Ryanair has warned it will carry fewer passengers than expected over the next year and struggle to turn a profit because of the slow rollout of vaccinations across much of Europe.
The low-cost carrier said lockdowns and travel restrictions had hit travel during the Easter period, and it expected a delayed recovery in traffic into the summer season.
It now forecasts passenger numbers in the year ending March 2022 towards the lower end of a previously guided range of between 80m and 120m.
The warning came as new figures revealed the depth of the crisis facing the industry, with bookings for this summer on airlines across Europe at under a fifth of normal levels.
Although several airlines have trumpeted an increase in summer business, the International Air Transport Association on Wednesday said passenger bookings for travel across Europe between May and September had reached just 15 per cent of 2019 levels by March 20.
Ryanair warned that some analyst forecasts predicting the carrier would return to profit over the next year were too optimistic.
“While it is not possible at this time to provide meaningful full-year 2022 profit guidance, we do not share the recent optimism of certain analysts,” Ryanair said, adding that it expected to approximately break even. Analysts had forecast profit after tax of €277m, according to Bloomberg.
Just two weeks ago Michael O’Leary, Ryanair’s chief executive, struck a more bullish tone as he predicted a strong summer of travel across Europe, saying the airline would be flying 80 per cent of normal schedules by June.
Analysts believe Ryanair will, over the long term, emerge from the crisis as a winner in European aviation, helped by a low cost base and strong balance sheet.
For now, however, the airline remains exposed to travel restrictions and rising cases across much of continental Europe.
The UK government has taken a cautious approach to reopening its borders, which are closed until mid-May at the earliest, and this week Boris Johnson, the prime minister, warned it was still too soon to book a summer holiday.
“The current delay on UK government travel guidance is playing havoc with airline planning,” said Mark Simpson, an analyst at Goodbody.
Parts of continental Europe are back in lockdown as caseloads rise, leaving an uncertain outlook for the crucial summer season, which should have begun over Easter.
Most airlines have been cautious in predicting their summer plans. Sean Doyle, the chief executive of British Airways, on Tuesday said he would wait for further guidance on summer holidays from the UK government before confirming flight schedules.
Ryanair expects to record a net loss before exceptional items of between €800m and €850m for the year ending March 2021, slightly better than its previously guided range of between €850m to €950m. The airline carried 27.5m passengers over the year, down from 149m in the previous 12 months.
Ryanair’s share price closed at €16.85 on Wednesday, more-or-less unchanged on the previous session.
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