LONDON – Ryanair has today reported its Q1 earnings report as its traffic numbers fall by 99% due to the ongoing COVID-19 pandemic.
The first quarter of 2020 (1Q20) saw traffic fall from 42 million passengers handled to just 500,000 handled.
For next year, the Irish low-cost carrier believes that traffic will fall from 60% from 149 million to just 60 million.
Ryanair also doubled down on what it dubs as a “multi-billion flood of illegal state aid from EU Governments to their flag carrier airlines” as it will “distort competition and allow unsustainable flag carriers to engage in below cost selling for many years to come”.
The airline has also prioritised on its cash preservation, noting it has closing cash of 3.9 billion EUR.
Revenues also dropped by 95% from June 30 this year compared to the same period last year.
June 2019 saw Ryanair receive 2.3 billion EUR in revenue whereas last month only saw collected earnings of 125 million EUR.
This has ultimately reported in the airline posting a loss of 185 million EUR, especially with only 40% of its flights having some form of a restart since the beginning of July.
What about Laudamotion?
In the business review from the Ryanair Group, it had conceded that the management team at Lauda “were forced to implement a deep and painful rescue plan”.
This involved downsizing the fleet from 38 to 30 aircraft for the Summer season of this year with job reductions in Vienna and Stuttgart.
The Group had also noted negotiations have been taking place over the course of this pandemic to ensure modest pay cuts in order to avoid significant job losses.
Even though costs at the airline were reduced by 85% during 1Q20, this was not enough to remain sustainable in what has been deemed an unstable environment.
Ryanair’s Boeing 737-MAX-200s
The Group has also given an update regarding the 200 Boeing 737-MAX-200 Gamechanger aircraft it has on order.
According to Boeing, an indication that a late Q320 return to service is on the cards for the aircraft.
This means that Ryanair could accept delivery of its first MAX-200 aircraft by the end of this year and 40 ahead of the Summer 2021 scheduling.
The Group also stands by its aim that the MAX’s will enable growth to the point of 200 million passengers per year over the next five to six years.
Strong Financial Position
Questions over how this could be funded could be over the financial position of the group.
Ryanair currently holds a BBB investment-grade rating, which is due to the strong liquidity position of the company.
The airline also said it would sell seven of its oldest Boeing 737s and will continue to focus on debt repayments over the next 24 months.
Based on that information, the following seven oldest aircraft in the fleet are, according to Planespotters.net, but does note that these frames will be retired:
- EI-SEV – Boeing 737-73S/WL – 21.5 years old.
- EI-DAF – Boeing 737-8AS/WL – 17.6 years old.
- EI-DAG – Boeing 737-8AS/WL – 17.6 years old.
- EI-DAH – Boeing 737-8AS/WL – 17.6 years old.
- EI-DAI – Boeing 737-8AS/WL – 17.5 years old.
- EI-DAJ – Boeing 737-8AS/WL – 17.5 years old.
- EI-DAK – Boeing 737-8AS/WL – 17.3 years old.
Overall, it remains clear that whilst losses have been posted at the Group, this is currently the new normal as we live in these difficult times.
The Group has clearly outlined how it will remain happily afloat during the pandemic, and has options in case the industry deteriorates any further.