Ryanair - Expecting the Most Challenging Year

February 1, 2021. Ryanair is braced for “the most challenging year” in its 35-year history and expects to post a full-year loss of nearly €1 billion. The Dublin-based low-cost carrier said coronavirus continues to “wreak havoc across the industry” and is “cautiously guiding” a net loss this year of between €850 million and €950 million.” However, the airline said it would be in a position where it could “capitalise on the many growth opportunities” after the pandemic, “especially where competitor airlines have substantially cut capacity or failed”.

Image - Adrian Dennis

The company announced third-quarter losses of €307 million on Monday, adding that in the three months to December, 8.1 million passengers used Ryanair, compared to 35.9 million in the same quarter in 2019. The loss for the quarter contrasts with an €88 million profit after tax in the same period a year before. Compared with the same quarter in 2019, revenue fell 82 per cent from €1.91 billion to €0.34 billion, and operating costs also fell 63 per cent from €1.81 billion to €0.67 billion.

The firm said: “As we look beyond the Covid-19 crisis, and vaccinations roll out, the Ryanair Group expects to have a much lower cost base and a strong balance sheet, which will enable it to fund lower fares and add lower-cost aircraft to capitalise on the many growth opportunities that will be available in all markets across Europe, especially where competitor airlines have substantially cut capacity or failed.”

Image - Tyler McDowell

Ryanair boss Michael O’Leary has said that the airline will not be asking passengers for proof that they have been vaccinated. Speaking on RTÉ radio’s Morning Ireland he said: “We'll be asking the Government and Nphet to get the finger out and accelerate the vaccine programme in this country and to vaccinate the high risk groups which is the only way we're going to come out of Covid-19. Not more failed lockdowns.”

Mr O’Leary said he expected a dramatic recovery in the aviation industry this summer on the back of the successful vaccination rollout programme in the UK. “Fifty per cent of their population will be vaccinated by the end of March, Europe and Ireland needs to get its act together and catch up - if 50 per cent of our population is vaccinated by the end of June which is what we now expect, we see a strong recovery of travel, in summer holidays through the school holidays into August and September.”

The vast majority of people who were sick and dying from Covid were in the over-65 age group, he said. There were not lots of young people getting sick. “Part of this is the Nphet daily press conference trying to terrify the population. The reality is that the UK will have vaccinated 50 per cent of their population, everybody over 50 by the end of March. Ireland needs to catch up, hopefully by the end of June. Nphet and the chief medical officer, if he was doing his job properly, should be holding a daily press conference announcing the number of people who've been vaccinated not issuing care stories about the numbers of people in hospitals. He is the chief medical officer and he should be dealing with the vaccine.

“Vaccination is the way out of this Covid crisis, not these failed lockdowns.”

Image - Tyler McDowell

Mr O’Leary said that if everyone over the age of 50 was vaccinated by the end of June then there would be no requirement for restrictions. “The vast majority of young people don't get sick with Covid. They are asymptomatic, there will be a dramatic reduction in hospitalisations, a dramatic reduction in deaths thankfully and there will be a dramatic reduction in the Covid hype on RTÉ once every body over 50 is vaccinated. That should take place before the end of June.

“If Europe and Ireland gets its act together, catches up with the UK vaccination programme, we should be out of these lockdowns by the end of June and RTÉ will have to move on and talk about something else.”

Mr O’Leary denied that the tone of the airline’s ‘Jab and Go’ advert was wrong: “No it was absolutely correct, it was factually correct saying that vaccines are coming, book now for Easter and summer - we fully accept that Easter will be a write-off. Now because of the vaccine programme summer 2021 we will see millions of people travelling to the beaches of Europe in July, August and September when everybody over 50 will have been vaccinated and the risk of sickness, hospitalisation and death from Covid will have significantly receded,” Mr O'Leary claimed.

Ryanair will reopen its base at Shannon Airport in April 2021, securing more than 330 direct and indirect jobs. The airline says the restoration of the base will see it deliver 32 weekly flights across 14 routes during the summer of 2021. Connections will be offered to holiday destinations such as Faro, Lanzarote, Malaga or Mallorca; business routes to Manchester and London; and other routes including Kaunas, Warsaw and Wroclaw.

Ryanair's commercial chief had previously said it was questionable whether or not the airline's hubs at Cork and Shannon would ever reopen, as air travel was grounded across Europe amid the Covid-19 pandemic.

“This is great news for the mid-west in supporting employment particularly within the region’s tourism sector, which will benefit from pent-up demand now that vaccines will be widely available next year,” Eddie Wilson, CEO of Ryanair DAC said. “Ryanair has a long-standing relationship with Shannon, flying our first passengers from Shannon Airport in 1987. The airport has worked tirelessly with Ryanair over the last number of months to secure capacity ahead of next summer, and we’re delighted that this reopening of the Ryanair base will restore Shannon’s connectivity and support the economic recovery of the mid-west.” Mr Wilson called on the Minister for Transport to “urgently” introduce incentives on airport charges, to support passenger recovery at Dublin and Cork for the coming summer.

Mary Considine, Shannon Group CEO said. “As we rebuild from the devastation of the pandemic this is great news for the regions tourism and business communities who rely on these services for their livelihoods, and the general public who have experienced a very difficult year. With the planned roll-out of the vaccines expected in early 2021, people can now begin to plan for a longed-for overseas holiday.”

Image - Tyler McDowell

British shareholders in Ryanair and Wizz Air had their voting rights removed after the end of the Brexit transition period, as the two London-listed airlines moved to protect their European licences. Ryanair said last December that it would move ahead with plans to treat so-called ordinary or depositary shares as restricted shares if they are owned by non-EU nationals. This will include British citizens, the airline said. It followed a similar move by Hungarian airline Wizz Air, which is also listed in London.

It keeps the two airlines in line with European ownership regulations. To fly between two EU countries, airlines must be directly or indirectly majority owned and effectively controlled by EU citizens, or those of some other EU-affiliated countries such as Norway and Switzerland.

Wizz Air said that if it did not take action, around 80% of its shares would be held by non-EU citizens as the UK leaves the EU. About six in 10 of its shareholders will be sent restricted share notices to stop them from showing up at future meetings.

Image - Tyler McDowell

Ryanair said it will not require British citizens to sell their shares, but will ban them from showing up to, speaking at or voting at shareholder meetings. “These resolutions will remain in place until the board of the company determines that the ownership and control of the company is no longer such that there is any risk to the airline licences,” Ryanair said in a statement to the stock exchange. The measures had previously been signalled by both airlines as they sought to protect their rights to fly within the bloc’s borders after Brexit. Ryanair said the policy that is extending to UK nationals has been in place since 2002.

easyJet, which is also based in the UK, said it would be restricting voting rights of some shareholders to make sure EU citizens own 50% of the company.

Image - Tyler McDowell

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