Thousands of jobs to be cut at Ryanair and Aer Lingus due to Covid-19

Airlines predict passenger demand and pricing will take until 2022 to recover

Thousands of jobs are to be cut at Ryanair and Aer Lingus as both airlines continue to grapple with the grounding of virtually all air traffic due to the Covid-19 pandemic.

Ryanair said it plans to cut 3,000 mainly pilot and cabin-crew jobs, implement pay cuts of up to 20 per cent, and close a number of aircraft bases across Europe due to the crisis. It added that passenger demand and pricing will take at least two years to recover, until summer 2022, “at the earliest”.

While there has been no official announcement from Aer Lingus as yet, it is understood the airline is seeking ways in which to further cut costs due to the effect of the pandemic on its business.

Its sister airline British Airways this week announced plans to sack 1,130 pilots, a quarter of its total.

Talks took place between Aer Lingus management and unions on Friday, and those talks were focused on the airline’s plans to cut up to 20 per cent of its entire workforce. Aer Lingus has a headcount of about 4,500 staff, meaning 900 jobs are at risk.

A statement from Aer Lingus said: “Aer Lingus is continuing to communicate directly with our employees and engage with their representative bodies.”

Fórsa, a union representing airline workers, said Aer Lingus is expected to add more detail at the latter half of next week.

At present, the union is anticipating that the airline will introduce a voluntary redundancy scheme and changes to pay, working time and work practices. No specific proposals have been outlined as of yet.

It is understood that Aer Lingus is forecasting its business in June, July and August to be between 10 and 15 per cent of what had it anticipated prior to the Covid-19 crisis.

Restructuring

At Ryanair, the airline has notified unions about its restructuring and job-loss programme, which will begin in July.

The plans will affect all Ryanair airlines. Ryanair itself currently employs about 17,000 people, of whom 5,500 are pilots, while another 9,000 are employed as cabin crew.

Fórsa said it will be making no public comment with respect to Ryanair until management has formally outlined a detailed position to the union.

Job cuts and pay cuts will also be extended to head-office and back-office teams.

Group chief executive Michael O’Leary, whose pay was cut by 50 per cent for April and May, has now agreed to extend this for the remainder of the financial year to March 2021.

Due to EU government flight restrictions, Ryanair said it expects to operate less than 1 per cent of its scheduled flying programme in April, May and June.

Traffic of less than 150,000 passengers will be 99.5 per cent behind the quarterly budget of 42.4 million passengers.

While some return to flight services is expected in the second quarter, Ryanair expects to carry no more than 50 per cent of its original traffic target of 44.6 million in the period.

For the full year ended March 2021, Ryanair now expects to carry less than 100 million passengers, more than 35 per cent below its original 154 million target.

When scheduled flights return in Europe, Ryanair said it 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” from some EU governments.

The airline said such activity was in breach of EU rules, and that it would challenge the bailouts in EU courts to “protect fair competition in Europe’s aviation market”.

Ryanair also said it was in active negotiations with both Boeing and Laudamotion's A320 lessors to cut the number of planned aircraft deliveries over the next two years.

In terms of outlook, Ryanair said that given the uncertain duration of the Covid-19 crisis, and a slower return to “normal” flight services, it cannot provide any financial guidance for its full year ending March 2021.

The group expects to report a net loss of over €100 million in the first quarter, with further losses in the second quarter (peak summer) due to the substantial decline in traffic arising from Covid-19 fleet groundings.

Ryanair entered the crisis with almost €4 billion in cash, and said it would continue to “actively manage” these resources to ensure it can survive the pandemic, and “return to lower-fare flight schedules as soon as possible”.

Colin Gleeson

Colin Gleeson

Colin Gleeson is an Irish Times reporter

Peter Hamilton

Peter Hamilton

Peter Hamilton is a contributor to The Irish Times specialising in business