Ryanair keeps profit guidance, though March traffic halves

Andrew Cummings
April 6, 2020

The budget airline said profit after tax will be between €950mln and €1bn, which is at the lower end of its previously announced forecasts.

Ryanair Holdings plc (LON:RYA) has confirmed that its profits for the year to March 31, 2020, will fall in the guidance range, although last month's traffic halved due to the coronavirus pandemic. It is now operating fewer than 20 daily flights, or less than 1% of its normal schedule of more than 2,500 flights.

In the last 12 months, about 149 million passengers took a Ryanair flight, a 4% rise on the year before, even though the company was on track to carry 154 million as late as the beginning of March.

Looking ahead, Ryanair said it expects its fleet to remain largely grounded for at least April and May, which will lead to the group recording ineffectiveness of its fuel hedges for the 2021 financial year as an exceptional item for its 2020 results.

These include aircraft groundings, deferring capital expenditure, suspending share buybacks, freezing recruitment and discretionary spending, cutting all pay (including senior management) by 50pc with immediate effect for April and May.

"We will comply with these restrictions at all times", it said.

He also expects Ryanair to book further exceptional charges stemming from fuel hedging in the first quarter of the financial year which has just started.

Analysts at Davy Research said Ryanair had "one of the strongest balance sheets in the industry", pointing to its year-end cash position of €3.8bn and 327 (77%) of the group's owned fleet being unencumbered and debt-free.

"We are grateful to many European Union governments for their foresight and speed of response in recognising that the European Union airlines are one of the most exposed industries to the Covid-19 pandemic and that our flights have been grounded by necessary government restrictions to combat the spread of Covid-19".

Ryanair is scheduled to release its 2020 results on May 18.

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