MIAMI – Ryanair (FR) announced today a massive flight network cut. The airline will operate 40% of last year’s winter schedule’s capacity. Additionally, it plans a 70% capacity on flights and will (temporarily) close three bases.
The airline will close its Shanon (SNN), Cork (ORK), and Toulouse (TLS) bases. As the Irish Government imposed new travel restrictions, travel will fall to almost zero. FR has criticized this move, with a parody image on its Twitter account. FR had already warned employees about the base closure.
The airline opened its TLS base last year with two based aircraft. They opened 11 further routes in addition to the nine already served.
Ryanair has already closed other bases throughout the year. For example, it shut its German bases as part of a disagreement over wages. Also, FR closed its Las Palmas (LPA) base in the wake of the Boeing 737 MAX groundings.
25%- of Last Year’s Passengers Carried in 2020
The airline has further reduced flights, slightly in October and significantly in November-December. It previously expected to operate 60% of last winter scheduled flights. Alas, flights will fall to 40%. FR has already downsized its October flight schedule a few times.
With these reductions, calculated with the 70% planned load factor, FR expects to carry 38 million passengers this year. This is about a quarter of last year’s number, and even this can further decrease. Further changes depend on travel restrictions.
Despite all reductions, FR still has enough cash and the airline’s survival is in no doubt. Yesterday, Ryanair’s DAC CEO, Eddie Wilson said that FR would be the last person standing.
Comments from O’Riley
Group CEO, Michael O’Leary has commented on the news. He explained that the reductions allow the group to operate as close to breakeven as possible and minimize cash burn. “While the COVID situation remains fluid and hard to predict, we must now cut our full-year traffic forecast to 38m guests.”
He explained that the company still wants to operate a schedule as large as possible. By doing so, the airline can keep its aircraft and Crew current and employed while minimizing job losses. However, where the airline has implemented reduced working time and pay, more unpaid leaves will be inevitable.
At those bases, where the Crew has not agreed to FR’s terms, more redundancies can come. O’Leary also called on governments again to implement the EU’s new “traffic light” system.
Eu’s Traffic Light System
The EU Parliament approved the “Traffic Light System” on Wednesday. This will bring a unified travel restriction program among EU governments. The different restrictions, imposed by each state can cause distractions. Also, some restrictions discriminate or are simply too harsh, such as those from Hungary.
The new system differentiates regions instead of countries. The colors (green, orange, red) depend on the number of new cases in the last 14 days. However, there are several issues with the system. At first, each country can decide whether to adopt it or not.
Secondly, most of Europe would be red, according to the new system. Thirdly, even if most countries adopt it, the restrictions would still differ when handling passengers from red countries. Lastly, countries that test a lot and/or have a small population would not be at an advantage regardless.
Featured image source: Luca Flores