Budget carrier announces plans to axe 3,000 jobs
Budget airline Ryanair has announced plans to axe 3,000 jobs due to the grounding of fleets following the coronavirus outbreak.
The low-cost carrier operates 80 routes out of its bases at Manchester Airport (46 routes) and Liverpool John Lennon Airport (34).
Ryanair said will notify its trade unions about its restructuring and job loss programme, which will start from July.
It said most job cuts will impact its pilot and cabin crew staff.
The restructuring programme will also include unpaid leave, pay cuts of up to 20% and the closure of a number of aircraft bases across Europe, until traffic recovers.
Job cuts and pay cuts will also be extended to head office and back office teams.
Group CEO Michael O’Leary, whose pay was cut by 50% for April and May, has now agreed to extend this 50% pay cut for the remainder of the financial year to March 2021.
Ryanair employs 9,095 cabin crew and 5,446 pilots.
Administrative jobs make up 992 of the payroll, while there are 704 in ground operations, 426 in maintenance, and 177 management.
The airline is also reviewing its growth plans, and aircraft orders and is in active negotiations with both Boeing, and subsidiary Laudamotion’s A320 lessors to cut the number of planned aircraft deliveries over the next 24 months, which could reduce the group’s capex commitments, to more accurately reflect a slower and more distorted EU air travel market in a post COVID-19 world.
In a trading update this morning the airline painted a grim picture of the state of the industry for the next two years, and hit out at what it called state ‘doping’ of flag carriers given billions of pounds in state aid.
Ryanair expects to operate less than one per cent of its scheduled flying programme in April, May and June.
First quarter traffic of less than 150,000 passengers will be 99.5% behind the first quarter budget of 42.4m passengers.
While some return to flight services is expected in the second (July-Sept) quarter, Ryanair expects to carry no more than 50% of its original traffic target of 44.6m in quarter two.
For the full year ended March 2021, Ryanair now expects to carry less than 100m passengers, more than 35% below its original 154m target.
Today’s statement said: “When Ryanair returns to meaningful flying from July, the competitive landscape in Europe will be distorted by unprecedented volumes of state aid from some EU Governments to their ‘national’ airlines.
“Currently this amounts to over €30bn – in addition to payroll supports – mainly to the Lufthansa Group, Air France-KLM, Alitalia, SAS, and Norwegian.
“All this state aid is in breach of EU rules, and will distort Europe’s level playing field in airline competition for many years.
“Lufthansa, Air France-KLM and Alitalia can now fund many years of below cost selling, whereas Ryanair and other well run airlines will not request (and would not receive) such state aid.
“Ryanair will challenge these unlawful state aid bailouts in the EU Courts to protect fair competition in Europe’s aviation market, which has done so much to lower fares for consumers over the last 20 years.”
The group said it expects to report a net loss of more than €100m in the first quarter, with further losses in quarter two, its peak Summer period, due to the substantial decline in traffic arising from COVID-19 fleet groundings.