Will Ryanair’s (LON: RYA) demand revive on the back of Pfizer’s Covid-19 vaccine promises?

Summary

  • Ireland-based low-cost airline company Ryanair Holdings expects its air traffic to revive to near normal levels by next summer
  • CEO Michael O’Leary said that the passenger volumes could reach 75 to 80 per cent of the pre-Covid levels in 2021
  • He stated that the short-term outlook is encouraging but is less positive for long-haul travel

 

Low-cost airline company Ryanair Holdings PLC (LON: RYA) is dreaming big. The Irish company is expecting that air passenger numbers will bounce back to near normal levels by next summer relying on Pfizer Inc. and BioNTech SE's Covid-19 vaccine, which is being claimed to be 90 per cent effective. 

Most travel-related stocks witnessed a surge in share prices, which has come as a relief after such a dreaded year due to the Covid-19 pandemic. CEO Michael O’Leary said that the passenger volumes could reach between 75 to 80 per cent of the pre-Covid levels in 2021, particularly if a vaccine could be available by next year.

The aviation bodies and various industry experts have talked about how difficult the recovery process could be and bouncing back to the pre-Covid levels might be time-taking. Airline companies had reduced their capacity by more than 50 per cent, parking their fleets of aircraft, and cut short their workforces to reduce cost as the sluggish travel demand had led to losses.

 

Do Give It a Read: EasyJet, Ryanair flights fight coronavirus: What’s in store for airline operators

 

However, Ryanair Boss Michael O’Leary thinks distinctively. Sharing his perception, he said that the passenger volumes could bounce back by 2021. He had been hopeful that the coronavirus vaccines would reach out to people before the peak summer season in 2021. 

O’Leary said that Ryanair had restored its current pilots, cabin crew and aircraft to move towards growth. The intra-European tourism would witness an increase next year.

He added that November is not so good for travel, but hopes were pinned on Christmas. At the same time, he felt that the scenario is not likely to improve in the first few months of 2021. No changes would take place until Easter probably.

He stated that while the short-term outlook was encouraging, it was less positive for the long-haul travel. He said people could resist moving towards long-haul next year even when the beaches of Algarve, Balearics, Canaries, Greece, Italy, and Spain might be explored. These sights will see an increase in tourist footfall next year, and hence, the company needed to be prepared to provide capacity at low-cost.

However, O’Leary said that the coming months could be very rough for the aviation industry. Winters would be a write-off with the booking profile down to basically four or five weeks.

Ryanair had previously announced of cutting the capacity for winter, but not as gravely as its European competitor, EasyJet PLC (LON: EZJ).

On 11 November at 8:35 AM, EZJ shares were hovering on the London Stock Exchange at GBX 751.00. 

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