Ryanair posts quarterly loss but says fares could rise this summer

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DUBLIN (Reuters) -Ryanair reported a loss of 96 million euros ($107 million) for the final three months of 2021 but said it was hopeful that rivals’ cuts to capacity may help push prices up in the key summer season.

The result was in line with a consensus estimate of a 101 million euros loss in a company poll of analysts. The airline lost 306 million euros in the same quarter of 2020 and made a profit of 88 million in the last three months of 2019.

The Irish low-cost airline, Europe’s largest by passenger numbers, reiterated its forecast loss for its full financial year, which ends on March 31, at between 250 million euros and 450 million euros.

Chief Executive Michael O’Leary said that while there had been a “very strong bounce back” in bookings in recent weeks as concerns about the Omicron variant began to fade, the outlook remained hugely uncertain.

“While recent bookings have improved, following easing of travel restrictions, the booking curve remains very late and close-in, so Q4 traffic requires significant price stimulation at lower prices,” O’Leary said.

Rivals easyJet (LON:EZJ) and Wizz have both said they expect strong demand for summer holidays, but Wizz said excess capacity in the coming months could weigh on profitability.

Ryanair Chief Financial Officer Neil Sorahan told Reuters in an interview that the fact so many rivals were cutting capacity compared to pre-COVID levels meant “there absolutely could be upward pressure on fares.”

He added that if Ryanair did need to cut fares to stimulate demand, its relatively large fuel hedging position means it is in a much better position than rivals to do so.

Ryanair reaffirmed its expectation that it would fly just under 100 million passengers this financial year. O’Leary last week said he expected to fly 165 million passengers in the 12 months to March 2022.

Ryanair is “nowhere close” to a new deal with Boeing (NYSE:BA) on a new order for 737 jets, Sorahan said.

The Irish airline in September abruptly ended talks with the U.S. planemaker over an order of 737 MAX 10 jets worth tens of billions of dollars because of differences over price but has said it remains in contact with Boeing, its dominant supplier.