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Michael O'Leary says Ryanair 'lost €100 million in quarter' as airline plans for 3,000 job losses

The cuts will be focused on pilot and cabin crew jobs.

Ryanair CEO Michael O'Leary on Sky News this morning.
Ryanair CEO Michael O'Leary on Sky News this morning.
Image: Youtube/Sky News

Updated May 1st 2020, 10:34 AM

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. 

ryanair-environmental-promises Ryanair is predicting major job cuts as a result of the Covid-19 pandemic. Source: Niall Carson/PA Images

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. 

Source: Sky News/YouTube

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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