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RYAAY Stock Up 5.5% in Pre-market, Ryanair Reports €226M Net Loss During Its Q2 2020

UTC by Steve Muchoki · 3 min read
RYAAY Stock Up 5.5% in Pre-market, Ryanair Reports €226M Net Loss During Its Q2 2020
Photo: Unsplash

Over the past six months, Ryanair experienced an 80% decline in the number of customers.

Transportation and logistics company Ryanair Holdings Plc (NASDAQ: RYAAY) continues to feel the coronavirus market pressure as it indicated in its recent quarterly report. Notably, for its Q2 that ended on September 30, Ryanair reported a net loss of €225.5 million, compared with a profit of €910.2 million reported last year during the same period.

Ryanair (RYAAY) Stock after Q2 Report

However, Ryanair shares were up approximately 5.5% to trade around $85.05 during Monday’s pre-market. The long term past performance of Ryanair shares has not been positive according to metrics provided by MarketWatch.

In the past year, Ryanair shares are down 3.3%. During the pandemic – year to date- Ryanair shares have dropped approximately 8.0%. However, they have added nearly 8% in the past three months. They have dropped 2.01% and 6.92% in the past one month and five days respectively.

The mixed performance can be largely attributed to the market uncertainty due to the ongoing coronavirus. There are fears that a new wave of coronavirus infection across Europe where the company mostly operates could erupt before any vaccine is approved. Ryanair has a market capitalization of around $15.5 billion with 225.06 million outstanding shares.

Ryanair and Market Update

Having been rated by 22 Wall Street analysts, Ryanair shares received an average of Over rating. However, the rating was before the company announced on Monday that it expects significantly reduced flying schedules in the next six months. Therefore indicating more volatility ahead in the Ryanair shares.

The United Kingdom government, the French and German governments are looking to fresh lockdowns to prevent possible spike in coronavirus infection.

The expected lockdown measures were not pleasing to Michael O’Leary, Ryanair CEO. O’Leary stated:

“The WHO (World Health Organization) themselves confirmed that lockdowns should be the last option, lockdowns are essentially a failure.”

He fired at different governments for not being aggressive in mass testing and also not tracing cases to the zero level. With a lockdown looming ahead, the grounded fleet of planes Ryanair has might continue laying down longer than anticipated.

Over the past six months, Ryanair experienced an 80% decline in the number of customers. In addition to around 78% decline in revenue, Ryanair shares have a hard time competing with other global companies that are possibly backed by better-balanced sheets and government incentives. O’Leary advised European governments to introduce pre-departure testing to save the collapsing airline industry.

“It is clear that air travel is in the frontline of this pandemic… And we think the only way out of this is for governments, the British, the Irish and other European governments, to introduce pre-departure testing,” O’Leary told CNBC.

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Steve Muchoki

A financial analyst who sees positive income in both directions of the market (bulls & bears). Bitcoin is my crypto safe haven, free from government conspiracies. Mythology is my mystery! "You cannot enslave a mind that knows itself. That values itself. That understands itself."

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