Ryanair has provided a market update on traffic projections amid the ongoing coronavirus pandemic, and has warned that it may have to cut up to 3,000 jobs.
The low-cost carrier is currently operating a skeleton service, with 99 per cent of its fleet grounded, and the airline said that it expects to operate less than 1 per cent of its scheduled flying programme in April, May and June.
Further ahead the Irish carrier said that “while some return to flights is expected”, it forecasts that it will carry no more than 50 per cent of its original traffic target between July and September this year.
For the full year to March 2021 Ryanair is now forecasted to carry less than 100 million passengers, over 35 per cent below the previously targeted 154 million.
As a result the carrier said it was “are in active negotiations with both Boeing, and Laudamotion’s A320 lessors to cut the number of planned aircraft deliveries over the next 24 months”.
Ryanair said it now expects that it will take until summer 2022 “at the very earliest” for passenger demand and pricing to return to 2019 levels, and warned that it may have to cut up to 3,000 jobs, mainly in the pilot and cabin crew sectors.
Staff will also be subject to pay cuts of up to 20 per cent, and the airline confirmed that group CEO Michael O’Leary has extended a current 50 per cent cut to his pay for the remainder of the financial year.
Ryanair said that when scheduled flights do return to Europe “Consumer confidence will be impacted by public health restrictions, such as temperature checks at airports and face coverings for passengers and staff on board aircraft”, but added that traffic will be stimulated by “significant price discounting”.
However the airline warned that “the competitive landscape in Europe will be distorted by unprecedented volumes of State Aid from some EU Governments to their “national” airlines”, which it says currently amounts to over €30 billion.
Ryanair said that it would challenge this state aid “doping”, which it said was in breach of EU rules and which would “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,” it said.
The carrier gave the example of France, where it said that “the State is refunding aviation taxes but only to ‘French’ airlines where all other EU airlines flying in France (such as Ryanair, EasyJet and BA) must still pay these taxes”.
The Ryanair Group expects to report a net loss of over €100 million for the first quarter, with further losses in the second quarter.
In response to the news of possible job losses at Ryanair, Brian Strutton, general secretary of the British Airline Pilots Association, said:
“There has been no warning or consultation by Ryanair about the 3,000 potential job losses and this is miserable news for pilots and staff who have taken pay cuts under the Government job retention scheme.
“Ryanair seems to have done a u-turn on its ability to weather the Covid storm.
“Aviation workers are now facing a tsunami of job losses. The UK Government has to stop daydreaming and keep to the promise made by the Chancellor on March 17 to help airlines or this industry, vital to the UK economy, will be devastated.”