Ryanair has cancelled 80% of its flights until May and said it had not ruled out a “full grounding of the fleet”as a result of the coronavirus crisis. Europe’s largest short-haul airline is the latest in a growing list of global carriers to have cut flights and grounded planes as governments close the skies in…
Ryanair has cancelled 80% of its flights until May and said it had not ruled out a “full grounding of the fleet”as a result of the coronavirus crisis.
Europe’s largest short-haul airline is the latest in a growing list of global carriers to have cut flights and grounded planes as governments close the skies in an attempt to slow the spread of Covid-19.
“For April and May, Ryanair now expects to reduce its seat capacity by up to 80% and a full grounding of the fleet cannot be ruled out,” Ryanair said on Monday. “[The airline is taking] immediate action to reduce operating expenses and improve cashflows.”
Ryanair said over the past seven days, Italy, Malta, Hungary, the Czech Republic, Slovakia, Austria, Greece, Morocco, Spain, Portugal, Denmark, Poland, Norway and Cyprus had imposed flight bans. The restrictions are expected to lead to the grounding of the majority of its fleet across Europe over the next seven to 10 days.
Michael O’Leary, the chief executive, said: “Ryanair is a resilient airline group, with a very strong balance sheet, and substantial cash liquidity, and 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, which will come about sooner rather than later as EU governments take unprecedented action to restrict the spread of Covid-19.”
The airline industry has warned that without immediate multibillion-dollar bailouts most airline companies will go bust with months.
The US president has banned all flights to the US from Europe, including the UK and Ireland, for at least a month.
British Airways’ parent company, IAG, said it planned to cut capacity in April and May by at least 75%. American Airlines is also cutting international routes by 75%.
BA’s chief executive, Álex Cruz, warned his 45,000 staff on Friday that the coronavirus pandemic had caused a crisis “worse than 9/11” for the airline industry. In a memo entitled “thesurvival of British Airways”, Cruz said BA would be “parking aircraft in a way we never have before”.
Share prices in virtually all airlines have collapsed by more than 50% since the coronavirus crisis struck Europe. Shares in BA’s parent company, International Airlines Group, were down 24% to 266p at 11am on Monday. IAG shares are down 60% over the past month.
Peter Norris, the chairman of Virgin Group the majority shareholder of Virgin Atlantic, has asked the government to provide £7.5bn of emergency state support to try to rescue the UK aviation industry.
Consultants at the Centre for Aviation warned that without unprecedented intervention many airlines will go bust within weeks or months.
“As the impact of the coronavirus and multiple government travel reactions sweep through our world, many airlines have probably already been driven into technical bankruptcy, or are at least substantially in breach of debt covenants,” it said in a report on Monday.
“By the end of May 2020, most airlines in the world will be bankrupt. Coordinated government and industry action is needed – now – if catastrophe is to be avoided.”
The package holiday company Tui has cancelled travel to almost all of its holiday destinations.
“In this rapidly changing environment the safety and welfare of our guests and employees worldwide remains of paramount importance and thus Tui Group has decided, in line with government guidelines, to suspend the vast majority of all travel operations until further notice, including package travel, cruises and hotel operations,” a spokesman said.
“This temporary suspension is aimed at contributing to global governmental efforts to mitigate the effects of the spread of Covid-19.”
Tui shares collapsed by a further 32%. The shares have fallen from 977p on 17 February to 246p on Monday – a 75% decline.