Ryanair has slashed its passenger traffic target by another 20 per cent for 2021 as it recorded a 13 per cent rise in profit after tax for its latest full-year.
The budget airline revealed the profit jump today but warned it may pull out of some of Europe’s airports over coronavirus travel bans.
Michael O’Leary’s company cut its annual traffic target to “somewhere under” 80m for the coming year, compared to a target of 100m last week. The original target stood at 154m passengers.
Still, Ryanair posted €1bn (£890m) in post-tax profit for the year to the end of March today, up 13 per cent compared to the year before. That helped push up Ryanair’s share price seven per cent to €9.04 in early trading.
O’Leary said Ryanair was making an educated guess as to 2021 passenger traffic volumes.
“For the next 12 months it’s obviously impossible for us to today to give you any guidance on either traffic numbers or on profits,” he said.
“We have no idea because it is entirely subject to passenger numbers, yields and the lifting of government restrictions.”
The airline industry has predicted it will take years to build back to pre-coronavirus levels of passenger demand once the pandemic subsides.
O’Leary said Ryanair would first pull out from loss-making airports in the UK, Spain and Germany. But bases in Italy, Belgium and elsewhere in Europe could be cut if Ryanair continues to struggle from the coronavirus fallout.
Ryanair subsidiary Lauda’s main base in Austria could also go as O’Leary warned the brand is facing an “existential crisis”.
O’Leary’s budget flyer has announced a raft of job cuts including 3,000 pilots and crew. It joins UK airline British Airways in making cuts. BA is using the government’s furlough scheme for almost 24,000 staff but intends to cut up to 12,000 roles.
And Ryanair does not expect pre-coronavirus fare prices to return until at least 2022. But heavy discounts mean the airline does expect a surge in bookings once international travel returns. The airline has committed to operating 1,000 daily flights from July.
However, most countries’ borders remain locked down to curb the spread of the global pandemic.
The airline now predicts it will fall to a loss of around €200m for the three months to June – the quarter economists expect to be the worst hit from coronavirus.
Ryanair grounded its fleet from mid-March as travel bans arrived. This cut full-year passenger traffic by over 5m guests and slashed full-year profits by over €40m.