Ryanair keeps profit guidance, though March traffic halves

  • Ryanair keeps profit guidance, though March traffic halves

Ryanair keeps profit guidance, though March traffic halves

Irish-based budget airline Ryanair said it expects to report an after-tax profit between €950 million ($1.025 billion) and €1 billion ($1.08 billion) for the fiscal year ended March 31.

Shares in budget airline Ryanair (RYA) were steady at €8.56 on Friday as the company said it still expected to report profit after taxes of close to €1bn for the year to March 2020, but pulled its 2021 guidance due to a hit from fuel hedging.

That compared to 4 billion euros in Ryanair's last update on March 16, which Goodbody analyst Mark Simpson said suggested it was burning through 100 million euros a week in its initial handling of the crisis as it grounds planes.

In March, Ryanair Group handled a total of 5.7 million passengers, down 47.7 percent compared with the 10.9 million passengers handled by the group in the same month of previous year, the airline said in a statement.

For now, the carrier expects its fleet to be grounded at least through the end of May.

The 300 million euro exceptional charge it will take for 2020 relates to the ineffectiveness on its 2021 fuel hedges.

"Ryanair Group Airlines continue to work with European Union governments to maintain minimum flight links for emergency reasons, and to operate rescue and medical flights when requested to do so".

The company has already slashed all pay including senior managers by 50% for April and May in a bid to cut costs as its income has collapsed.

Due to the continuing uncertainties of the current crisis, Ryanair added that it could not provide earnings guidance for the coming financial year. At the start of March, Ryanair had been on track to achieve a full-year total of 154m.

Analysts at Davy Research said Ryanair had "one of the strongest balance sheets in the industry", pointing to its year-end cash position of €3.8bn and 327 (77%) of the group's owned fleet being unencumbered and debt-free.