Ryanair warns of €450m losses as Omicron sparks tighter travel curbs

Ryanair will cut scheduled flights next month as European governments tighten travel bans to slow the spread of Covid's Omicron strain.

The Irish giant warned that losses could hit €450 million at the end of its financial year following a slide in flight bookings in the face of renewed Covid travel curbs.

“This sudden downturn has also caused Ryanair this week to cut its planned January schedule capacity by 33 per cent,” the airline said.

Consequently Ryanair will carry between six million and seven million passengers in January, instead of an anticipated 10 million.

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The carrier blamed travel restrictions, including bans on UK tourists announced last weekend by France and Germany, along with the suspension of all EU-Morocco flights, for the move.

France banned UK citizens from travelling there without “an essential reason” from Saturday. Germany followed suit on Sunday. Neither country’s ban applies to its own nationals or other EU citizens.

Ryanair previously predicted that it would lose between €100 million and €200 million in its current financial year, which ends on March 31st.

However, it warned on Wednesday that net losses could range from “€250 million to €450 million” in the 12 months to the end of next March.

‘Close-in’

The airline said falls in “close-in” or late Christmas and new year bookings, following government curbs imposed in response to the rise of Covid’s Omicron strain, were responsible for the likely rise in losses.

Ryanair expects to fly between nine million and 9.5 million passengers this month, against an original forecast of 10 million to 11 million.

The airline did not rule out further capacity cuts after January if governments continued with curbs aimed at limiting travel.

“In light of the current uncertainty about the Omicron variant, and intra-Europe travel restrictions, no schedule cutbacks have yet been decided for February or March 2022,” said Ryanair.

“These schedules will be revisited in January as more scientific information becomes available on the Omicron variant, its impact on hospitalisations, European population and/or travel restrictions in February or March.”

Overall, Ryanair believes just under 100 million passengers will travel with it over the 12 months to March 31st.

It had previously expected to fly more than 100 million people in the current financial year.

‘Hugely sensitive’

However, Ryanair cautioned that the figures were “hugely sensitive” to any further positive or negative Covid news.

“Ryanair hopes to have more clarity, especially on the impact of Omicron on intra-European travel restrictions, in time for its third quarter results on January 31st next,” the airline said.

The carrier, Europe’s biggest, had been cutting fares in recent months to boost demand in an air travel market still recovering from widespread bans.

Last month it said forward bookings for Christmas and Easter were strong, but added that it expected to continue stimulating demand during quieter periods in the closing weeks of its financial year.

Ryanair’s losses in the six months to September 30th – the first half of its financial year – fell to €48 million from €411 million during the same period in 2020.

It earned €224.6 million profit after tax in its second quarter, the peak holiday months of July, August and September.

Passenger numbers grew steadily since the EU launched the digital Covid certificate in July, paving the way for travel’s reopening.

Numbers peaked at 11.3 million in October from 9.3 million in July. The airline was selling more than 80 per cent of the seats on its flights.