RYANAIR HAS SAID it is preparing for a “hugely challenging” period to continue as it reported a loss of €197 million in the first half of the year.

The low-cost airline said it “expects to record higher losses” in the second half of the year, despite having a lower cost base and a stronger balance sheet.

Covid-19 saw 99% of the carrier’s fleet grounded for almost four months between mid-March and the end of June.

The company said traffic in the first half of the year fell from 86 million to 17 million passengers compared with the same period last year, around 80%.

Its revenue dropped 78% to €1.18 billion, while the loss in this half year contrasts with a profit after tax of €1.15 billion euros in the first half of last financial year.

With almost no traffic in the first quarter of the year, the “vast majority” of the first half of the year’s revenue was earned in the second quarter, the firm said.

It added: “Given the current Covid-19 uncertainty, Ryanair cannot provide FY21 PAT (profit after tax) guidance at this time.

“The group expects to carry approximately 38 million passengers in FY21, although this guidance could be further revised downwards if EU Govts continue to mismanage air travel and impose more uncoordinated travel restrictions or lock downs this winter.”

It said the pandemic, uncertainties over Brexit, airline pricing, fuel costs, competition from new and existing carriers, actions by governments and the willingness of passengers to travel “could significantly impact” its results for the remainder of the year.

It was critical of what it called a “flood of illegal state aid from EU governments” to carriers including Air France and Lufthansa, which it said would “distort competition and allow failed flag carriers to engage in below-cost selling for many years”.