Ryanair Expects To Cut 3,000 Jobs In Response To Current Crisis

Ryanair has today announced that up to 3,000 jobs will have to be cut as part of its restructuring program in the aftermath of the coronavirus crisis. The program will also result in pay cuts for staff and the closure of some of its European aircraft bases until air traffic recovers.

Ryanair, Ghost Flights, Empty Flights
Ryanair is facing up to 3,000 job losses. Photo: Getty Images

Ryanair job losses and pay cuts

Ryanair Holdings PLC issued a COVID-19 market update today with expectations that it will take at least two years for passenger demand to recover. The restructuring necessary to cope with the huge drop in flights will result in up to 3,000 job losses, mainly among pilots and cabin crew. Salaries will be cut by up to 20%, and some staff will have to take unpaid leave.

Head office and administrative staff will also be affected by the job and pay cuts. Ryanair CEO Michael O’Leary, who had already taken a 50% pay cut himself for April and May, has now agreed to have this pay cut extended until the end of the financial year in March 2021. A number of Ryanair’s aircraft bases will be closed until passenger numbers recover.

Ryanair planes lined up
It could take two years for passenger numbers to recover. Photo: Ryanair

Projected travel outlook makes grim reading

Ryanair is projecting a 99% reduction in its flying schedules for April, May and June this year. It had budgeted for 42.4 million passengers in the first quarter of 2020, but the actual figures are 99.5% behind that with fewer than 150,000 passengers. Some flight services are expected to be resumed in July to September but with 50% fewer passengers than its second-quarter target of 44.6 million.

Passenger volumes are expected to take some time to recover as public health restrictions impact consumer confidence. Temperature checks at airports for cabin crew and passengers along with the wearing of face masks could deter many people from traveling.

Ryanair Boeing 737 MAX
It’s a long road to recovery. Photo: Ryanair

Cuts in aircraft deliveries

Ryanair has had to review its planned growth and orders for aircraft. The airline says that it is actively negotiating with Boeing and the lessors of Laudamotion’s A320s to reduce the planned deliveries of aircraft for the next two years. The update says that this would, “… more accurately reflect a slower and more distorted EU air travel market in a post-COVID-19 world.”

Ryanair asks for a level playing field

As well as coping with the COVID-19 pandemic, Ryanair claims that “state aid doping for flag carriers” is distorting the competitive landscape. With the backing of state aid and, in some cases, nationalization, flag carriers will be able to offer significant discounts on pricing and below cost fares.

More than €30 billion in state aid for “national” airlines from EU governments, along with payroll support, for carriers such as Lufthansa, Alitalia and Air France-KLM will distort the level playing field in Europe. Ryanair states that it will “challenge these unlawful bailouts in the EU courts to protect fair competition in Europe’s aviation market.”

Ryanair’s financial outlook

The Ryanair Group expects losses of more than €100 million for the first quarter of 2020. The decline in traffic in the second quarter will mean further losses, not helped by the “state aid doping” for the flag carriers.