Ryanair Holdings has said that while it will not request or receive state aid to help it cope with the coronavirus crisis, it did manage to raise GBP600 million pounds (USD730 million) in unsecured debt last month from the UK's Covid Corporate Financing Facility (CCFF) state-backed loan scheme.
In its final full-year results statement to March 31, 2020, which confirmed a profit of EUR1.002 billion (USD1.09 billion), up 13% on the previous year, Ryanair listed seven European airlines that have received “unlawful state aid to date.”
When the group, which includes Ryanair and Ryanair UK as well as Lauda, Buzz (Poland), and Malta Air, “returns to scheduled flying from July, the competitive landscape in Europe will be distorted by unprecedented quantums of state aid (in breach of EU rules) [...]. We, therefore, expect that traffic on reduced flight schedules will be subject to significant price discounting, and below cost selling, from these flag carriers with huge state aid war chests,” the statement protested.
“Unlike many flag carrier competitors, Ryanair will not request or receive state aid. Consultations about base closures, pay cuts of up to 20%, unpaid leave, and up to 3,000 job cuts (mainly pilots and cabin crew) are underway with our people and our unions,” it added.
It will be hard to give guidance for the coming full year, it explained, but the crisis is likely to halve the group's passenger numbers.
Tapping the CCFF is “not illegal state aid” as it is open to all companies with an investment-grade credit rating and cannot be compared to the billions pledged to Air France and Lufthansa, chief financial officer Neil Sorahan argued.
Though it has cut costs such as management salaries and has suspended share buybacks and capital investments, a loss of over EUR200 million (USD217 million) is anticipated for the first quarter and a smaller loss for the second, the financial statement said.
