(Correcting that passengers fell to 500,000.)
(Alliance News) - Ryanair Holdings PLC on Monday turned to a loss in the first quarter due to travel restrictions put in place because of the Covid-19 pandemic.
The budget airline swung to a loss of GBP185 million in the first quarter ended June 30 from a net profit of GBP243 million a year ago.
The company saw 99% of its fleet grounded from mid-March to the end of June due to travel restrictions caused by Covid-19. Passengers fell to 500,000 in the quarter from 41.9 million a year ago.
"The past quarter was the most challenging in Ryanair's 35 year history. Covid-19 grounded the group's fleet for almost 4 months as EU governments imposed flight or travel bans and widespread population lockdowns," Ryanair said.
Ryanair implemented an 85% reduction in costs during the quarter which it said was not enough to offset the heavy revenue losses.
The company's balance sheet consists of GBP3.9 billion in cash at June 30, one of the strongest in the industry according to Ryanair.
"Since mid-March, the group has moved quickly and smartly to preserve cash, cut costs, cancel share buybacks and defer all non-essential capital expenditure. This has protected the group's very strong liquidity position as it returns to flying in July," Ryanair said.
The company continued: "The group currently expects to carry approximately 60 million passengers in this financial year and expects to record a smaller loss in the second quarter (which reflects a gradual return to flying from July 1) than in the first quarter.
"However, the Ryanair Group will emerge from the Covid-19 crisis with a much lower cost base, which will be essential to fund lower fares as the group competes against unlawfully state aided flag carriers."
Ryanair cannot provide any financial guidance at the moment due to the uncertainty posed by Covid-19.
Ryanair resumed flights across the majority of its network in July and expects to operate around 40% of its normal schedule this month, rising to 60% in August and hopefully 70% in September.
By Greg Roxburgh; gregroxburgh@alliancenews.com
Copyright 2020 Alliance News Limited. All Rights Reserved.
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