LONDON – The Ryanair Group reported yesterday an H1 loss of €197m, compared to a PY H1 profit of €1.15bn. According to the company, the COVID-19 pandemic grounded the Group’s entire fleet from mid-March to the end of June as EU Governmentsimposed flight or travel bans and widespread population lockdowns.
During this crisis, Group airlines repatriated customers and operated rescue flights for many EU Governments. The Group on July 1 successfully resumed flights across most of its route network, operating up to 60% of prior year capacity in Q2 achieving over 70% load factors.
The company recently cut its FY21 traffic guidance to approximate 38m guests. This takes the Group’s W.20 (November-March) capacity down from the previously guided 60% to at most 40% of prior year traffic.
H1 Business Review
Revenue fell by 78% to €1.18bn as traffic fell 80% to 17.1m. With almost zero Q1 traffic, the vast majority of H1 revenue was earned in Q2. Ancillary revenue performed strongly as more guests chose priority boarding and reserved seating.
Additionally, the Group has agreed modest pay cuts with staff unions, which helped minimize job losses.
In all, due to significantly reduced W.20 traffic forecasts and ongoing aircraft delivery delays, the Group recorded a €214m ineffectiveness charge on fuel and currency hedges in H1.
|H1 (IFRS) – Group*||30 Sep. 2019||30 Sep. 2020||Change|
Balance Sheet and Liquidity
The company’s balance sheet is one of the strongest in the industry with a BBB credit rating and over €4.5bn cash at 30 September. Almost 80% of the Group’s fleet is unencumbered.
Since March, the Group lowered cash burn by cutting costs, participating in EU Govt payroll support schemes, cancelling share buybacks and deferring non-essential capex.
In September, the Group raised €400m of equity and a 5-year €850m eurobond with a 2.875% coupon. Cash was also boosted by €250m supplier reimbursements received in Q2.
This ensures that the Group is well financed to deal with the Covid-19 crisis and removes refinancing risk as it prepares to repay maturing debt over the coming year.
Boeing 737 MAX Update
The Group was due to take delivery of its first Boeing 737-MAX-200 aircraft a year and a half ago. Boeing expects a calendar Q4 return to service for the MAX-8, allowing FR to, hopefully, accept delivery of its first MAX-200 in early 2021.
The Ryanair Group expect to take delivery of approximately 30 MAXs before peak 2021.
October Traffic Down 70%
Ryanair also released today its October traffic statistics, which are as follows:
|Rolling Annual||151.0m||70.3m (86% LF)||-53%|
The company operated approximately 40% of their normal October schedule with a 73% load factor.
Ryanair Boeing 737-8AS during pushback at Naples International Airport (NAP). Photo: Marco Macca – @aviator_ita