Michael O’Leary, the Chief Executive of Ryanair has warned staff that job losses for both pilots and cabin crew are highly likely after the airline yesterday reported a combined drop in first qaurter profits of 41% over the last two years. O’Leary says the Dublin-based airline is currently operating with a surplus of nearly 500 pilots and 400 cabin crew – to make matters worse, based on current forecasts the airline will need an additional 600 fewer pilots and cabin crew over the next six months.
The finger of blame has been pointed firmly at aircraft manufacturer Boeing for delays the airline is facing in deliveries of its new 737MAX aircraft. Ryanair had been expecting to take delivery of up to 58 of these brand new densified aircraft in time for the Summer 2020 schedule but this has now been seriously pushed back while the 737MAX remains grounded worldwide.
In yesterday’s update, Ryanair says it is tentatively expecting to start introducing the 737MAX into its fleet in January 2020 – if regulators approve its re-entry into service by then. Based on that timeline, Ryanair is hoping to receive 30 new aircraft in time for Summer 2020 but O’Leary admits this figure is optimistic.
Also to blame is the current political uncertainty in the UK surrounding the possibility of a no-deal or so-called ‘hard’ BREXIT at the end of October. The UK is one of Ryanair’s most important markets but the airline says base closures and redundancies may be announced here, as well as in Ireland, because of BREXIT.
“I’m sorry and I apologise sincerely to all of you for this bad news and any uncertainty this will cause you over the coming weeks,” O’Leary told staff in a video message.
“But it’s being driven by the MAX delivery delays and the threat of a no-deal BREXIT that are clearly huge and uncertain challenges.”
O’Leary finished by saying that the airline was “facing into a difficult winter” but would try to preserve as many jobs as possible. Any redundancies are likely to be announced at the end of the summer, with a second wave of job cuts expected to come immediately after Christmas.
Along with 737MAX delays and political uncertainty in the UK, the airline has taken a hit from rising fuel prices and an airfare price war in Germany. Today, Lufthansa also reported a drop in earnings on the back of overcapacity and suppressed fares on short-haul flights in its home market.