Ryanair’s first quarter results again made for grim reading, with the Irish carrier recording a loss of €273 million for its group operations. However, there is the promise of better times ahead following the launch recently of the EU’s digital Covid certificate for fully vaccinated people.
The airline now expects to carry between 90 million and 100 million passengers by the end of its financial year in March 2022 – up from previous guidance of close to 80 million.
In financial terms, Michael O’Leary guided that a “likely outcome for full year 2022 is somewhere between a small loss and breakeven”.
This is dependent on the continued rollout of vaccines across Europe this summer, and no adverse Covid variant developments. There could yet be turbulence on both of those fronts.
European airlines have had a torrid time in the pandemic. EasyJet recently announced a loss of £318 million (€372 million) for the three months to the end of June. The airline said it wouldn’t be appropriate to provide financial guidance for the rest of its financial year “given the continued level of short-term uncertainty”, adding that customers are booking closer to departure and “visibility remains limited”.
On Friday, Aer France-KLM and International Airlines Group (owner of Aer Lingus) will report their first-half results. It will be a similar story for the pair. We know that Aer Lingus was losing €1 million a week prior to last week’s loosening of air travel restrictions.
In contrast, domestic air travel has taken off once again in the US and three (Delta, Southwest and American) out of the four major US carriers reported a profit in the second quarter.
Mind you, all three would have reported losses without US government aid, which has totalled $43 billion ( €36 billion) for the trio since the start of the Covid crisis. France, Germany and Italy, meanwhile, have spent €20 billion in state aid to prop up ailing national flag carriers.
Airlines are the new banks – too strategic to national economies to be allowed to fail.