Ryanair to cut 3,000 jobs – opens for state guarantees – E24

Irish low-cost airline Ryanair is very unhappy with the loan guarantee schemes that SAS, Norwegian and other airlines have received from various European countries.

The company will now have a judicial review of the cases in the Court of Justice of the European Communities. The company writes in a market update on Friday.

“When Ryanair returns to significant flights from July, the competitive landscape in Europe will be distorted by a large volume of state aid from some EU countries to their ‘national’ airlines. At the moment, this amounts to more than 30 one billion euros, in addition to salary support, mainly for the Lufthansa Group, Air France-KLM, Alitalia, SAS and Norwegian, ”the company writes in the announcement.

Ryanair believes that this state aid, which is mainly loan guarantees, violates EU regulations and will distort the competitive situation in aviation for several years. The company emphasizes that they will not request or obtain one for government support.

“Ryanair will challenge these illegal state aid schemes at the Court of Justice of the European Communities to ensure fair competition in Europe’s aviation market,” the company writes.

Want to cut jobs

The company also announces that 3,000 employees will lose their jobs. Most of these will be pilots and cabin crew. This is because the company does not believe that air traffic will normalize for at least two years, that is, around the summer of 2022.

Ryanair will also allow unpaid leave and pay cuts of up to 20 percent.

To cut costs, the company also warns that it will close several bases in Europe until traffic returns to normal.

By the end of June, Ryanair expects to fly less than one percent of the originally scheduled flights. As a result, the number of passengers is likely to drop to 150,000, down from the originally budgeted 42.4 million.

Starting in July, the company expects traffic to pick up a bit, but still be below 50 percent of the original plan.

Expecting a billion losses

Ryanair also cautions that for fiscal year 2021, a 35 percent decrease from the original target of 154 million passengers is expected. This means that the company now expects to carry fewer than 100 million passengers from April 2020 to March 2021.

For the current quarter, the company expects to lose more than 100 million euros, corresponding to NOK 1.12 billion. In addition, the company sees big losses in the next quarter, which includes the important summer season.

The company reports that it entered the crisis with around € 4 billion in cash, and that these are still actively managed to ensure they can survive the crisis.

Ryanair’s stock falls about two percent on the London Stock Exchange shortly after opening on Friday.