Ryanair, easyJet, Wizz Air: Europe’s LCCs eye recovery after tough 4Q

Ryanair, easyJet and Wizz Air’s results for calendar 4Q2020 were not pleasant. The three LCCs have performed better than Europe’s leading legacy airline groups in the COVID-19 pandemic, so their results provide an upper boundary for the likely performance of the legacies when they report.

Revenue decline for the three LCCs accelerated from 3Q2020, with easyJet suffering the heaviest drop. All of them improved ancillary revenue as a share of the total in 4Q2020, but easyJet is the weakest of the three in this area.

All three are operating minimal capacity while travel restrictions remain tight across Europe, focusing only on cash-generative operations. However, all expect market share gains when demand recovers.

The recovery should present all three with opportunities, although Ryanair and Wizz Air’s more aggressive growth plans and lower unit costs may give them an advantage over easyJet.

EasyJet CEO Johan Lundgren will be interviewed on CAPA Live on 10-Feb-2020, and can be expected to be a strong advocate of his airline’s strategic position.

Summary:

• In calendar 4Q2020, passenger numbers were down by 87% for easyJet and by 77% for Ryanair and Wizz Air. Load factor fell by more than 25ppts for all.
• Revenue decline accelerated from 3Q2020; easyJet revenue fell most heavily. All made progress with ancillary revenue in 4Q2020, but easyJet is weakest.
• Aggregate operating losses were higher than combined revenues in the quarter, but all three have healthy liquidity.