Ryanair posts record annual loss, but sees recovery from Covid-19

Dublin

RYANAIR reported a record annual after-tax loss of 815 million euros (S$1.3 billion) on Monday after Covid-19 restrictions forced it to scrap over 80 per cent of flights, but the Irish airline said there were signs the recovery had begun.

Europe's largest discount airline flew 27.5 million passengers in its financial year ended March, down from 149 million the previous year in what it called the most challenging in its history.

The airline reiterated its forecast that passenger numbers for the current fiscal year would be towards the lower end in the range of 80 million to 120 million passengers.

It expects to fly just 5-6 million passengers in the April-June quarter.

Ryanair said it was impossible to give a formal profit outlook for the year, but added that it "cautiously believed that the likely outcome for FY22 is currently close to breakeven" if the EU vaccine rollout remains on track.

Group chief executive Michael O'Leary said in a pre-recorded presentation that a recent strong increases in weekly bookings suggested the "recovery has already begun" with bookings climbing from around 500,000 per week in early April to 1.5 million per week now.

"If, as is presently predicted, most European populations are vaccinated by September, then we believe that we can look forward to a strong recovery" in the second half of the year, from October to March, Mr O'Leary said.

The annual loss was slightly better than the loss forecast of 834 million euros in a company poll of analysts.

"It's better than we predicted, but still a fairly traumatic loss for an airline that has been consistently profitable for our 35-year history," Mr O'Leary said.

Ryanair fears it may not take delivery of its first 737 MAX aircraft until after its peak summer period and the Irish airline is "quite upset with Boeing" , Mr O'Leary said.

But he said he believed the production issues would resolve in the medium term and said the Irish airline was in talks with Boeing about a significant order of the larger, 230-seat, MAX 10 aircraft.

The largest European customer of the MAX with 210 firm orders of the 197-seat MAX200 model, Ryanair in late March said it expected that before summer it would take delivery of 16 of the aircraft, down from an earlier forecast of 40.

But Boeing is now promising the first delivery of the jet, which has been delayed in part due to a recent electrical grounding issue, in late May. "We are now being told the first delivery will be in late May. I am not sure we necessarily believe that," Mr O'Leary said.

"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," he said.

Ryanair was initially due to take delivery of its first MAX two years ago before the jet was grounded for 20 months after two fatal crashes. The airline has agreed "reasonable and fair" compensation for that delay, it said.

Ryanair is confident that it will have 60 of the aircraft in place for the summer of 2022, he said. Ryanair remains in talks with Boeing for a significant order of the larger MAX 10 aircraft, but "we are not quite there on price yet", chief financial officer Neil Sorahan said in an interview.

Asked how big such a deal would be, Mr Sorahan said it would cover both fleet renewal and growth in the 2026 to 2030 period. "We don't tend to do small deals," he said. REUTERS