Despite posting a loss of €306 million ($370 million) for the third quarter, it is looking as though Ryanair is still doing very well. Today, the airline reported that it had €3.5 billion ($4.2 billion) in cash reserves as of the end of 2020.
Many airlines have taken a huge financial hit from the COVID-19 pandemic. However, while some of the more established full-service carriers have been struggling, it seems as though Europe’s major low-cost carriers have been flourishing, with both Ryanair and Wizz seeming reasonably optimistic about the future despite the current dip in passenger numbers across the continent.
A tough three months for Ryanair
While things didn’t look terrible for Ryanair entering the third quarter (their financial year runs from April to March), it sure did look that way towards the end. Dealing with new COVID-19 restrictions tied to variations of the virus in the UK and Ireland, the airline ended the year canceling many flights.
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The airline cites the short-notice travel bans as accounting for its traffic drop by 78% to just 8.1 million passengers for the three months. However, Ryanair expects things to worsen before they get better, with even fewer passengers expected this quarter.
The airline fairly effectively offset the drop in passenger numbers with flight cancellations. While equating to a decrease of 26%, the airline still managed a Q3 load factor of 70%, meaning that passengers occupied seven out of ten seats flown by the airline throughout the period.
Of course, with a drop in the number of passengers comes a reduction in the airline’s revenue. This saw revenues from Ryanair Group airlines drop to €340 million ($411 million), equating to an 82% drop. This was offset by a fall in operating costs, meaning that all in all, the airline posted a loss of €306 million for the quarter.
Still expecting the MAX soon
While the Boeing 737 MAX has been recertified by both EASA and the UK’s Civil Aviation Authority, there is still one more hurdle remaining before the European low-cost carrier takes delivery of its first aircraft. The 737 MAX 8200 is yet to receive its initial certification. The aircraft requires separate certification to the 737 MAX 8 that it is based on, given the higher passenger loads expected.
Interestingly, Ryanair has completely dropped the MAX name when referring to the aircraft, instead, talking about its ‘Boeing 737-8200’ order. Ryanair recently renewed its confidence in the aircraft, purchasing an additional 75 of the type late last year. The airline hopes that deliveries will start soon, meaning that it can have 24 of the aircraft operational by the peak of the summer 2021 schedule. The introduction of the 737 MAX will see the first aircraft painted in Ryanair’s subsidiary liveries.
What do you make of Ryanair’s Q3 results? Let us know what you think and why in the comments!
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