Ryanair (RYA.IR) said it needs to continue to discount fares in the coming months amid a “hugely uncertain outlook” as it reported losses of €96m (£80m, $107m) in the last three months of 2021.
The Irish budget-airline missed its targets in December after the spread of Omicron forced governments to reimpose restrictions on international travel.
“The sudden emergence of the Omicron variant and the media hysteria it generated in December, forced many European governments to reimpose travel restrictions in the run-up to Christmas, which significantly weakened peak Christmas and New Year bookings and fares,” the airline said.
Despite the holidays, just 9.5 million passengers travelled with Ryanair in December. The goal was to reach 11 million.
Chief executive Michael O'Leary said that while there had been a "very strong bounce back" in bookings in recent weeks as concerns about the Omicron variant began to fade, the outlook remained hugely uncertain.
Ryanair added that the first three months of 2022 will require “significant price stimulation at lower prices” to attract customers, which could hit profits.
"While recent bookings have improved, following the easing of travel restrictions, the booking curve remains very late and close-in, so Q4 traffic requires significant price stimulation at lower prices," O'Leary said.
As COVID restrictions begin to ease across Europe, Ryanair expects a summer bookings boom, with a schedule for 2022 that is 114% of 2019, the last year unaffected by the pandemic.
It also plans to grow to 225 million passengers a year by 2026, an increase from the previous prediction of 200 million, compared with a pre-COVID-19 peak of 149 million.
Ryanair reaffirmed its expectations that it would fly just under 100 million passengers this financial year, which ends on March 31. It also reiterated its forecast loss for the full financial year at between €250m and €450m.
The airline’s loss of €96m for the third quarter to the end of December is narrower than the €321m loss it suffered a year earlier.
Customer numbers, at 31.1 million, were more than three times higher, and revenues of £1.47bn were 331% up on 2020 levels.