The airline industry has been badly hit by the COVID-19 pandemic, with the majority of airlines cutting flights by around 90% compared to the same period in 2019. Ryanair (NASDAQ:RYAAY) itself currently operates less than 20 daily flights, which represents a 99% decline from its pre-COVID-19 flight schedule of 2,500 daily flights. This has had an unprecedented effect on Q1 2020 profit figures, with heavy losses expected across the sector. However, Ryanair has several features that distinguish its current position from other airlines - which will also help it to make a recovery after COVID-19.
Balance Sheet
A significant advantage that Ryanair has over its competitors is the strength of its balance sheet. As of the 3rd April, Ryanair had cash and cash equivalents of €3.8bn which provides a significant buffer to absorb costs throughout the period that it is unable to generate revenue. This compares rather favorably to the Cash & Cash Equivalents position at other airlines: such as EasyJet with £1.6bn (Sept 2019), Virgin Atlantic with £392m (Dec 2018) and IAG €7bn (April 2020). Note that despite IAG's larger cash balance - this has to support British Airways, Iberia and the smaller Aer Lingus, Level and Vueling brands. However, the cash position only tells some of the story, as the extent to which cash outflow is managed also plays a vital part in estimating the likelihood of survival of an airline.
Unlike most of its competitors, Ryanair owns 77% of its aircraft fleet, which significantly reduces the cash outflow compared to if they were leased under operating leases. Operating leases are extremely unlikely to be cancelled/deferred as a result of the pandemic, and therefore airlines that finance their aircraft with operating leases are going to be suffering a severe cash drain each month their planes are unable to fly. When this is compared to
