Ryanair is preparing for price reductions as it warns of ‘hugely uncertain’ economic prospects

Ryanair is preparing to lower prices to lure customers back to their aircraft before the spring, as it warned of a “very uncertain” economic outlook.

The Irish-listed carrier said “media hysteria” over the Omicron variant had exacerbated its losses in the last quarter of 2021 and that shareholders could expect further disruption from Covid, although it was ready to run more flights overall this summer than before the coronavirus -pandemic hit.

Ryanair had a loss of € 96 million. (£ 80m) in the last three months of last year – despite revenues four times higher than in the autumn of 2020, when stricter international travel restrictions were still in place.

Its CEO, Michael O’Leary, said the first three months of 2022 would require “significant price stimulation at lower prices” to attract customers. The airline reduced its capacity for January by a third after passenger numbers fell 1.5 million below the forecast in December after Omicron hit travel.

O’Leary said recent reservations had been improved following the easing of travel restrictions, but passengers were still booking later and closer to departure. The airline did not change its forecast for a full-year loss for March of € 250 million- € 450 million. a wider than normal range.

O’Leary added: “This result is hugely sensitive to any further positive or negative Covid news feed and therefore we would like to warn all shareholders to expect further Covid disruptions before we here in Europe and the rest of the world can finally declare that the Covid crisis is behind us. “

The chief financial officer said the legacy of the pandemic could mean a long-term change in airline practices, including wearing masks on board.

Neil Sorahan told the Telegraph: “Masks will be something that will be with us for a while yet. It’s a bit like after 9/11 that we ended up with our toiletries in plastic bags, maybe we should live with masks for a while yet.”

The current high price of fuel was not an issue, Sorahan said: “We are the best secured airline in Europe at the moment – fuel traded above $ 91 per barrel this morning, we have maintained our fuel demand at $ 60 per barrel, so we are in a really good position over the next 15 months. ”

Ryanair, meanwhile, has maintained ambitions to open bases in Ukraine should tensions with its neighbor ease, O’Leary said: “If it is not invaded by Russia, it is a country where we would expect to open a few bases. .. Any time in the next two or three years subject to cost agreements. ”

Route planners had visited Ukraine again this month, but authorities were unable to discuss Ryanair’s expansion plans, O’Leary said, “as they were otherwise distracted”.

The airline aims to grow to 225 million passengers a year by 2026 and has received 41 Boeing 737 Max aircraft after several years of delays after design failures caused two fatalities.

O’Leary has repeatedly described the Boeing 737 Max as a “game-changer” for the airline, offering lower costs and lower carbon emissions per unit. flight.

However, its overall footprint will grow: the planned growth of 50% over the next five years will only be accompanied by a 16% reduction in fuel consumption per capita. new plane. It hopes to reduce fuel consumption per capita. passengers by a further 10% over the next decade using synthetic fuels, which are not currently available on a large scale.

Gerald Khoo, an analyst at Liberum, a stockbroker, said Ryanair was positioned for a strong recovery, adding: “There is growing industry optimism that the summer of 2022 may represent an almost normal trading period, with strong accumulated demand exceeding limited industrial capacity , as long as international travel restrictions continue to ease. “

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