By Scott Wright

RYANAIR chief Michael O’Leary has angrily refuted claims customers have still to receive refunds from flights cancelled in the early months of the Covid-19 pandemic, as the airline declared conditions in the current year continue to be “hugely challenging”.

Mr O’Leary made a stout defence of the airline’s refund policy live on radio after facing claims that customers are still waiting to be reimbursed for flights grounded between March and July as governments restricted air travel to halt the spread of coronavirus.

It came as Ryanair slid to a first-half loss of €197 million, compared with a profit of €1.15 billion at the same stage last year.

Ryanair, Europe’s biggest airline, was forced to ground 99 per cent of its fleet from the middle of March to the end of June. That resulted in first-half passenger numbers dropping from 86 million to 17 million, with revenue plunging by 78% to €1.18bn.

The airline now expects to carry around 38 million passengers this year, with around 40% of its usual capacity operating throughout November and December. However, it warned this guidance could be revised downwards if “EU governments continue to mismanage air travel and impose more uncoordinated travel restrictions or lock downs this winter”.

The airline carried 149 million passengers in 2019.

Asked to respond to claims from listeners to BBC Radio 5 Live that they are continuing to wait on refunds, Mr O’Leary said all customers who booked flights for March, April, May, June, July and August have been refunded on request. He said: “We have now refunded, between refunds and vouchers, £1.5bn in cash in the last six months. We have no customers outstanding who have requested a refund who haven’t received it.”

He added: “We have no backlog in our refunds department at all – that’s a fact.”

Mr O’Leary had earlier said during the interview that the lockdown strategy had “failed”, and voiced his support for “much more widespread testing and tracing”.

“You can’t keep bouncing economies in and out of lockdown,” Mr O’Leary said. “We need to learn to live with this virus until there is a vaccine that’s available.”

Last month, Ryanair took the decision to scrap more than one in three of its winter flights amid lower demand and the imposition of coronavirus travel restrictions across Europe, leading it to cut its guidance on full-year traffic to around 38 million travellers. It noted yesterday that this took the group’s winter (November to March) capacity down from the previously guided 60% to 40% , “at most”, of last year’s traffic.

Despite the continuing challenges, Ryanair was upbeat over its longer term prospects, declaring its balance sheet was “one of the strongest in the industry with a BBB credit rating (S&P and Fitch) and over €4.5bn cash at 30 September”. It said it has cut costs by taking part in payroll support schemes introduced by EU Governments, cancelling share buybacks and deferring non-essential capital expenditure. In September it raised €400m by issuing new shares.

Ryanair said: “As we look beyond the Covid-19 crisis, and the emergence of effective vaccines in early 2021, the Ryanair Group expects to have a lower cost base, a stronger balance sheet, which will enable it to fund lower fares, and add new lower cost aircraft to capitalise on the many growth opportunities that will be available in all markets across Europe, especially where competitor airlines have substantially cut capacity or failed.”

The airline warned, however, that the “risk of a no-deal Brexit remains high”.

Ryanair said: “We hope, before the end of the transition period in December, that the UK and Europe will agree a trade deal to cover air travel which will allow the free movement of people and the deregulated airline market between the UK and Europe to continue.

“As an EU airline group, Ryanair should be less affected by a no-deal Brexit than our UK registered competitors. However, we still expect Brexit to cause adverse trading consequences.”

Shares closed up 3.8% at €12.44.