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Coronavirus Woes Mar Ryanair's (RYAAY) May Traffic Results

Zacks Equity Research

With the coronavirus pandemic disrupting air-travel demand, European low-cost carrier Ryanair Holdings RYAAY reported a 99.5% year-over-year plunge in May traffic to merely 0.07 million guests. As wide-spread travel restrictions are still in place, the carrier’s LaudaMotion unit in Austria did not carry any passenger during the month.

This Zacks Rank #2 (Buy) Irish carrier operated 701 scheduled flights in May including those for rescue operations, relief and medicine supply on behalf of various EU governments. Moreover, 99% of those flights arrived on time. On a rolling annual basis, total traffic at Ryanair (including the LaudaMotion unit) decreased 17% to 121 million. Load factor (% of seats filled with passengers) was 95% on a rolling annual basis. Due to travel bans and curbs, Ryanair expects its traffic numbers for June to be minimal too.

To match this extremely low demand scenario, Ryanair trimmed its flight capacity significantly. Notably, it is not the only carrier to have slashed capacity due to the pandemic-borne crisis. U.S.-based carriers including American Airlines AAL and United Airlines UAL, both currently carrying a Zacks Rank #3 (Hold), also suspended various flights in the wake of the coronavirus onslaught.

The traffic report apart, Ryanair recently grabbed headlines for challengingthe government rescue package for the Zacks #3 Ranked German carrier Deutsche Lufthansa DLAKY. This European low-cost airline fears that the huge state aid, which will be effective following the European Commission’s approval, will tamper a healthy competition and deny a fair play to low-cost carriers like Ryanair.

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Ryanair Holdings PLC (RYAAY) : Free Stock Analysis Report
 
United Airlines Holdings Inc (UAL) : Free Stock Analysis Report
 
American Airlines Group Inc. (AAL) : Free Stock Analysis Report
 
Deutsche Lufthansa AG (DLAKY) : Free Stock Analysis Report
 
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