Ryanair has warned of a “hugely uncertain” financial outlook, even as the budget airline geared up to run more flights this summer than before the coronavirus pandemic struck.
The Irish-listed carrier made a loss of €96m (£80m) in the last three months of 2021, although that was a significant improvement over the €321m loss in the same period in 2020, when strict international travel restrictions were still in place. Revenues quadrupled compared with last year, it said in its third-quarter results update.
Ryanair added that the first three months of 2022 will require “significant price stimulation at lower prices” to attract customers, which could hit profits. That uncertainty, plus the possibility of new restrictions if another variant of concern were to arise, meant the airline left unchanged its guidance for a loss in the year ending in March, at €250m to €450m – a wider than usual range.
The airline blamed “media hysteria” over the Omicron variant for missing its target of 11 million passengers in December, instead carrying 9.5 million. The Omicron variant has proved to be more infectious than earlier dominant variants but widespread vaccines have meant that many governments, including in the UK, have started to loosen some of the stricter travel requirements.
That has allowed Ryanair to plan for a summer bookings boom, with a schedule for 2022 that is 114% of 2019, the last year unaffected by the pandemic. It also plans to grow to 225 million passengers a year by 2026, an increase from the previous prediction of 200 million, compared with a pre-Covid-19 peak of 149 million.
Michael O’Leary, Ryanair’s chief executive, said: “This outturn is hugely sensitive to any further positive or negative Covid news flow and so we would caution all shareholders to expect further Covid disruptions before we here in Europe and the rest of the world can finally declare that the Covid crisis is behind us.”
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In the longer term, Ryanair is banking on a big increase in the number of flights, using its relative financial strength to win market share. It has taken delivery of 41 Boeing 737 Max aircraft following years of delays after design flaws caused two fatal crashes.
O’Leary has repeatedly described the Boeing 737 Max as a “gamechanger” for the airline, offering lower costs and lower carbon emissions per flight. However, it acknowledged that the 50% growth over the next five years would be accompanied by only a 16% reduction in fuel use per new plane. It hopes to cut fuel use per passenger over the next decade but emissions reduction plans will heavily depend on synthetic fuels, which are not currently available at scale.
Gerald Khoo, an analyst at Liberum, a stockbroker, said: “Ryanair is positioned for a strong recovery, with planned summer capacity at 114% of 2019 levels.”