Ryanair warns it could leave London Stock Exchange as budget airline sees losses narrow to £40.6m
- UK trading volume in Ryanair shares has plummeted after investor restrictions
- Passenger numbers double as losses fall from losses narrowing from £347m
- Ryanair described Boeing’s 737 MAX 10 aircraft price hike as ‘delusionary’
Ryanair is considering delisting from the London Stock Exchange amid a sharp drop in British shareholder trading volumes after the budget airline restricted voting rights in the wake of Brexit.
The firm informed investors of its plans on Monday as shares rose 2.4 per cent in response to Ryanair passenger numbers more than doubling in the six months to the end of September, compared to the same time last year, as losses narrowed sharply.
Since the beginning of 2021, UK nationals, like all other non-EU nationals, are no longer permitted to acquire ordinary shares in Ryanair, which is keen to ensure it remains majority EU-owned and retains full licensing and flight rights in the bloc post-Brexit.
The budget airline is determined to remain majority EU-owned and retains full licensing and flight rights in the bloc post-Brexit
Ryanair has a primary listing on Euronext Dublin and its American Depository Receipts are listed on the US Nasdaq. In 2012 it downgraded its London listing from a premium listing to a standard listing.
‘The board of Ryanair is now considering the merits of retaining the standard listing on the LSE,’ the airline said in a statement on the release of its financial results for the six months to the end of September.
‘The migration away from the LSE is consistent with a general trend for trading in shares of EU corporates post Brexit.’
Ryanair revealed 39.1 million passengers were flown during the period, compared with just 17.1 million previously, with losses narrowing from £347million to £40.6million.
The airline said it had benefited from increases in both customers and revenue, which was up 83 per cent, as the travel industry rebounded from the pandemic.
Chief executive Michael O’Leary said: ‘While sectors and traffic more than doubled, operating costs increased by just 63 per cent to €2.2billion, driven primarily by lower variable costs such as aircraft, airport and handling, route charges and fuel.
‘Lower costs, coupled with rising load factors, led to a marked reduction in cost per passenger (ex-fuel) to €38.
‘We expect to see further improvements in costs as our new, lower-cost, more fuel-efficient aircraft deliver and EU countries (such as Ireland, Spain and Italy) roll out Covid recovery incentive schemes.’
O’Leary added that the airline has seen a surge in bookings for the mid-term and Christmas breaks, with the levels expected to remain high into next year.
But he warned that next year will remain challenging due to high fuel costs and ‘will be crucially dependent on the continued rollout of vaccines and no adverse Covid-19 developments’.
Ryanair shares are trading €0.45 higher this morning to €17.19, bringing year-to-date performance to 11.9 per cent.
Last week Ryanair pledged to refund customers within five working days via their original payment method for cancelled flights in a renewed customer service push.
In June, Britain’s competition authority, the Competition and Markets Authority, launched enforcement action against Ryanair and British Airways over a failure to offer refunds rather than rebooking to passengers who were barred from taking flights under lockdown rules. It withdrew the action last month.
Another point of contention raised by the airline on Monday was the ‘delusionary’ double-digit price hike from Boeing on orders for the 737 MAX 10 aircraft.
In September Ryanair abruptly ended talks with the US planemaker over an order of 737 MAX 10 jets, worth tens of billions of dollars because of differences over price.
O’Leary said Boeing’s approach was ‘delusionary’ and described the decision as ‘out of the blue’.
He added: ‘I don’t understand the strategy.
‘Ryanair I think was very close, in active negotiations for a follow-on order for MAX 10 but Boeing walked away from the discussions because they are looking for a price increase at a time when prices should be falling so Boeing can recover its production.’