Ryanair deals with coronavirus woes while Brexit waits in the wings

The severe losses and collapse in traffic reported by Ryanair for the three months ended June 30th should come as no surprise, given that the period covers the worst of the Covid-19 lockdown, which grounded air travel around Europe.

Ryanair lost €185 million during the period, the first of its 2021 financial year, as passenger numbers fell by 99 per cent to 500,000 people from 41.9 million during the same three months in 2019. Revenue fell by almost €2.2 billion or 95 per cent to €125 million. Chief executive Michael O’Leary called it the most challenging in the airline’s 35-year history.

However, the company’s statement made it clear that there are plenty more challenges to come. The airline would not give markets any guidance for its full year, but did say that losses would abate in the current quarter as it resumed flying part of its schedule on July 1st.

Not surprisingly, the airline group’s biggest fear remains a second coronavirus wave to coincide with the autumn-winter flu season. It argues that the only way to avoid further lockdowns and restrictions is for countries, airlines and passengers to follow EU guidelines for safe air travel.

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While Covid-19 has dwarfed any other issue in aviation, Ryanair noted that Brexit has not gone away. The group hopes that the UK and EU will have worked out a deal allowing for air travel to continue before the current transition period ends in December.

Its statement on Monday stressed that it has taken steps to ensure it would remain majority EU-owned in the event of a "hard" Brexit, allowing its airlines here, in Austria, Malta and Poland to continue operating.

As it has a UK airline operator’s certificate, Ryanair also expects to benefit from any bilateral air travel agreements negotiated by the British government with non-EU countries. Nevertheless, the airline expects some adverse trading consequences from Brexit.