Ryanair posts record loss, expects to break even this year

Ryanair Holdings Plc posted a record annual loss, while saying it’s likely to break even this year as vaccination programs allow a gradual easing of coronavirus travel curbs.

Bookings have increased significantly in recent weeks, pointing to a strong recovery in the second half, although forward visibility remains “close to zero,” the Irish company said in a statement Monday. That’s made it impossible to provide more meaningful financial guidance.

Europe’s biggest discount carrier is counting on lockdown-weary travelers flocking to the beach as U.K. curbs ease, starting with Portugal. Even if the revival transpires, Ryanair reiterated that traffic will remain at the lower end of an 80 million to 120 million passenger range for the year ending next March. Clusters of a more transmissible variant of Covid-19 that’s fed an Indian outbreak also pose fresh risks for the U.K. plan.

“Scientific evidence over the weekend confirms that vaccines are effective against the Indian variant, but that it has a higher rate of spread,” Chief Executive Officer Michael O’Leary told Bloomberg TV. “We think it will be a one- or two-week wonder and then everyone will calm down.”

Ryanair shares were up 1.1% as of 8:03 a.m. in Dublin. This year they have advanced 5.5%.

Italy, Greece

Should the new strain prove more threatening there’s a risk of new lockdowns that could put Europe’s reopening into reverse, Chief Financial Officer Neil Sorahan said separately.

Should markets continue to open up, Ryanair expects to be operating at 60% to 70% of normal summer levels.

Bookings at Ryanair have tripled to 1.5 million a week since April 1, spurred by Britain’s reopening of leisure travel starting this week. O’Leary said he’s hopeful Italy and Greece will be added to a quarantine-exempt “green list” this month, followed by Spain in early June.

The CEO said he’s in talks with airports in Italy, Spain, Sweden and central and eastern Europe about adding further flights, though confusion surrounding the delivery of Ryanair’s first 737 Max jets from Boeing Co. is impacting the company’s ability to commit new capacity.

By the end of May, Ryanair’s fleet should have included 14 high-capacity examples of the Max—now flying again after two fatal crashes—but none have been handed over following the discovery of electrical problems. O’Leary said communication from the manufacturer has been “very poor.”

Market Share

Ryanair posted a loss of 815 million euros ($989 million) for the year ended March 31, compared with profit of 1 billion euros the prior year. The Dublin-based carrier said on April 7 the figure would be between in an 800 million-euro to 850 million-euro range.

O’Leary said he expects capacity on intra-European routes to be materially lower for the foreseeable future, creating opportunities to target market share with lower prices, especially next summer, when Ryanair is due to have received as many as 65 Max planes out of an order for 210.