Ryanair today revealed a loss of €273 million for the first quarter of its financial year, which runs from April to March. The airline pinned part of the blame on the canceled Easter travel season. However, the future looks far more optimistic as travel restrictions fall and vaccination rates begin to rise.
The last 15 months haven’t been great for the airline industry as a whole. This is true for Ryanair too. While US carriers saw profits during the previous quarter, Ryanair is still operating at a loss. However, it seems as though things are starting to get better across the board in Europe.
More revenue, but a more significant loss
In terms of revenue, Q1 this year was far better for Ryanair than last year. You just need to look at the airline’s passenger numbers to see why. From April to June 2020, the airline carried a measly 0.5 million passengers. However, this year that increased by 7.6 million to 8.1 million. Tied with the increase in passenger numbers was an increase in load factor to 73%, meaning each flight operating had more paying passengers onboard.
The increase in passenger numbers allowed the airline’s revenue to climb by almost 200% to €371 million for the quarter. However, this was tied with an increase in operating costs of 116% to €675 million. All in all, it meant that the airline’s loss increased by 47% year on year to -€273 million.
What’s next for Ryanair?
Ryanair revealed that it continues to expect the rest of the financial year to be challenging, primarily due to prolonged uncertainty regarding COVID-19 travel restrictions. The airline has seen its bookings beginning to recover since the EU launched its digital health passport. Despite this, the airline revealed it has to offer low fairs to attract interest. This is perhaps lower than it would otherwise like.
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Ryanair revealed that it would be impossible to provide meaningful guidance about the remainder of the year as bookings remain pretty short notice. However, the airline believes that it will handle 90-100 million passengers across the year. As such, the airline “cautiously expects” that the end result of the whole year will be somewhere between a slight loss and breaking even. Of course, we’ll need to wait until April next year to find out what the airline achieved, and an awful lot can change before then.
Ryanair believes that it will see a benefit from airlines that have been lost during the pandemic and expects to handle yearly passenger traffic will increase to over 200 million passengers a year within the next five years.
What do you make of Ryanair’s first-quarter results? Let us know what you think and why in the comments below!
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