easyJet Share News (EZJ)

(Sharecast News) - Ryanair Holdings reported a third-quarter loss on Monday after the Omicron variant hit passenger numbers during the peak festive booking season.
The Irish low-cost carrier reported a net loss of €96m for the three months to 31 December, compared to a loss of €321m a year earlier. It made a profit of €88m in the third quarter of 2019.

Ryanair carried 31.1m passengers during the quarter, a 286% improvement on a year previously, while the load factor rose 14 points to 84%. Revenues jumped 331% to €1.47bn.

However, the airline said that while the load factor had improved in October and November, the rapid spread of Omicron in December had "severely damaged" peak Christmas and New Year bookings and fares.

Chief executive Michael O'Leary said: "The sudden emergence of the Omicron variant [in] late November, and the media hysteria it generated in December, forced many European governments to reimpose travel restrictions in the run-up to Christmas, which significantly weakened peak close-in Christmas and New Year bookings and fares.

"As a result, December traffic slowed to just 9.5m, with a lower 81% load factor, well behind the expected target of 11m."

Looking to the current quarter, O'Leary acknowledge that the January capacity had been cut by 33%, and conceded: "The outlook for pricing and yields for the remainder of the 2022 full year is hugely uncertain.

"While recent bookings have improved, the booking curve remains very late and close-in, so fourth-quarter traffic requires significant price stimulation at lower prices to quickly recover load factors."

Ryanair's full-year traffic forecast is unchanged at "just under" 100m passengers but the loss guidance remains within a wider than normal range of €250m to €450m, O'Leary noted.

"This outturn is hugely sensitive to any further positive or negative Covid news flow, and so we would caution all shareholders to expect further Covid disruptions in Europe and the rest of the world before we can finally declare the Covid crisis is behind us," he added.

Russ Mould, investment director AJ Bell, said: "The numbers are not as good as they might have been had Omicron not intervened.

"Ryanair - never usually known for its generosity to customers - is being forced to offer discounted tickets in the near-term to fill its flights. However, the longer-term picture for pricing could be more favourable, given the capacity that has come out of the market and likely pent-up demand for foreign travel over the summer.

"Ryanair has one of the strongest balance sheets in the industry, and it is very well placed for a full recovery in the aviation sector, with the means to invest in new routes and potentially even to swoop on ailing rivals. Notably, it has raised its 2026 annual passenger target today."

Victoria Scholar, head of investment at Interactive Investor, said: "These results were broadly in line with expectations. [It] has echoed the message from EasyJet and Wizz Air last week, forecasting short-term weakness but an improvement in capacity by summer, aiming to restore pre-Covid levels of demand this year.

"Arguably Ryanair is better positioned that its rivals to weather the backdrop of commodity inflation, with its carbon credits full hedged for 2022, while fuel is 100% hedged 'well below spot' for the rest of the year."