Shares in Ryanair (RYA) gained 3.76% to €12.43 despite the budget airline swinging to a big half-year loss as it warned of a ‘hugely challenging’ winter ahead.

In the six months to 30 September, Ryanair reported a net loss of €197 million compared to a €1.15 billion profit after tax in the same period last year.

Revenue plunged 78% to €1.18 billion from €5.39 billion in the same period in 2019, but the impact on profits was cushioned by a 67% drop in operating costs to €1.35 billion, while ancillary revenue held up reasonably well, falling in-line with scheduled revenues as customers continued to choose reserved seating and priority boarding.


In a more positive sign, the passenger load factor (i.e. how full its planes are) remained relatively resilient at 72%, a drop of 24% compared to the 96% load factor it reported in the first half of its 2019 financial year.

By comparison, British Airways owner International Consolidated Airlines (IAG) last week reported a load factor of just 48.9% in the three months to 30 September.

For reference the International Air Transport Association (IATA) estimates, based on a sample of 122 airlines, that on average airlines need a load factor of 77% to break even.


However, that load factor is likely to decrease significantly heading into winter and the airline said the remainder of its current financial year ‘will continue to be a hugely challenging year for Ryanair.’

The company added, ‘Given the current Covid-19 uncertainty, Ryanair cannot provide [profit after tax] guidance for financial year 2021 at this time.  The Group expects to carry approximately 38 million passengers in 2021, although this guidance could be further revised downwards if EU governments continue to mismanage air travel and impose more uncoordinated travel restrictions or lock downs this winter.’

Ryanair said it expects to record higher losses in the second half than the first half of the current financial year.


Analysts at research firm Davy said they expect Ryanair to emerge as the ‘structural winner’ in the short-haul Europe market post-Covid, pointing to the firm’s €4.5 billion of liquidity following its debt and equity raise, as well as ‘an ex-fuel cost base that is only going lower and a Boeing deal in the offing.’

Davy expects Ryanair to report losses of around €700 million in its current financial year, before returning to profit next year of €600 million, and €1.6 billion by 2023.


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Issue Date: 02 Nov 2020