Irish low-cost carrier Ryanair has deepened its full-year net loss expectations to between €250 million ($282 million) and €450 million as a result of a sharp drop in demand because of fresh travel restrictions prompted by the emergence of the Omicron variant.
Ryanair had previously been guiding for a net loss of €100-€200 million for the year ending March 2022 having seen a pick-up in activity since border restrictions began easing in June.
The carrier says the more than doubling of its full-year loss forecast is the result of weakened close-in Christmas and New Year bookings, which have followed the fresh travel restrictions since concerns around the Omicron variant emerged. This weakening in demand has also prompted the carrier to cut its planned capacity for January by a third.
Specifically it cites recent restrictions imposed on UK arrivals by the French and German governments, together with the suspension of EU flights into Morocco, as factors in lowering its December traffic projection from between 10 and 11 million passengers to a range of 9 and 9.5 million.
As a result of its reduced capacity in January, Ryanair expects traffic for the month to be around 6-7 million. It had been expecting to carry around 10 million passengers in January.
Ryanair though has, for now at least, left its February and March schedule unchanged. ”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,” the carrier says.
”As a result of these new Covid developments, it is now likely that Ryanair’s full-year traffic forecast will be just under 100 million passengers (previously guided at just over 100 million), and the expected net loss for the full year is likely to be within a new range of €250 million to €450 million,” it says.
“However, these figures are hugely sensitive to any further positive or negative Covid news flow. Ryanair hopes to have more clarity, especially on the impact of Omicron on intra-Europe travel restrictions, in time for its [third quarter] results on 31 January next.”