Ireland-based Ryanair has received £600m from the UK governments Covid Corporate Financing Facility (CCFF). The last few months have seen the airline and its CEO Michael O’Leary throw criticism to other companies receiving state aid.
Set up in March, the CCFF supplies funding to businesses that make a material contribution to the UK economy. Ryanair qualify as while their parent company is based in Ireland, they also provide significant employment and generate a considerable amount of revenue in the UK.
Ryanair announced yesterday they had posted a profit of just over €1bn for the financial year and also revealed they had cash reserves of around €4bn.
The company have taken steps to reduce its cash burn having gone from burning around €200m per week in March to about €60m per week currently. With flights due to ramp up in July, this cash boost from the UK government will help to support the business going forward and preserve its liquidity, especially as it battles against other airlines likely to offer reduced rates on flights.
Previously, Michael O’Leary accused the Lufthansa group of “going around hoovering up state aid like the drunken uncle at the end of a wedding”, highlighting his disdain for government support.
Ryanair may be taking out the loan to prepare to compete with what they expect will be “significant” discounting from airlines with “State Aid war chests.” One thing is for sure, when air travel does start resuming it will be a competitive landscape.
The Best Care Packages to Send During COVID-19
Lufthansa Group to Operate 1,800 Weekly Flights by July
How to Send A Care Package During COVID-19
Ryanair say they expect passenger numbers to halve in the current financial year to below 80 million. The airline originally targeted 154 million passengers to fly with them for this year.