Ryanair won't need to raise more debt this year – O’Leary

The airline, which released third-quarter results yesterday, has already raised more than €1.2bn in debt and equity since the pandemic started in order to shore up its balance sheet. It had about €3.5bn of cash at the end of December and is burning through between €50m and €60m gross every week.

In September, it sold an €850m bond – its first in three years – in a transaction that was heavily oversubscribed. Earlier that month, it raised €400m in equity via a share placement.

“We’re still reasonably comfortable with our cash position,” Mr O’Leary told analysts. “We expect to repay the UK government loan of €600m in March. We have a bond repayment in June. We’d expect to comfortably repay that from the current cash position.”

He said he’d be comfortable seeing Ryanair’s cash position declining to between €1.5bn and €2bn.

“I wouldn’t want to see it going down below €1bn,” he added. “But we have numerous sources of additional financing out there open to us at the moment if we wanted to tap them. We have a huge, unencumbered fleet.”

“We are inundated with offers of people wanting to lend us money both on a secured and unsecured basis,” said Mr O’Leary.

He said Ryanair has modelled worse case scenarios for the year and remains upbeat.

“There’s nothing out there we can see at the moment that will require us to raise additional debt this year,” said the chief executive. “But if we need to, we can, and we’re confident we can and we will.”

Ryanair made a €306m loss in the third quarter of its financial year, compared to a profit of €88m in the third quarter of the previous year.

It’s on track to lose as much as €1bn for the full financial year.

It carried 8.1 million passengers in the third quarter, compared to 35.9 million in the previous third quarter.

Davy Stockbrokers analyst Stephen Furlong said Ryanair’s balance sheet remains one of the strongest in the industry.

“Ryanair is well placed to take up traffic recovery opportunities that arise throughout summer 2021 and beyond,” he said, adding that an expectation that reduced capacity across Europe for the next few years will provide a growth window for the airline.