Major low-cost airlines results

The airline industry knew that the winter airline results were going to be bad.  No surprise then with figures published last week showing Ryanair at £701m and easyJet £645m in the red.

EasyJet says it is burning through £5.5m cash a day and cannot predict what the numbers are going to be for the full year when the 2020/21 figures are published in September.  At the present time only 15% of its 330 aircraft are flying although Chief Executive Johan Lundgren says the airline can ramp up operations quickly to match demands once opportunities are available in Europe. The carrier has 14,000 employees although how many are on furlough is not known.

Ryanair is a larger operation with 450 aircraft and a nominal 17,000 staff.

In announcing the results Michael O’Leary was his usual bullish self: “Ryanair has used the last 12 months to significantly reduce our operating costs. We're going to expand our ability to grow in the next four or five years with the Gamechanger order. We will be expanding in a market in Europe where significant capacity has been taken out by failing – airline competitors that have either failed or that have significantly cut capacity. And we will be competing in the next number of years with a whole series of legacy airlines in Europe who have received huge quantum of state aid. But as a result of receiving that state aid, they've been unable to tackle their high-cost base. They will be unable to compete with Ryanair into the future from a cost perspective, although in the short term, it's undoubted that we will be facing the low-cost selling by some of those airlines.

www.easyjet.com    

www.ryanair.com

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Jim Carter, London

Strange goings on. Wizz, registered in Guernsey continuous to expand, and now has Middle East backers. O’Leary seems to be too proud to quit. And Lungren thought that all he needed to do was transform easyJet into a holiday package unit. I wish both them luck. But I’m holding on to my shares Jim Carter.