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Ryanair posts first summer loss in decades as CEO slams UK government 'mismanagement'

Tom Belger
·Finance and policy reporter
·2-min read
Ryanair Chief Executive Michael O'Leary attends the Europe Aviation Summit in Brussels, Belgium March 3, 2020. REUTERS/Johanna Geron
Ryanair Chief Executive Michael O'Leary. Photo: Johanna Geron/Reuters

Ryanair (RYA.L) has posted its first losses over the summer in decades, as passenger numbers plummeted amid the pandemic.

The company’s shares slid 2.3% on Monday as it revealed a first-half loss of €197m (£178m, $229m). It had made €1.15bn profit a year earlier. Revenue nosedived by 78% to €1.18bn.

Chief executive Michael O’Leary used the publication of its half-year report to attack on the UK government over its handling of the pandemic.

Calling for a better test-and-trace system including passenger tests within 32 hours of departure, he called the new lockdown in England a “cover up for political mismanagement which the Johnson government continues to deliver.”

READ MORE: Heathrow no longer Europe’s biggest airport as it slams lack of passenger testing

The company also continued its campaign against state aid to rival carriers, warning a “flood” of such support since COVID-19 hit would distort competition. Meanwhile it warned a no-deal Brexit could have “adverse trading consequences,” saying it hoped a deal could be reached to maintain free movement of people and the “deregulated airline market” to continue between the UK and Europe.

Ryanair’s results highlighted their fading fortunes since European governments began tightening restrictions in September, which “heavily curtailed travel to/from much of central Europe, the UK, Ireland, Austria, Belgium and Portugal.”

Ryanair stocks have not fully recovered from steep declines earlier this year. Chart: Yahoo Finance UK
Ryanair stocks have not fully recovered from steep declines earlier this year. Chart: Yahoo Finance UK

It has now slashed its expectations for full-year traffic to 38 million travellers, “at most 40%” of the previous year’s traffic. Previously it expected 60%. Losses are also expected to be higher in the second half of the year than the first.

“As we look beyond the COVID-19 crisis, and the emergence of effective vaccines in early 2021, the Ryanair Group expects to have a lower cost base, a stronger balance sheet, which will enable it to fund lower fares, and add new lower cost aircraft to capitalise on the many growth opportunities that will be available in all markets across Europe, especially where competitor airlines have substantially cut capacity or failed,” the company said.

WATCH: Ryanair blamed government ‘mismanagement’ as it cut flight capacity last month