Ryanair: dismissal of 3 000 people in perspective

  •   05/05/2020 - 14h46
  •   DEHOUI Lionel

In this period of major health crisis, companies are taking decisive action to avoid bankruptcy. In France, short-time working has emerged as a rescue measure to save some companies. However, other groups that are highly recognised at both European and international level are adopting other measures internally. Indeed, many companies have decided to reduce their workforce in order to face the health crisis caused by Covid-19. Some analysts consider this measure necessary while others are far from sharing this opinion. But the question is not there for the Ryanair group, even if it took time to analyse the situation. Indeed, Ryanair has made public its intention to dismiss more than 3 000 employees in its team. The main reason evoked by the group remains the Covid-19 pandemic.

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Ryanair: dismissal of 3 000 people in perspective
Image copyright: Aurelijus Valeia - Flickr

The nature of redundancies and wage cuts

It is now clear that the Irish airline group will be laying off a large part of its team. All minds are rightly wondering about the jobs that will be affected. The Ryanair group immediately lifted the veil. He said that pilots and cabin crew will be the most affected. At the same time, the Ryanair group said it would implement another important measure.

Once again the group was not afraid to assert the measures it considered indispensable. It announced that it would use unpaid leave to be able to hold out in the face of this health crisis caused by the Covid-19. One can thus see to what extent the group's activities have been paralysed by the virus that has been raging since last December. In addition, Ryanair plans to cut salaries by 20%.


Reduction of targets

It is almost impossible to cope economically with the devastation of the coronavirus. When it passes through a country, companies in the tourism and travel sector are the first to be hit. Because international trips are cancelled spontaneously. In this respect, the Ryanair group expects to use less than 1 % of its total regular travel programme. This forecast concerns the months of May and June 2020.

In its forecasts, Ryanair did not stop there. He gave an estimate of its activity from the first quarter to the end of June 2020. He publishes that it will reach 150 000 passengers. However, he had set a target of 42.4 million passengers. Clearly, the effects of Covid-19 are considerable on the operation of the group. It is clear that it will experience significant losses at the end of its first quarter.


Wage reduction and losses

The measures adopted by the group are multiple and should help it to achieve its objectives readapted to the crisis situation. Ryanair stated that it had more than €4 billion in cash at its disposal at the beginning of this crisis situation. At the beginning of this month, it estimates a significant net loss of more than EUR 100 million. A loss that he expects to incur over the first quarter as a whole.

In addition, the company proceeded to reduce the salary of its Managing Director Michael O'Leary. A 50% reduction was applied to his April salary. The one in May will suffer the same fate. However, the CEO has agreed to an extension of the reduction in his salary to 50% of the remainder of 2020 until 2021.