Another thunderclap in the European sky. The low-cost airline Ryanair will cut 3,000 jobs in order to be able to "survive" the air transport crisis which endangers the entire sector. The Irish carrier explains that pilots and aircrew will mainly be concerned, and that the plan covers 15% of the total workforce of around 19,000 people.
The job cuts are "the minimum we need to survive the next 12 months," company boss Michael O'Leary said on the BBC. If a vaccine is not found and the traffic does not return to normal, "we may have to announce more suppressions in the future," he warned.
O'Leary also believed that his restructuring plan could lead to base closings in the UK. Like its competitors in Europe, Ryanair is struck by the paralysis of air transport in the midst of a pandemic, which deprives airlines of revenues even when their fixed costs remain enormous.
British Airways had announced this week the loss of 12,000 jobs, more than a quarter of its workforce. EasyJet has strengthened its finances with a loan of £ 600 million from the public authorities. And the Virgin Atlantic company is fighting for its survival, its founder Richard Branson asking for the help of the government for the moment in vain, so that he started looking for investors.
Unpaid leave, salary reductions
Ryanair specifies that its flights will be stopped until at least July and that it will take two years, the summer of 2022, for a return to normal. The company also plans that employees will take leave without pay and that others will see their wages reduced by 20%.
Michael O'Leary had already cut his salary by 50% for April and May, and will now extend this measure for the rest of the annual financial year, ie until March 2021. Ryanair is also forced to review its growth plans and aircraft orders. He says he is in negotiations with Boeing to reduce the number of deliveries planned for the next 24 months, which would allow him to make considerable savings.
Ryanair will operate only 1% of its flights in April, May and June, or 150,000 passengers over the period, compared to 42.4 million expected without the pandemic. For the summer, the company plans to carry only half of the 44.6 million passengers planned. And this will represent a total of less than 100 million over its 2020-2021 fiscal year, far from the 154 million expected. Ryanair has also drawn the wrath of the consumer association Which! and many customers who are seeking reimbursement for their flights.
Ryanair only offers them a voucher and does not guarantee a cash payment until after 12 months.
Empty seats?
The recovery promises to be very gradual and if EasyJet raised the possibility of leaving the middle seats empty at the start, Mr. O'Leary strongly opposed this option. In financial terms, Ryanair expects a net loss of 100 million euros for the first quarter (April to June) and should be further in the red in the second quarter.
The group explains having entered this crisis with a cash flow of 4 billion euros and says to do everything to preserve its finances, denouncing in passing the aid provided by governments to many of its competitors in Europe. Ryanair, who will not ask for government support, believes that this aid will distort competition for several years and will challenge it before the European courts.
Apart from airlines, airports are also struggling, like Heathrow in West London. The UK's largest airport, one of the main hubs for global air transport, expects passenger traffic to fall 97% in April.
Economy
Ryanair plans to take state aid airlines to court
- Coronavirus
- Ryanair
- Airline company
- World
- Society