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Ryanair Slashes Jobs as Low-Cost Demand Dwindles
Ryanair has announced that over 250 office jobs have been lost due to the COVID-19 pandemic.
These jobs have been cut at its offices in Dublin, Madrid, Wroclaw in Poland and Stansted near London, which are due to re-open on June 1.
Ryanair staff levels will reduce in four of its offices due to a combination of ends of fixed-term contracts or probationary periods, resignations and redundancies.
In addition to this, Ryanair is planning to finalize up to 3,000 job cuts across Europe following meetings with its pilot and cabin crew unions, as well as 20% pay cuts.
Only 40% of Ryanair’s normal flight schedule is set to resume from July onwards. The airline has operated less than one percent of its normal flight schedules during April, May and into June.
Ryanair is expecting to carry over 35% fewer passengers than its over 155 million passenger target for the end of March 2021, carrying less than 100 million.
The People Director at Ryanair, Darrell Hughes, said in a press release: “Regrettably, we will now have a small number of compulsory redundancies in Dublin, Stansted, Madrid and Wroclaw to right size our support teams for a year when we will carry less than 100m passengers due to the Covid-19 crisis.”
“Further announcements on Ryanair crew job losses and pay cuts are expected before the end of May in the light of further and on-going flight restrictions,” added Hughes.
In the press release, Hughes also stated that Ryanair is “forced to compete with flag carrier airlines who have received over €30bn in unlawful state aid from their Governments, and who will be able to engage in below low cost selling for many years with the benefit of this illegal state aid.”
In usual circumstances, individual states require approval from the European Commission before it is able to grant aid to an ailing airline. However, due to the COVID-19 pandemic, the Commission has used the ‘Exceptional Circumstances’ rule to make it easier for individual governments to give aid to airlines struggling due to less demand for air travel.
While this means the state aid may not necessarily be illegal, Ryanair’s pre-existing point of the aid being unfair is understandable. In the long-term, it could make it more difficult for Ryanair to keep prices down and remain competitive. That being said, aid is only being granted to prevent airlines from losing out due to the pandemic, and governments are not supposed to bail out airlines that would be economically unviable after the aid has been granted to them.
The International Airlines Group (IAG) that owns Aer Lingus and British Airways, among others, have not requested state aid as they have cash reserved. However, in a recent press statement, Ryanair boss Michael O’Leary revealed a list of airlines requesting or in receipt of state aid to the value of over €30bn.
But it is unlikely to be the case that the aid will be of much use to airlines, besides to cover lost revenues when little cash reserves are held by the airline so that airlines can resume service once demand returns. Especially considering much of this aid is through loans, so will have to be returned.
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