines this summer, and no adverse Covid variant developments," it said.
Chief executive officer Michael O'Leary said: "Significant uncertainty around travel green lists (particularly in the UK) and extreme government 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 and the scrapping of quarantine for vaccinated arrivals to the UK from mid-July has seen a surge in bookings over recent weeks."
At 0850 BST, the shares were up 3.6% at €16.29.
Laura Hoy, equity analyst at Hargreaves Lansdown, said: "Unfortunately, Ryanair is still at the mercy of the virus and, although a recovery is materialising, the group noted that travel within Europe will be depressed for the foreseeable future. We're encouraged by the group's progress, but it may have to toe the precarious line between low fares and high costs for some time."
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