Ryanair Holdings plc (LON:RYA) dived to a €185mln loss in the first quarter of its financial year as most of its fleet was grounded by coronavirus restrictions, but the budget airline still expects to fly around 60mln flights in the other nine months.
Fewer than half a million customers flew with the Irish carrier in the three months to June 30, down from 42mln a year ago.
READ: Travel shares sink after UK imposes new quarantine on Spanish trips
Revenue consequently plunged from €2.3bn to €125mln and led to the evaporation of the €243mln profit from a year ago, though not as big a loss as it had warned in May.
The Dublin-based group expects to record “a smaller loss” in the second quarter as it gradually restarted flights from the start of July.
It expects over 90% of customer cash refund requests will be cleared by the end of this month, but it is bolstered by €3.9bn of cash on the balance sheet at the end of June.
Furthermore, management have been busily cutting costs from their already low base during the pandemic, including enforcing pay cuts on staff.
This, the company trumpeted, “will be essential to fund lower fares as the group competes against unlawfully state aided flag carriers”, while adding that “a second COVID-19 cases across Europe in late autumn (when the annual flu season commences) is our biggest fear right now”.
The shares fell 7% to €10.08 on Monday morning, mostly in synch with a wider travel sector slide after the UK imposed a new coronavirus quarantine on travellers from Spain.
William Ryder, equity analyst at Hargreaves Lansdown, said it was “a tough quarter, which is to be expected when planes have been grounded.
“The group hopes to get a significant portion of the fleet back into the air in the next quarter, but whether this translates into a lower loss will depend heavily on passenger numbers. If we can avoid a second wave of COVID-19 infections and enough people feel sufficiently confident to go on holiday the group may be able to mitigate some losses and start to position itself for a recovery – if not things could get harder from here.”
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