Airline cutting back
Ryanair to cut 3,000 jobs and blasts state aid ‘doping’
Ryanair will seek better terms on new jets
Budget airline Ryanair is expected to axe 3,000 jobs and said European fares will be distorted by its having to compete against ‘legacy’ airlines receiving €30 billion “in clear breach of EU competition and state aid rules”.
Referring to state aid as “doping, it said: “This unlawful and discriminatory state aid will be challenged by Ryanair in the European Courts.”
Ryanair expects to operate less than 1% of its scheduled flying programme in Apr, May & June 2020. Q1 traffic of less than 150,000 passengers will be 99.5% behind the Q1 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 Q2. For the full year ended March 2021, Ryanair now expects to carry less than 100m passengers, more than 35% below its original 154m target.
When scheduled flights return in Europe, sometime in July, Ryanair believes it will take some time for passenger volumes to return. 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.
Ryanair expects traffic on reduced flight schedules will be stimulated by significant price discounting, and below cost selling from flag carriers with huge State Aid war chests (or nationalisation in the case of Alitalia).
“These lower fares will require aggressive airport price incentives to encourage passengers to travel, and Ryanair continues to call on EU governments to cut passenger taxes, airport taxes, and departure taxes on an industry wide basis as a better alternative to selective State Aid “doping” for flag carriers.”
Ryanair has an order with Boeing for 210 737 MAX jets and is expected to use the decline in passenger numbers as a means to negotiate better terms.