Ryanair seeks €1.2bn in Eurobonds, looks to retire A320s

Ryanair Holdings has issued five-year Eurobonds seeking to raise EUR1.2 billion euros (USD1.45 billion) as it gears up for the uptick in demand during the summer 2021 season. The Irish low-cost carrier said the bond would be listed on the Irish Stock Exchange and would offer a fixed coupon rate of 0.875%. Ryanair Holdings posted a EUR815 million (USD992 million) net loss for the fiscal year ended on March 31, 2021, but is hopeful that an ongoing vaccination campaign around Europe will result in a relatively quick rebound in demand during the next few months. “[The vaccination rate] allows for removal of many of the travel restrictions into the July, August, September peak travel period. And we expect to see our traffic recover strongly into that period… April-June quarter traffic will, however, be still heavily curtailed. But we’re hopeful that the September quarter will see a significant recovery of traffic, and that we’ll be able to build on that into the third and fourth quarter of the current year,” Chief Executive Michael O’Leary said during the quarterly earnings call. Despite the expected recovery, Ryanair foresees a small loss or breakeven result at best during the current financial year. Besides its strong liquidity and fresh capital, the airline sees its fleet plans as a strong asset for the recovery period. Ryanair has 210 B737-8-200s on firm order from Boeing with deliveries due to begin shortly. O’Leary stressed that the type would lower Ryanair’s costs and give it a competitive edge in a tight market. At the same time, the group is looking to consolidate its fleet around Boeing aircraft. Although in the past O’Leary saw Lauda (now Lauda Europe) with its fleet of Airbus narrowbodies as beneficial to the group in that it gave it leverage with both Airbus and Boeing in procurement discussions, Ryanair Holdings now no longer sees any future for A320s in its fleet. “We start returning the first A320s from the winter of 2022. Over a three- to four-year period, that fleet will wind down,” Chief Financial Officer Neil Sorahan said. Lauda Europe currently operates twenty-nine A320-200s. All other group units – Ryanair, Ryanair UK, Buzz, and Malta Air – operate B737-800s only and soon B737-8-200s. Sorahan confirmed that the airline was still negotiating a potential order for B737-10s, although deliveries of the type would not begin earlier than in 2026.