Ryanair cuts fares to fill winter flights as losses set to top £85million

The budget airline yesterday reported a recovery in passenger numbers as Covid travel curbs are eased. And ambitious bosses raised a longer-term target to carry 225 million passengers a year by 2026 from 220 million.

But in the short term the firm said it was taking a financial hit just to fill planes over the winter months.

That is good for passengers looking for cheap fares to travel to Europe but bad for airlines’ profit margins.

While hard to predict the rest of its financial year, Ryanair said it expects to post an annual loss of anywhere from £85million to £170million.

Boss Michael O’Leary said: “This out-turn will be crucially dependent on the continued rollout of vaccines and no adverse Covid-19 developments.”

The loss comes despite a bounceback over the past six months which saw Ryanair revenues jump 83 percent year-on-year to £1.8billion and losses narrow from nearly £350million to £40million.

Ryanair carried just over 39 million passengers, more than double the 17 million by the same time last year when the industry was reeling from the pandemic restrictions.

Mr O’Leary said the industry was seeing a “very strong recovery” across Europe but that reducing fares would be needed to fill aircraft.

One way of reaching the new 225 million passenger target in four years would be with a new fleet of Boeing 737 jets that offer four percent more seats ‑ but consume 16 percent less fuel.

Mr O’Leary also revealed the company was considering delisting shares from the London Stock Exchange following Brexit. 

He said: “Trading on the Stock Exchange as a percentage of overall trading volume in Ryanair’s ordinary shares has reduced materially during 2021.”

Nicholas Hyett, Equity Analyst at broker Hargreaves Lansdown, said the loss had rattled Ryanair shares.

He added: “With plenty of uncertainty about the shape of the economic recovery, the eventual bill could be even higher. However, there are signs Ryanair will emerge from the pandemic stronger than it went in.”