Ryanair Slashes Flight Schedule After U.K. Lockdown
(Bloomberg) -- Ryanair Holdings Plc slashed its winter schedule, while denouncing new coronavirus-related travel restrictions as “draconian” and calling for faster vaccine rollouts in the U.K. and its home country of Ireland.
Europe’s biggest discount airline said it will offer few flights from Jan. 21 until the travel curbs are lifted. The cutbacks go beyond ones made earlier in the week by rivals EasyJet Plc, British Airways and TUI AG. Dublin-based Ryanair said on its website that passenger numbers will fall below 1.25 million in January, then drop to as few as 500,000 for February and March.
Levels that low would be reminiscent of last April and May, when air travel came to a near-standstill as Covid-19 first swept Europe. They’d also bring Ryanair right up to the early April Easter break that usually marks an upswing in demand as the weather warms. Airlines are counting on a rebound in traffic after missing out on the summer season last year.
“Winter is always loss-making,” said Stephen Furlong, an airline analyst at Davy Stockbrokers in Dublin. “What is crucial for Ryanair, and indeed the industry, is that bookings for the summer start coming in.”
Ryanair’s move will pull down traffic for the fiscal year ending in March, though the cutbacks won’t hurt profit because many of the trips would have lost money. The annual passenger tally is now seen at between 26 million and 30 million, versus the earlier outlook for “below 35 million,” it said.
Ryanair traded 1.8% lower as of 3:41 p.m. in Dublin. The stock rose 11% in 2020, one of only five to gain in the 27-member Bloomberg World Airlines Index.
The company called Ireland’s lockdowns “inexplicable and ineffective,” given that even after Brexit there is still an open border between the Irish Republic and Northern Ireland, which is part of the U.K.
The fast-spreading virus strain that’s driven up U.K. case counts has dashed airline-industry hopes of impending relief from 2020’s unrelenting downturn. Prime Minister Boris Johnson late Monday announced restrictions that will keep most people at home until mid-February, when vaccines are able to stem the worst infection rates since the start of the outbreak.
Europe is also braced for further virus disruption. Germany is in lockdown until the end of the month, as statistics from air traffic authority DFS show that air traffic last year fell to the lowest level since the fall of the Berlin Wall in 1989.
Italy extended its restrictions until Jan. 15, requiring citizens returning from the U.K. to take a Covid-19 test before and after flight, followed by a 14-day quarantine. Travel in the opposite direction is only permitted for work and other essential reasons, and requires a quarantine upon return.
What Bloomberg Intelligence Says:
“Amid lockdown restrictions in the U.K. and elsewhere, the carrier’s 4Q-1Q traffic may be be suppressed by over 90%, and may remain well below normal levels during its lucrative summer travel season”
-- Rob Barnett, BI transportation analyst
Other airlines have also trimmed schedules. EasyJet, Britain’s biggest discounter, pared back its flying program earlier this week to prioritize essential connections between key U.K. cities and a handful of international routes. BA said it’ll prioritize crucial links, while TUI halted all package holidays from the U.K. through mid-February.
In figures released this week, the impact of the virus on airlines was laid bare. Norwegian Air Shuttle ASA, which has filed for insolvency protection, was worst hit, with passenger numbers dropping 81% from the previous year.
Norwegian’s mean flying distance dropped by almost two-thirds as the pandemic effectively grounded the low-cost trans-Atlantic flights for which it’s best known. As of December, the company was on average operating just nine planes mainly on domestic routes.
Ryanair’s forecast marks a further reduction from the 149 million passengers the airline carried in fiscal 2020. It’s had to downgrade expectations throughout the crisis, with estimates issued at the height of the first lockdown in May envisaging as many as 80 million passengers.
Before the pandemic Ryanair had targeted a tally of 154 million for fiscal 2021.
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