Ryanair reported a 78% drop in revenue between April and September
The low-cost airline expects a significantly less busy flight schedule in the future amid new measures throughout Europe
Ryanair share price closed almost 4% higher despite declining revenues
The share price of Ryanair (LON: RYA) rose by almost 4% yesterday, despite the low-cost airline reporting a 78% drop in revenues between April and September.
Fundamental analysis: Air travel in Europe will remain “restrained” in the coming years
Ryanair today announced its decision to significantly reduce its flight schedule for the next six months as European countries reintroduce measures to curb the spread of Covid-19.
Ryanair has suffered a severe blow following the introduction of closure measures following the outbreak in March. The airline reported a 78% drop in revenues for the period April to September compared to the same period last year.
During this period, the number of customers dropped by 80%, Ryanair said. The company expects to have a much lower load factor in the future due to the recent measures taken throughout Europe.
The low-cost airline issued the statement just two days after the resumption of a nationwide ban in England, which will take effect on November 5. France and Germany already imposed a nationwide ban last week, while other European countries recently also tightened measures to combat the second wave.
“The WHO (World Health Organization) itself confirmed that closures should be the last option, closures are essentially a failure,” said Michael O’Leary, Chief Executive of Ryanair.
“If we had promised a more aggressive testing and traceability regime or how (the British Prime Minister) promised Boris Johnson world-class testing and traceability facilities, which we clearly do not have in the UK, we could and would have avoided a second lockdown,” he added.
O’Leary pointed out that a core number of important flights will take place this winter, but that this number is “less than a third of our normal flights”.
Nevertheless, Ryanair said it expects to take advantage of some opportunities during the crisis, such as fleet development and lower airport costs.
Technical analysis: Confluence continues to provide support
The Ryanair share price closed the day 3.84% higher after the sellers again failed to break the support line near 11.60 am. This is the area where the 100 DMA and 200 DMA that underlie the price action meet.
Daily chart of the Ryanair share (TradingView)
On the top side, layers above the 13.00 o’clock handle will continue to act as resistance. Any movement above 13.33 will result in a new 8 month high for the RYA.
The European low-cost airline Ryanair said it would significantly reduce its flight schedule for the next 6 months due to the reintroduction of closure measures in Europe. Nevertheless the shares increased by almost 4%.