LONDON – Ryanair Holdings (FR) today reported a Q3 loss of €306m (US$369.91m), compared to a PY Q3 profit of €88m (US$106.38m).
Features of this 3-month period to 31 December included:
- Q3 traffic fell from 36m to 8m (-78%).
- €3.5bn cash at Q4 (31 Deccember).
- Cost reduction & liquidity management continues at all Group airlines.
- Stansted low-cost growth deal extended by 4 years to 2028 – easyJet (U2) based slots secured.
- CDP awards FR a strong (first time) B- climate protection score.
- FR restricts non-EU shareholder voting rights post Brexit.
- Firm Order for 75x Boeing 737-8200 aircraft (pipeline of 210 firm aircraft).
Q3 Business Review
|Q3 (IFRS) – Group||31 Dec. 2019||31 Dec. 2020||Change|
Q3 revenue fell by 82% to €0.34bn as traffic shrank by 78% to 8.1m. Ancillary revenue delivered a solid performance as more guests chose priority boarding and reserved seating.
Q3 cost performance was strong, falling 63% thanks to the measures implemented over the past nine months. Due to ongoing travel restrictions, reduced Q4 traffic and a revised aircraft delivery schedule, the Group recorded a €15m exceptional ineffectiveness charge on fuel and currency hedges in Q3.
Balance Sheet & Liquidity
The company’s balance sheet remains one of the strongest in the industry with a BBB credit rating and €3.5bn (US$4.23bn) cash at 31 December, approximately 80% of the Group’s owned fleet is unencumbered, with a book value of over €7bn (US$8.26bn).
Since March 2020, the Group has lowered cash burn by cutting costs, participating in EU Government payroll support schemes, cancelling share buybacks and deferring non-essential capex.
Following its successful fund raising (€400m share placing & €850m eurobond) in September, the Group is well financed as it takes delivery of its first Boeing 737-8200 aircraft in Q4 and plans to repay over €1.5bn (US$1.81bn) maturing debt in the next 6-months.
Boeing 737 MAX update
In December, shortly after the FAAs ungrounding of the Boeing 737 MAX aircraft in the U.S., FR ordered a further 75x Boeing 737-8200 aircraft from Boeing increasing its firm order to 210 units.
Following EASAs recent certification of the Boeing 737 MAX-8 to return to flying in Europe, they are hopeful that the Boeing 737-8200 will be certified in the coming weeks. This will enable the Group to take delivery of up to 24 new aircraft before peak summer 2021.
This order will deliver over a 4 year period between spring 2021 and December 2024 (FY 2025), facilitating traffic growth to 200m passengers by FY 2026.
The company recently received a B- climate protection rating from CDP for the first time, making it one of the highest rated airlines in the world.
While this is a strong inaugural rating, highlighting FR’s excellent environmental performance and very strong governance, the Group is committed to improving this score.
The new Boeing 737-8200s with 4% more seats, 16% lower fuel burn and 40% lower noise emissions will help FR to lower its CO₂ and noise footprint and deliver on its target of being carbon neutral by 2050.
FY 2021 will continue to be the most challenging year in FR’s history. Recently announced Covid lockdowns and travel restrictions across the EU and UK will reduce forecast FY 2021 traffic to between 26m and 30m, with more risk towards the lower end of the range.
While Q4 visibility remains limited due to uncertain and constantly changing Covid-19 travel restrictions, the timing of the rollout of vaccines across the EU and a very close-in booking curve, we are cautiously guiding an FY 2021 net loss (pre-exceptional items) of between €850m (US$1bn) and €950m (US$1.1bn).
Featured image: Ryanair Boeing 737-8AS reg. 9H-QAK taxiing to take off at Naples International Airport (NAP). Photo: Marco Macca – @aviator_ita