Ryanair faces €200m rev­enue hit from lost sales af­ter lat­est can­cel­la­tions bite

Sunday Independent (Ireland) - Business & Appointments - - FRONT PAGE - Fearghal O’con­nor

EM­BAT­TLED air­line Ryanair will take a €200m hit to its po­ten­tial rev­enue over the com­ing months be­cause of the wave of can­cel­la­tions it has been forced to im­ple­ment.

The air­line said the first set of 2,000 flight can­cel­la­tions that came as a shock to pas­sen­gers last month would cost it €25m, largely in com­pen­sa­tion pay­ments to many of the 300,000-plus cus­tomers im­pacted.

But a sec­ond batch of 18,000 flight can­cel­la­tions an­nounced last week is likely to see a much greater amount of rev­enue fore­gone. Close to 3.4 mil­lion seats have been with­drawn from sale be­tween now and March.

Ryanair flights, on av­er­age, fly 97pc full, but al­low­ing for lower 90pc win­ter-time loads, the 18,000 can­celled flights would have car­ried three mil­lion cus­tomers.

Ryanair’s av­er­age fare is cur­rently €41, mean­ing it has missed out on €125m in ticket sales alone, al­low­ing for the re­book­ing of 400,000 pas­sen­gers al­ready booked.

But Ryanair makes an in­creas­ing amount of its rev­enue from an­cil­lary sales, such as bag­gage fees and in-flight sales. Pre­vi­ous es­ti­mates sug­gest that the air­line makes close to €14 per pas­sen­ger in ex­tra rev­enue over and above the ticket price paid.

That means that by can­celling more than three mil­lion seats, the bulk of which it had not yet sold, the air­line is los­ing out on fur­ther an­cil­lary rev­enue of at least €40m on top of €125m in ticket sales.

The air­line said that as well as the ini­tial €25m cost for the orig­i­nal can­cel­la­tions, free vouch­ers is­sued to pas­sen­gers would cost it a fur­ther €25m. Monthly growth will slow from 9pc to 4pc be­tween Novem­ber and next March, with traf­fic to March 2019 slow­ing from 142 mil­lion to 138 mil­lion, the air­line said.

But avi­a­tion sources pointed out that Ryanair’s own ini­tial fig­ures sug­gested av­er­age loss per pas­sen­ger for the first 350,000 can­celled seats was €71.43, mean­ing rev­enue loss would top €230m if ap­plied to the three mil­lion-plus seats now can­celled.

Ryanair boss Michael O’leary has apol­o­gised for the staffing cri­sis which has seen it forced to can­cel thou­sands of flights

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