DUBLIN (Reuters) - Ireland’s 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 6% despite reporting a smaller than expected loss during its April-June lockdown.
Group Chief Executive Michael O’Leary said Ryanair (RYA.I) 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 O’Leary described as “a badly managed over-reaction”.
Ryanair posted an after-tax loss of 185 million euros (168 million pounds) for the three months to June 30, when it cut 99% of its capacity as Europe locked down in the face of COVOD-19.
That was its first-ever loss in the quarter, but less than the 232 million euros forecast in a company poll of analysts.
It rolled back expectations for the rest of its financial year ending on March 31, saying it will 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,” 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.”
The fall was due to cuts in the airline’s schedule between October and March, when it will run around 70% of last year’s schedule rather than the 80% flagged.
July and August had been boosted by bookings made before the COVID-19 crisis and O’Leary said he would be “much more wary and cautious” about September and October.
“I wouldn’t rule out that we will be taking out more capacity if we think bookings will remain weak in order to preserve cash,” he said.
The uncertainty means Ryanair cannot give a profit guidance for its financial year, though it expects to lose less in the current quarter than the last one, he added.
O’Leary said Ryanair may close bases in Spain and Italy where pilots are resisting temporary pay cuts.
Ryanair, however, will consider reversing a decision to close up to three German bases after pilots at the weekend signed up to the pay cuts, meaning 85% of pilots have now signed up, O’Leary said.
He also said he saw “extraordinary opportunities” once the pandemic is contained, comparing them to opportunities seized by Ryanair following the terrorist attacks of Sept. 11, 2001.
Reporting by Conor Humphries; Editing by Muralikumar Anantharaman and Emelia Sithole-Matarise