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Ryanair: losses, but it's green, customer friendly & ultra low cost

Premium Analysis

Ryanair Group, historically Europe's highest margin airline business over many years, recorded its worst ever annual result in the year to Mar-2021: a net loss of EUR1.0 billion.

This was exacerbated by a EUR200 million hedging ineffectiveness charge, but the underlying problem was that revenues fell by 81%, whereas operating costs fell by only 66%.

Nevertheless, a legacy of its years of strong profitability is a strong balance sheet. Together with its ultra-low unit cost base, this positions Ryanair well for the post-pandemic recovery, further helped by a pan-European network and a nimble approach to both tapping and stimulating demand. Ryanair expects to break even in FY2022.

Ryanair has improved its customer service over time, and the pandemic has taught it yet more about flexibility, refunds and customer communications. In a further sign of its ability to learn, Ryanair has become a green convert in recent years, and it aims to use SAF (sustainable aviation fuel) for 12.5% of flights by 2030.

However, its size, planned growth and previously dismissive rhetoric on climate change will make Ryanair a target for green campaigners in the recovery.

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