Ryanair cut its annual passenger target by a quarter on Monday and warned a second wave of COVID-19 infections could lower that further, sending its shares down 8% despite reporting a smaller than expected loss during its April-June lockdown.
The Irish airline posted an after-tax loss of 185 million euros for the three months to June 30, when it cut 99% of its capacity as Europe locked down in the face of the COVOD-19 pandemic.
That was its first-ever loss in the quarter, but less than the 232 million euros forecast in a company poll of analysts.
It, however, cut expectations for the rest of its financial year, which ends on March 31, saying it expected to fly 60 million passengers rather than the 80 million it forecast in May - and down from 149 million last year.
"Our full-year guidance of 60 million passengers is tentative at this point in time and it could go lower," Group Chief Executive Michael O'Leary said in a video presentation.
"A second wave of COVID-19 cases across Europe in late autumn ... is our biggest fear right now," O'Leary said.
Ryanair shares were down by 8% at 0723 GMT as investors digested the weaker outlook.
"The forthcoming winter season looks foreboding for even the strongest operators," Goodbody analyst Mark Simpson said in a note, forecasting "little upside to Ryanair until we get into the real recovery in their operations in the early spring".
O'Leary said that in addition to the closure of airport bases already announced in Frankfurt, Berlin and Dusseldorf, closures were likely in Spain and in Italy unless pay cuts can be agreed with staff.
The uncertainty means Ryanair cannot give a profit guidance for its financial year, though the airline expects to lose less in the current quarter than the last one, he added.
O'Leary said Ryanair had seen a hit to bookings in recent days in the wake of a surge of infections in Barcelona and expects "more of those kind of developments".
The British government abruptly imposed on Saturday a two-week quarantine on all travellers arriving from Spain due to the surge, a move Chief Financial Officer Neil Sorahan described as "regrettable". Ryanair has no plans to cut capacity between the two countries, Sorahan said.
Ryanair's cash burn has effectively ended, with its cash balance up to 3.9 billion euros at end-June from 3.8 billion at end-March.
Revenue was down 95% in the first quarter, while costs were down by 85%.
It hopes to fly 60% of its normal schedule in August and 70% in September. Ryanair's planes should be around 70% full in July and August, O'Leary said. (Reuters)