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Ryanair blames governmental lockdowns as traffic falls 80% – losses to worsen during Winter 2020/2021

By

Bart Noëth

 -

2 November 2020

© Bart Noëth

Ryanair reported Monday an H1 (April – September 2020) loss of €197 million, compared to an H1 2019 profit of €1.15 billion. The airline isn’t very optimistic for next Winter 2020/2021 and expects a heavier loss for H2 2020. 

Passenger traffic dropped about 80% compared to H1 2019: from 86 million passengers to just 17 million. The passenger load factor reached 72% compared to 96% a year ago.

The Irish low-cost carrier also announced to operate a “significantly reduced flight schedule” in the next six months compared to its previous expectations back in March 2020. The airline now believes it will operate about 40% of its Winter 2020/2021 schedule.

Passenger confidence and forward bookings into Winter 2020/2021 were negatively impacted by the return of “uncoordinated” European Union governmental flight restrictions in September and October which heavily curtailed travel to/from much of Central Europe, the United Kingdom, Ireland, Austria, Belgium and Portugal. As a result, Ryanair recently cut its Full Year 2021 traffic guidance to approximately 38 million guests (down 73% compared to the previous year).

Ryanair isn’t very optimistic on the future of intra-European travel as the airline expects capacity to remain subdued for the next few years: “the Covid-19 crisis has already caused the closure of a number of EU airlines including Flybe, Germanwings and Level as well as deep long-term capacity reductions at many others. It has sparked a flood of illegal State
Aid from EU Governments to their flag carriers including Alitalia, Air France/KLM, LOT, Lufthansa, SAS, TAP and others. This illegal State Aid will distort competition and allow failed flag carriers to engage in below-cost selling for many years.”

But the Irish low-cost carrier remains hopeful: “This will create opportunities for Ryanair to grow its network, and expand its fleet, to take advantage of lower-cost airport and aircraft opportunities that will inevitably arise.”