Will Ryanair at a loss raise ticket prices?
All the details on the results of the third quarter for Ryanair, the Irish low cost airline. Facts, numbers, comments and scenarios
Accounts in the red for Ryanair.
The low cost airline closed the third quarter of the financial year with a loss of 96 million euros. Still no profit for the Irish carrier, which had recorded a loss of 321 million euros in the same period of the previous year.
The “sudden appearance of the Omicron variant (at the end of November)”, explains the CEO Michael O'Leary, weighed on the performance of the accounts. In fact, December traffic slowed to 9.5 million passengers, with an 81% lower load factor, a figure well below the expected target of 11 million.
However, traffic in the quarter recorded a strong rebound of 286% from 8.1 million to 31.1 million.
“While recent bookings have improved, following the relaxation of travel restrictions, the booking curve remains very late, so fourth-quarter traffic requires significant price stimulation at lower rates,” O'Leary said.
However, capacity cuts from rival carriers could help push prices up in the key summer season.
All the details on the accounts of the Irish low cost airline.
THE RED OF RYANAIR
Ryanair reported a loss of 96 million euros in the last three months of 2021. The Irish airline had lost 306 million euros in the same quarter of 2020 . Still a long way from the 88 million profit made in the last three months of 2019.
However, the loss of the last quarter of 2021 is in line with the expectations of the market, which was for a red of 101 million euros.
Ryanair's expected loss for the full financial year, which ends on March 31, is expected to be between 250 and 450 million euros.
REVENUES INCREASE
Revenues rose sharply to 1.47 billion, compared to 340 million in the third quarter of the previous fiscal year. This is a growth of over 330%.
Scheduled revenues for the third quarter increased 345% to 0.79 billion euros, thanks to a strong recovery in traffic from 8.1 million to 31.1 million passengers (with a load factor of 84%).
TRAFFIC FORECAST
Ryanair updated its traffic forecasts that it would fly just under 100 million passengers this financial year. O'Leary said last week instead of expecting 165 million passengers in the 12 months to March 2022.
THE THIRD QUARTER RATES
Average rates in the third quarter were only € 25 (down by 24% compared to the same pre-Covid quarter).
THE STIMULATION OF PRICES
According to O'Leary, while there has been a "strong rebound" in bookings in recent weeks as concerns about the Omicron variant have started to fade, the outlook remains extremely uncertain. "Although bookings have improved recently, following the easing of travel restrictions, the booking curve remains very late and tight, so fourth quarter traffic requires significant stimulus at lower prices," the number pointed out. one of the Irish company.
PRESSURE ON RATES FROM COMPETITION
But the behavior of other low cost airlines could weigh on the rates of the summer season with a consequent increase in tickets.
As Reuters reports, rival carriers easyJet and Wizz both said they expect strong demand for the summer holidays, but Wizz said excess capacity in the coming months could weigh on profitability.
That's why Ryanair's Chief Financial Officer Neil Sorahan told Reuters in an interview that the fact that so many rivals were cutting capacity from pre-Covid levels meant that "there could absolutely be upward pressure on fares."
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/smartcity/ryanair-in-perdita-alzera-i-prezzi-dei-biglietti/ on Mon, 31 Jan 2022 12:02:30 +0000.