1st Feb 2021 06:58
(Alliance News) - Ryanair Holdings PLC posted a sharp third-quarter swing to loss on Monday and the airline again hit out at "unlawful state aid" of European flag carriers as the aviation industry remains mostly grounded by Covid-19.
The budget carrier's traffic around the Christmas and New Year period was "severely impacted" by travel restrictions as many governments in Europe imposed curbs on UK arrivals to stem the spread of a more contagious variant of Covid-19.
In its financial third quarter ended December 31, Ryanair's revenue plunged 82% year-on-year to EUR341.2 million from EUR1.91 billion. The carrier swung to a EUR362.5 million pretax loss, from a EUR81.6 million profit a year earlier.
It also posted a EUR306 million third-quarter net loss, swinging from a EUR88 million profit.
"Covid-19 continues to wreak havoc across the industry. Christmas & New Year traffic was severely impacted by UK travel bans imposed at short notice by many EU governments on December 19 and 20," Ryanair said.
The restrictions and flight bans saw third-quarter traffic plunge by 78% to just 8.1 million passengers from 35.9 million a year earlier. In December alone, traffic was down 83%.
In January, Ryanair said it expected traffic for the financial year ending in March of between 26 million and 30 million, reduced from its previous guidance of "below 35 million".
Load factor in the third quarter came in at 70%, down from 96% a year earlier.
"The Covid pandemic has caused the closure of EU airlines including Flybe, Germanwings, Level and Montenegro Airlines. Norwegian has already entered a creditor protection examinership and Eurocontrol predicts more EU airline failures in 2021," Ryanair added.
Not for the first time, Ryanair hit out at the extent state aid has been handed to flag carriers such as Deutsche Lufthansa AG and Air France KLM SA.
"This illegal state aid distorts competition and the level playing field across EU aviation," the company said on Monday.
Last summer, the airline frequently lambasted state bailouts of beleaguered airlines. It labelled Lufthansa a "subsidy junkie" after it struck a EUR9 billion rescue deal.
Looking ahead, Ryanair expects a full-year net loss between EUR850 million and EUR950 million, before exceptional items. It made a EUR649 million post-tax profit in the year ended March 2020.
The company added: "Financial 2021 will continue to be the most challenging year in Ryanair's 35-year history.
"While Q4 visibility remains limited due to uncertain and constantly changing Covid-19 travel restrictions, European Govt lockdowns, the timing of the rollout of vaccines across the EU and a very close-in booking curve, we are cautiously guiding an FY21 net loss (pre-exceptional items) of between EUR850 million and EUR950 million."
Looking further ahead, the company eyes having a "lower cost base and a strong balance sheet" as it re-emerges from the Covid-19 crisis, allowing it sweep up market share and "growth opportunities" as struggling European competitors reduce intra-Europe capacity.
To do so, Ryanair said it will be aided by a strong financial position. It has EUR3.5 billion in cash on December 31, while 80% of its owned fleet of aircraft was unencumbered and has a book value of EUR7 billion.
By Eric Cunha; [email protected]
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