Ryanair is preparing to cut flights by as much as 80% and a possible full system grounding. Ryanair made this announcement Wednesday 18 March on its corporate website. It is interesting that this announce is absent from its consumer website.
The Announcement
Ryanair is cutting flight schedules as it deals with disruptions caused by government restrictions and travel bans. The cuts are also in response to widespread passenger cancellations and other travel disruption across the flight network. The cuts will begin at midnight on 18 March and continuing until at least 24 March, 2020. Beginning 24 March at midnight, most if not all of Ryanair group flights will be grounded. This includes Lauda, Buzz and Malta Air. During a full grounding, there will be a limited number of flights between Ireland and U.K. to maintain essential connectivity. Here is the announcement:
Ryanair has a large regional route system. Here is their system route map:
Ryanair air is a regional passenger carrier with no cargo flights. Their primary competition in the regional market is EasyJet. A check of the EasyJet website shows no announcements of any planned service cutbacks.
What Ryanair Is Saying
“We are working with our people and our unions across all EU countries to address this extraordinary and unprecedented COVID-19 event, the impact and duration of which is, at this time, impossible to determine”.
“Our focus now is on completing as much of the scheduled flying program as is permitted by National Governments over the next 7 days, so that we can repatriate customers, where possible, even as flight bans are imposed and ATC and essential airport services are reduced”.
“Our priority remains the health and welfare of our people and our passengers, and we are doing everything we can to ensure that they can be reunited with their friends and families during these difficult times,” O’Leary said. “Ryanair is a resilient airline group..we can, and will, with appropriate and timely action, survive through a prolonged period of reduced or even zero flight schedules, so that we are adequately prepared for the return to normality.”
Can Ryanair Weather The Storm?
The good news for Ryanair is that they are sitting on a cash pile of $4.47 billion. This alone puts Ryanair in a much better position than most airlines around the globe. They have a plan that will include:
- Grounding surplus aircraft,
- Deferring any stock buybacks,
- Instituting a hiring freeze,
- Cutbacks in discretionary spending.
The carrier is asking employees to take voluntary leaves, reduce working hours and suspend employment contracts.
The Ripple Effect For Boeing
Ryanair, like Southwest, is an exclusive operator of Boeing 737 aircraft. The airline flys over 450 Boeing 737-800 aircraft across its extensive regional system. Boeing has a Ryanair order for 135 737MAX 200 aircraft with an option for an additional 75 737Max200 planes. Ryanair was preparing for route expansion with the hopes of receiving it’s first 737MAX aircraft for the busy summer schedule. With delivery times uncertain pending recertification of the 737MAX and uncertainty in the travel industry, this may be a blessing for the airline as they don’t have to make aircraft payments until they receive the delivery. If things get worse, they could defer delivery until they are financially ready to fly the new aircraft.
