Ryanair records first quarterly profit since 2019 but expects loss of €200m

Ryanair reported its first quarterly profit since the pandemic started but said yesterday it expects an annual loss of up to €200 million ($231.4m) and warned it will need to cut fares to sustain its recovery.

The Irish airline, which operated more flights this summer than its European rivals, reported net income of €225m in its second quarter, which ended on September 30 – its first quarterly profit since the last three months of 2019.

Ryanair also reported an after-tax loss of €48m for the six months to September, including a €273m in the first quarter – lower than the €411m loss recorded a year earlier.

However, despite reporting “a very strong recovery” across Europe, the airline downgraded its annual forecast to a loss of €100m to €200m for the full financial year, which ends on March 31.

“There is no doubt that the remainder of the fiscal year will be challenging,” chief executive Michael O’Leary said in a video presentation. “Breakeven is unlikely this year. I’m really focused on next year.”

Like many airlines, Covid-19 grounded the group’s entire fleet from mid-March last year, as EU governments imposed flight and travel bans to help curb the spread of coronavirus. While Ryanair helped to repatriate customers and operated rescue flights during the crisis, it did not resume passenger flights until July 1 last year.

Ryanair carried 39.1 million passengers in the six months ended September, more than double the number in the same period last year but 54 per cent fewer than in the first half of its pre-pandemic financial year.

Europe’s largest budget airline said it would fly about 10 million passengers a month over the winter and “just over” 100 million in the year to March. It flew 149 million passengers a year before the pandemic. It carried 11.3 million passengers in October.

Keeping its fares low and passenger numbers high over the winter will “set us up strongly for a very strong recovery” into the summer of 2022, Mr O’Leary said.

Empty seats per plane would shrink to fewer than 10 per cent from about 20 per cent by next summer, he said. The airline expects to return to profitability in the year ending March 2023.

The company said it plans to create 5,000 new jobs for pilots, cabin crew and engineers over the next five years, and invested in a €50m Aviation Skills Training Centre in Dublin, with a further €100m going towards centres in Spain and Poland.

While the expected loss of up to €200m is better than the €815m decline posted the previous financial year, it is a downgrade from the airline’s July forecast which expected a figure somewhere between “a small loss and break-even”.

However, given the position the airline was in this time last year, Adam Vettese, analyst at multi-asset investment platform eToro, said Ryanair’s net quarterly loss of €48m is a positive step in the right direction.

“Airlines were one of the sectors worst affected by the pandemic but there is definitely a feeling that they are past the worst of it, particularly with the Dublin-based carrier actually reporting a profit in the second quarter,” he said.

In December, the company banned non-EU citizens, including Britons, from buying its ordinary shares.