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Ryanair Reports €1 Billion Annual Profit But Refuses to Estimate COVID-19 Damage for Year Ahead

Ryanair Reports €1 Billion Annual Profit But Refuses to Estimate COVID-19 Damage for Year Ahead

European low-cost airline Ryanair reported a €1 billion annual profit on Monday but declined to provide forward guidance owing to the uncertainty caused by the COVID-19 pandemic. Ryanair plans to axe 3,000 front line pilot and cabin crew jobs because of the crisis and has told 250 office employees not to return to work as it seeks to slash costs in response to the pandemic.

The Dublin-based budget carrier reported a 13 per cent rise in annual profits from €885 million in 2019, helped in part by a 6 per cent increase in ancillary sales per passenger. On average, Ryanair says it makes €20 per passenger on additional items like onboard food and drink purchases, priority boarding, scratch card sales and excess luggage.

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Photo Credit: Ryanair

Passenger traffic for the year also grew by 4 per cent to 149 million passengers but the majority of the airline’s fleet has been grounded since mid-March. Ryanair now says it expects to operate less than 1 per cent of its normal schedule throughout the first quarter but plans a gradual return to service from July onwards.

Michael O’Leary, the Ryanair Group chief executive has suggested there could be a quick recovery in travel demand helped along by a price war with its competitors. The airline has, however, warned that capacity will likely be capped at around 50 per cent compared to its original plans for the second quarter.

Ryanair has already spelt out how it intends to return to near-normal operations in the face of the COVID-19 pandemic by mandating face masks for passengers and crew and making passengers ask permission to use the lavatory. O’Leary has rejected the idea of social distancing by blocking the middle seats on its flights, calling the idea “idiotic”.

The often outspoken airline executive has also hit out at plans by the British government to introduce a 14-day quarantine for all new arrivals. The quarantine proposals have been criticised by health and aviation experts alike but is likely to be introduced in the coming weeks.

Despite current woes, the airline said they “remain fans of” the controversial Boeing 737MAX aircraft. Ryanair now expects to start taking delivery of the “gamechanger” planes in October, should Boeing win federal recertification in late Summer as it currently forecasts.

The airline said it would not conclude a compensation agreement for the 737MAX delays until after the aircraft had been recertified.

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