15th Oct 2020 09:07
(Alliance News) - Budget airline Ryanair Holdings PLC on Thursday said it has reduced its winter schedule further due to increased flight restrictions imposed by European governments, leading to further staff cuts.
Winter capacity between November and March has been cut to 40% of the year prior's levels, reduced from the previously planned 60%.
The company expects the full-year traffic to be down by approximately 38 million passengers. This guidance could be further revised downwards if European governments continue to "mismanage air travel" and impose more lockdowns this winter, Ryanair said.
Tighter restrictions have been imposed through much of central Europe, including Ireland, Austria, Belgium, Portugal and the UK.
These have led to slightly weaker bookings in October and substantially fewer bookings in November and December.
Chief Executive Michael O'Leary said: "We have continued to flex our capacity in September and October to reflect both market conditions and changing government restrictions, with the objective of sustaining a 70% load factor, which allows us operate as close to breakeven as possible and minimise cash burn. While the Covid-19 situation remains fluid and hard to predict, we must now cut our full year traffic forecast to 38 million guests."
Ryanair's financial year ends March 31.
Ryanair expects to maintain up to 65% of its winter route network, but with reduced frequencies.
The company also announced "significant" base aircraft cuts in Belgium, German, Spain, Portugal and Vienna. These are in addition to winter closures of bases in Cork and Shannon in Ireland and in Toulouse in France.
O'Leary said: "It is inevitable, given the scale of these cutbacks, that we will be implementing more unpaid leave, and job sharing this winter in those bases where we have agreed reduced working time and pay, but this is a better short term outcome than mass job losses.
"There will regrettably be more redundancies at those small number of cabin crew bases, where we have still not secured agreement on working time and pay cuts, which is the only alternative. We continue to actively manage our cost base to be prepared for the inevitable rebound and recovery of short haul air travel in Europe once an effective Covid-19 vaccine is developed."
O'Leary ended his statement urging all European governments to "immediately and fully" take on the EU Commision's traffic light system which permits air travel between European states for countries which are able to demonstrate that their Covid case rates are less than 50 per 100,000 population.
Ryanair shares were down 2.9% at EUR11.94 each in London on Thursday morning.
By Greg Roxburgh; [email protected]
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