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Ryanair Expects More Than $1 Billion in Losses
The impact of COVID-19 has been unprecedented in the air transport industry as in many economic sectors around the world. Many airlines are facing serious economic difficulties this year due to the important decrease in demand. Many big legacy carriers are asking national governments to help them with big loans and national rescues, but this is not the case for most low-cost carriers.
While some European low-cost airlines, as easyJet or Norwegian, have asked the for national loans, the biggest carrier in the continent, Ryanair, has refused to receive any help. This has forced the Irish carrier to perform extraordinary measures to adapt its offer to the current situation and manage to minimize its losses.
On Monday, Ryanair announced that they expect to close the 2021 fiscal year, which ends in March, with a total loss of more than €850 million ($1 billion) in the most challenging year of their 35 years of history. The movement restriction measures imposed during the past year have been crippling for air transportation, and company CEO Michael O’Leary has continuously criticized these decisions.
The last time the Ryanair CEO spoke out was when the United Kingdom imposed the mandatory PCR test prior to the passengers’ arrival at their airports: “New PCR tests on arrival are going to ground almost all flights to and from the UK. For Ryanair, it means that we have been taken away almost every flight of January, February and March with only one or two daily flights. (…) The main problem is that there is no ending to these restrictions,” O’Leary said.
The Irish LCC has also updated its demand forecast for the next 12 months. While it previously expected 35 million passengers, the airline now anticipates between 26 and 30 million. Ryanair also reported recently that they closed the third quarter of the 2021 fiscal year with a net loss of €306 million euros after the huge impact of restrictions on Christmas operations.
Ryanair Presses Vaccination Program
As the world is still far from the end of the coronavirus pandemic, restriction measures have increased during the last few weeks, with countries as Canada or Israel closing their borders. The biggest hope for the air transport industry is the vaccination program, but countries are still far from reaching a point when traveling will be back to normal.
Ryanair has pressed the European Union to expedite this process to save the industry: “We take some comfort from the success of the U.K. vaccine program, which is on target to vaccinate almost 50% of the U.K. population (30 million) by the end of March. The EU now needs to step up the slow pace of its rollout program to match the U.K.’s performance.”
While the vaccination program is still in progress, many airlines are analyzing how to face the summer season depending on how the situation evolves during the next months.
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