Ryanair’s revenue declines by 95% in the first quarter

In a report on Monday, Ryanair (LON: RYA) revealed to have swung to £168.45 million of loss (after-tax) in the quarter that ended on 30^th June. The company attributed the loss to the Coronavirus pandemic that fuelled an unprecedented 99% decline in traffic in recent months. The airline also warned that there was no clarity on whether or not it will conclude this year with a profit.  

The British government allowed travel to 75 destinations in the first week of July; an announcement that sent a wave of celebration in Ryanair.

Ryanair opened more than 2% down on Monday and tanked another 5% on market open. At £9.50 per share, Ryanair is currently 30% down year to date in the stock market after recovering from an even lower £7.41 per share in March. Learn more about how to invest in the stock market.

Ryanair’s costs tank 85% in the first quarter

Ryanair’s loss, however, came in significantly lower than £211.24 million that the analysts had forecast in a company poll. Europe’s largest low-cost carrier also said on Monday that the slump in passenger numbers made the first quarter the most challenging for it in its history of 35 years.

At £113.76 million, Ryanair’s revenue in Q1 saw a massive 95% decline. In terms of costs, the Irish budget airline reported an 85% slump in the recently ended quarter. The air carrier cited the rising COVID-19 uncertainty as it refrained from giving its profit after tax guidance for fiscal 2021.

As of 1st July, Ryanair is now flying roughly 40% of its regular schedule. In August, it forecasts a recovery to 60% and then another 10% in September. According to CEO Michael O’Leary, passenger numbers are expected to return to the pre-virus levels in 2021. For ticket prices to return to the levels in 2019, however, Ryanair is likely to take up to 2023.

Ryanair refuses to cut flights between the UK and Spain

According to the British government, all non-essential travel must be avoided to mainland Spain. Ryanair’s CFO Neil Sorahan branded the government’s announcement as disappointing on Monday as he highlighted that Ryanair will not be cutting flights between the UK and Spain. As per the CFO:

“I think it is regrettable, very disappointing. I have no doubt that we will see other localised outbreaks and we need to be flexible enough to deal with them as they rise over the next number of weeks and months.”

At the time of writing, the Swords-based air carrier has a market cap of £10.30 billion.