Ryanair forecasts a record £837 million of annual loss due to COVID-19 restrictions

Ryanair Holdings plc (LON: RYA) said on Monday that the ongoing COVID-19 restrictions are likely to translate into a record £749 million to £837 million of loss this year. But CEO Michael O’Leary expressed confidence that vaccination against the novel flu-like virus will resume demand for air travel this summer, resulting in a dramatic recovery.

Ryanair shares jumped a little under 2% in premarket trading on Monday and lost the entire intraday gain on market open. The stock is now exchanging hands at £12.52 per share after recovering from a low of £7.17 per share in March 2020. Learn more about how to invest in the stock market.

Ryanair reports £269 million of loss in fiscal Q3

The expected loss for the year that will conclude on 31^st March is nearly five times larger as compared to Ryanair’s previous record yearly loss seen in 2009. CFO Neil Sorahan said on Monday that the airline’s recovery is likely to catch up pace in the fiscal second quarter (July to September) and remain between 70% and 90% of the pre-pandemic levels in the fiscal second half.

In separate news, the European Commission gave its final approval to AstraZeneca’s COVID-19 vaccine on Friday.

In fiscal Q3, Ryanair reported £269.64 million of loss as the Coronavirus emergency resulted in a 78% decline in passenger numbers. In comparison, analysts had called for a slightly lower £264.35 million of quarterly loss instead. In the first week of November, the Swords-headquartered airline had reported £178 million of loss for the fiscal first half.

Ryanair’s revenue slides 82% in the third quarter

The low-cost air carrier also noted an 82% annualised decline in its third-quarter revenue. Ryanair’s financial update comes a week after its peers Wizz Air and EasyJet registered a 77% and an 88% decline in revenue, respectively.

According to the Irish airline, it had £3.08 billion of cash on hand at the start of the new year versus £4.5 billion at September-end. Analyst Mark Manduca of Citigroup commented on the report on Monday and said:

“The in-line Q3 and the strong cash balance sheet of the company may be enough today to buoy investor sentiments after the volatility of last week.”

Ryanair performed fairly upbeat in the stock market last year with an annual gain of close to 13%. At the time of writing, the Irish budget airline is valued at £14 billion.