Ryanair slashed its annual traffic forecast by around 5 million passengers on Thursday, saying fresh lockdowns in Britain and Ireland targeting a highly contagious new variant of COVID-19 would leave the countries with “few, if any” flights.
The Irish low-cost carrier, Europe’s largest, also harshly criticised public health measures, saying Ireland’s travel curbs were “inexplicable and ineffective” and called on the country and Britain to accelerate the pace of vaccine rollouts.
Both governments have said the rapid spread of a new, more transmissible coronavirus variant forced strict curbs on travel and say they are distributing vaccines as fast as they receive them.
The British and Irish measures “will result in few, if any, flights being operated to/from Ireland or the UK from the end of Jan until such time as these draconian travel restrictions are removed,” Ryanair said in a statement.
The airline will significantly reduce its flight schedules from Jan. 21 until the end of the current lockdown, it said, forecasting under 1.25 million passengers in January and as few as 500,000 passengers in February and March.
As a result, Ryanair said it had cut its traffic forecast for its financial year, which ends on March 31, from its current forecast of “below 35 million” to between 26 and 30 million passengers.
“Ryanair does not expect these flight cuts and further traffic reductions will materially affect its net loss for the year to 31 March 2021 since many of these flights would have been loss making,” the statement said.
Citi analysts said in a note that the traffic cuts would likely increase Ryanair’s net loss in the current financial year to 908 million euros from an earlier forecast of 730 million. It cut its profit forecast for the next financial year to 582 million euros from 641 million.
Goodbody analyst Mark Simpson said pre-booking activity for spring and summer appeared to be “just not there.” That will defer the usual cash inflows expected by the industry at this time of the year, he said, though this will likely hit Ryanair’s rivals more.
Ryanair shares were down 2% at 1420 GMT.
The British government on Wednesday introduced legislation that would enable its current lockdown to remain in place until the end of March although Prime Minister Boris Johnson said he did not expect the full national lockdown to continue until then.
The Irish government on Wednesday said people should remain home except for essential journeys until at least the end of January, but Deputy Prime Minister Leo Varadkar said hospitality businesses needed to face the likelihood they would be closed until the end of March.
Ryanair criticised Ireland’s travel curbs, which include the requirement of a COVID-19 test for people arriving from Britain but not from the neighbouring British region of Northern Ireland.