Ryanair has today announced that it is planning to cut 3,000 jobs due to the collapse in the air travel industry caused by the coronavirus crisis, and subsequent lockdown.
The budget airline’s CEO Michael O’Leary also hit out at the state bailouts for competitors, such as KLM, Lufthansa and Air France – something Ryanair has yet to receive. According to Ryanair, almost €31bn in government aid has been either granted or been requested across Europe from the airlines competitors
A statement from the company read: “Ryanair entered this unprecedented Covid-19 crisis with almost €4bn in cash, and we continue to actively manage these cash resources to ensure that we can survive this Covid-19 pandemic, and more importantly the return to lower fare flight schedules as soon as possible, when our customers can look forward to more low air fares as we are forced to compete with flag carrier airlines who have received €30bn in State Aid “doping” to allow them to sustain below cost selling for months after this Covid19 crisis has passed, as it certainly will over the coming months.”
As a direct result of the unprecedented Covid-19 crisis, the grounding of all flights from mid-March until at least July, and the apparent distorted State Aid landscape in Europe, Ryanair now expects the recovery of passenger demand and pricing (to 2019 levels) will take at least two years, until summer 2022 at the earliest.
Ryanair Airlines will shortly notify their trade unions about its restructuring and job loss program, which will commence from July 2020. These plans will be subject to consultation but will affect all Ryanair Airlines, and may result in the loss of up to 3,000 mainly pilot and cabin crew jobs, unpaid leave, and pay cuts of up to 20%, and the closure of a number of aircraft bases across Europe until traffic recovers.
Group CEO Michael O’Leary, whose pay was cut by 50% for April and May, has now agreed to extend this 50% pay cut for the remainder of the financial year to March 2021.
Rupert Morrison, economist and CEO of analytics firm orgvue
There is no ‘one-size-fits-all’ recovery. Rather than buy into big, vote-winning, generalisations about every business recovering, in a linear fashion, from the impact of COVID-19, management teams should be determining their own specific path.
Add in the ever-present threat of a secondary wave of infections and it becomes clear that the only way organisations can truly recover is by forgetting about ‘business as normal’ and changing the way they approach modelling and planning. Only by identifying as many scenarios as possible and modelling different strategies to tackle each scenario effectively, can businesses truly recover.
Pursuing a return to the way things were is futile and damaging. Instead, smart business leaders will be instilling a new era of management involving continuous analysis, modelling, planning and execution, the rewards of which will be agility, confidence and, yes, recovery.