Why Omicron Travel Restrictions Are Bad News For Ryanair
Omicron is behind unexpectedly low passenger numbers and a doubling of the forecasted net loss for Ryanair this northern winter. On Wednesday, the Dublin-based low-cost carrier issued a revised annual net loss warning. That warning flagged anticipated yearly net losses will increase from the €100 million to €200 million range to the €250 million to €450 million range.
Ryanair has doubled its expected annual net losses in the wake of the omicron outbreak. Photo: Ryanair
January schedules cut, no decision yet on February & March schedules
According to Ryanair, the omicron variant and recent Government travel restrictions across Europe have notably weakened close-in Christmas and New Year bookings. This sudden downturn has also caused Ryanair to cut its planned January schedule capacity by 33% this week.
“In light of the current uncertainty about the omicron variant, and intra-Europe travel restrictions, no schedule cutbacks have yet been decided for February or March 2022,” says Ryanair in a statement.
“These schedules will be revisited in January as more scientific information becomes available on the omicron variant, its impact on hospitalizations, European population, and/or travel restrictions in February or March.”
Ryanair has cut its January schedules by 33%. Photo: Ryanair
How omicron plays out will impact Ryanair’s anticipated losses
Recent Government travel restrictions, in particular, last weekend’s ban on UK arrivals into France and Germany, have impacted the number of passengers Ryanair expects to fly this month. Ryanair was anticipating flying between 10 and 11 million passengers in December. The airline has revised that back to between nine and nine a half million.
January’s passenger numbers are revised downwards from around 10 million to between six and seven million. As a result, Ryanair now expects to fly slightly less than 100 million passengers in the 12 months to March 31, 2022. At the same time, net annual losses are also expected to increase significantly.
However, Ryanair notes these figures are very sensitive to any further positive or negative Omicron-related news.
Ryanair’s Michael O’Leary is critical of how the UK Government has handled omicron. Photo: Getty Images
Ryanair’s CEO flays the UK Government
With much of Ryanair’s business based in the UK, the airline’s CEO Michael O’Leary has been critical of the UK Government’s recent omicron response. Last week, Mr O’Leary told The Guardian newspaper;
“People in the UK recognize that the government there are idiots. You wouldn’t rely on Boris Johnson or Grant Shapps or Dominic Raab, who can’t add or subtract – would you want your journey dependent on the intervention of those idiots? The answer is no.”
Ryanair likes to fill its planes, even if it has to offer single-digit fares to do so. But all the cheap fares in the world won’t lure passengers onboard if they aren’t sure constantly changing travel rules won’t (often seriously) disrupt their trip.
“What deters booking is the whole uncertainty – this idea that if I travel abroad if the government changes the rules in 24 hours, I could be stranded, even if COVID-free and vaccinated … travel only exists on a degree of confidence,” Mr O’Leary said.
The Ryanair boss saves his scorn for the UK Government. He says things are still relatively trouble-free in mainland Europe from an operational perspective. While Omicron is an issue in mainland Europe, O’Leary argues mainland European governments are being more considered in their responses.
But it is a fast-changing landscape. Ryanair will issue third-quarter profit results on January 31. By then, the airline hopes to have a better handle on how omicron and intra-Europe travel restrictions are impacting their passenger numbers and bottom line.
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