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LAST UPDATE | 1 May 2020
RYANAIR HAS SAID that 3,000 jobs could be cut as the airline responds to the financial impact of the Covid-19 pandemic.
In a statement this morning, the company said that it will shortly notify “trade unions about its restructuring and job loss program, which will commence from July 2020″.
Job losses are expected to impact mainly pilots and cabin crew with chief executive Michael O’Leary saying about 15% of the company’s workforce could be lost.
The Fórsa trade union, which represents Ryanair cabin crew and pilots, said it “received a short communication from the airline” following the announcement.
“Fórsa will be seeking an early engagement with the airline, and will make no public comment until management has formally outlined a detailed position to the union,” it said.
Ryanair is also planning pay cuts of up to 20% for staff and the close of several bases across Europe until airline traffic recovers.
The company said that pay cuts and job cuts will include senior management staff and O’Leary has agreed to a 50% pay cut until March 2021.
The airline industry has been badly hit by the pandemic following the major drop in demand for flying.
It remains unclear when demand will return, but Ryanair said that it was expecting some return to flying by September. However, the company said that it expects traffic in the July to September period will be “no more than 50% of its original traffic”.
The vast majority of Ryanair’s fleet is grounded. In April, it was flying less than 20 daily flights, compared to its usual 2,500.
It operated 33,000 scheduled flights in March, carrying 5.7 million passengers, though 64,000 flights had been budgeted.
The company expects passenger demand for flying to take at least two years to recover.
Speaking on Sky News this morning, O’Leary said: “we’ve never faced a period like this in the airline industry”.
We expect in the first quarter of this year, which is our April, May, June period, we’re going to lose about €100 million. We’ve never lost money in that first quarter in our history in Ryanair, and it shows just how difficult it is. So we regret these job cuts, we regret these pay cuts but they are what the well-run airlines like Ryanair and others will have to do just to survive and compete against the likes of Lufthansa and Air France receiving tens of billions in state aid from their national governments.
On Wednesday, German airline giant Lufthansa that Switzerland had agreed to offer state-backed loans of around €1.2 billion to the company’s subsidiaries Swiss and Edelweiss, as the group struggles to stay solvent amid the coronavirus pandemic.
The group, which also includes Brussels and Austrian Airlines, said it was in “intensive negotiations” with the governments of various countries to “secure solvency”.
Austrian Airlines have asked Vienna for €767 million worth of aid, while Lufthansa itself is attempting to negotiate around €9-10 billion from the German government, according to local media reports.
France is also set to be readying a €7 billion package for national carrier Air France with the country’s finance minister describing the plan as “historic support”.
O’Leary has said the state support for these airlines is “manifestly unfair” but said it would take Ryanair 12-18 months to challenge the decision in EU courts.
Asked about the suggestion of flying planes with the middle seat empty, O’Leary said it would do nothing to help social distancing.
Firstly, remember taking out the middle seat in an aircraft achieves no social distancing, you’re less than two feet away, there’s less than two feet between the island the window seat, there’s even less than two feet between the seats behind you on the aisle and the seas in front of you on the aisle. Social distancing on an airline or an airline in an aluminium tube to simply isn’t possible.
“What we are recommending, and I think what the industry is moving towards is passengers and our cabin crew wearing face masks at all time on board, temperature checks on passengers at the airport so that anybody who has a temperature above 30 degrees will simply be asked to go home and self-isolate,” he added.
Yesterday, Taoiseach Leo Varadkar said that he wants to see Ryanair and Aer Lingus back up and running in August.
The government has co-signed a letter with a number of EU countries asking for the European Commission to change the rules on how airline passengers can be refunded for cancelled flights and calling for the commission to temporarily allow airlines to issue vouchers instead of refunds to passengers whose flights have been cancelled due to the Covid-19 pandemic.
- With reporting by Rónán Duffy and © – AFP 2020
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Under the guise of keeping jobs and ensuring passengers will be able to travel in the future, private companies are trampling all over consumers rights. We all know that it’s extremely important to save jobs and to keep a business afloat that will save Irish citizens money in the long run. But the cost of this is worrying, a letter has been sent requesting that paying passengers money can be turned into a bailout fund for private business if needed. It’s that simple, if a private airline can’t fly, you won’t be able to get your money back. You get a voucher instead. They want to turn your money into an insurance premium. That you pay, not them. For Ryanair that gave 8 billion in the last few years to shareholders, it’s nothing short of scandalous that they don’t pay for there own insurance
@devils avacado: I’m sure the employees who have and will lose thousands in pay would happily take a voucher/credit at 110% which can be used to claim it back in the future.
@Zippy: I agree, and I am owed money for a family holiday that I’m happy to let them have as my family will use the voucher in the future. But I’m also aware that not everyone has a two income household like I do and can afford to take the hit of having an airline hang on to their money. Imagine if you were to do online shopping for groceries from let’s say Dunnes,, you placed your order and payed the bill only for the company to keep the money and not deliver your shopping. You get an e-mail saying the company is in hard times and they are keeping your money but you can have a voucher to use when they get back up and running. Do you think that would be seen as acceptable by the government?? So why are they asking the EU to make it acceptable for private airlines??
@devils avacado: you can bet that flight prices will also be inflated for 12 months as vouchers are being used, meaning you will have to add in some more of your money. You’re not getting an equivalent product in this scenario. SCC seems to be the most successful route for now, but this will likely be closed off too.
@devils avacado:
You’re completely right.. Unlike many of their competitors, AIG/Ryanair so far seem to have the capital to absorb this grounding. I think Ryanair would manage it with or without this voucher scheme but AIG, I’m not so sure.
EU are so quick to jump at things when it suits them, yet they are allowing airlines to behave like this, it’s not just legally wrong, it’s ethically wrong. If people can and want to, they can take vouchers but there are many people who need the money. Or, they have decided not to travel outside their homeland this year. Why should people be forced to subsidise a service that they don’t plan to use?
@Wreck Tangle: AIG?, what do insurance company have to do with any of this?
@James Padden:
He means IAG!
@devils avacado: no it’s not scandalous. Most airlines work off a 2% profit margin and they do factor in all sorts of anomalies but no one could have forecasted a 99% drop in business while trying to pay for a fleet of 300 aircraft including all associated running costs of a major international company. In fairness I don’t think Ryanair want to lay-off staff but I can’t blame them for wanting to hold on to badly needed cash in return for some kind of workaround. I’d be doing the same.
@devils avacado: whatever about the wrongs or rights about vouchers. The arguments about people can’t afford to loose this money is moot, they have already spent it so could afford it at the time, actually not going on flight/ holiday will mean you spend less than you would have
@devils avacado: you also need to factor in that an airline could potentially go bust. So you are investing your cash in the business with risk but no return.
For hotels in particular I would not leave any cash tied up with them. Airlines are less of a risk, but in both scenarios. Cash investment with risk and 0 return
@johnny onion eye: Not really like, many many people live pay cheque to pay cheque and have to take out small loans to go on travels, be they summer holidays or essential travel for bereavement, medical treatment etc. Whether they should or not is besides the point, according to BoI and other banks, holidays and travel are perfectly valid reasons to take out small loans. These loans will still have to be paid back with nothing to show for it.
Ryanair has €4BN in reserves,and still wants to keep customers money from cancelled flights and Leo varadkar is helping them to get EU law change, but we’re all in together Leo.
@@mdmak33: next time you book a Ryanair flight because it’s the cheapest or perhaps their schedule or airport the fly into suits your needs think of the idiot comment your making
@@mdmak33:
Well if Ryanair is going to let go 3,000 staff due to anticipated prolonged mkt demand contraction post covid19, it’ll need cash to pay redundancy, related amounts due.
CEO is just cutting his cloth by his measure & would never take state aid to prop things up just for sake of it, as was suggested by a UK union boss today on announcement.
MOL knows it’ll take years for Air Travel to return to pre covid19 numbers, so it’s bite-the bullet-time to preserve Ryanair model. He probably has eye set on a few planes going for a song, a cash job, so that his company can continue to offer remarkable value to the flying public around EU. Punters’ vouchers are as safe as cash in bank, but they should get an offer of a cheap seat as a sweetener.
Remember his bargain hunting after 9/11?
Here we go with the cuts…hopefully we can get back to normal soon
While it won’t save that much cost in the grand scheme of things, maybe its a good excuse for aer lingus to abandon the whole terrible rebranding idea and change of livery!
@ThatLJD: ffs the liverly is the least – i would say completely insignificant issue facing any airline – high infection rates around the world and closed economies – jaysus they couldnt give a shite about the logo on the bleedin planes
@Dave Hammond: I get ya brother, I was merely saying it would be a good excuse to abandon it, it’s terrible.
@ThatLJD:
Honestly, the new livery has grown on me. But now we’re going to have a situation whereby they’ll be flying two liveries for several years.
@Sequoia: ladt thing I’d have expected of you Sequoia, you’re old, you’re meant to dislike change! Well if you can embrace it then maybe I too can embrace waiting for that now white, once green, plane to roll in!
“Labour Party TD Duncan Smith said that the government needs to intervene to project jobs.
The government needs to extend the temporary wage subsidy scheme for industries that are going to be key for getting us back on track such as Aer Lingus. It is clear that the government need to take urgent action to address the potential torrent of job losses that could occur at Dublin Airport between Aer Lingus and Ryanair.”
Where’s the business case deputy? What jobs are you protecting? This is an industry that not only cannot carry out operations today but also expects no demand in the coming months? Perhaps its better value for the taxpayer to lay them off and let them get ready to find a new job.
@Wreck Tangle: As a Swords-based TD, I don’t think Duncan cares about a business case!
@Wreck Tangle: probably the same business case that has seen USA- $25bn support for United, Delta and American. France- €7bn for Air France. Netherlands-€4bn for KLM. Germany-€10bn for Lufthansa. Italy, Austria, Norway similar.
@Zippy: unions are keeping Duncan’s party’s balance sheet in the black and he is based in Swords so it’s not surprising to see him pipe up about some of his constituents. The WSS will work here if employees accept that they will only be paid the subsidy and not that plus normal pay. The unions at Aer Lingus will definitely not accept that for all staff so redundancies are the only alternative.
What this pandemic is showing is that we should stop flying, stop eating meat and never end up in a care home
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