Shares in Ryanair and IAG, which owns Aer Lingus, tumbled on news of up to 4,000 jobs across the two airlines potentially being lost as part of the continued fallout from the Covid-19 disruption.
Ryanair shares plummeted by over 6% after it said it may lay off up to 3,000 employees and not see a return to normal passenger demand and pricing levels until the summer of 2022 at least.
The airline said it will shortly notify trade unions about a restructuring and job loss programme, which it plans to commence in July. It said the programme “may result in the loss of up to 3,000 mainly pilot and cabin crew jobs, unpaid leave, and pay cuts of up to 20%, and the closure of a number of aircraft bases across Europe until traffic recovers.” The job losses would see a mix of temporary and permanent lay-offs.
Aer Lingus said it was in talks with its employees and their unions with up to 900 jobs – 20% of its 4,500 strong workforce – at risk due to its grounded schedules.
Aer Lingus’ owner IAG also said it secured new loan funding worth €750m for its Iberia subsidiary and another €260m for Vueling, its Spanish low-fares carrier. IAG shares were down by over 3%.
Ryanair said less than 1% of its scheduled flights will take off during the current quarter of this calendar year and that while some flights may return between July and September – the second quarter of its financial year – it will still likely see a fall in passenger numbers of more than 35% for the full year.
That means that it will carry less than 100 million passengers over the 12 months to the end of next March, compared to an initial target of 154 million people.
Ryanair said it will review its growth plans and aircraft orders and slammed state aid support for some airlines across Europe.
Earlier this week IAG warned it may cut up to 12,000 jobs at British Airways after reporting an operating loss before exceptional items of €535m and warning it may take several years for air travel demand to return to normal levels.
As the pandemic fallout continues to severely hit the airline industry, the British government has reportedly hired Morgan Stanley for advice on a package of measures to keep its airlines in business during the crisis.
The investment bank, originally drafted in to handle a possible bailout of Virgin Atlantic, has apparently been awarded a broader mandate to examine ways to support the entire airline sector in Britain.
The move follows the boss of London’s Heathrow Airport warning that Britain risks destroying its aviation sector by not propping up airlines as countries such as the US and France have done.
Elsewhere, planemaker Boeing raised $25bn (€29bn) in debt, to help it avoid taking State aid.
Lufthansa’s chief executive warned against government interference in the airline’s management as it seeks a €9bn state bailout – which could see the German government take a 25% stake in the airline - as a way to survive the corona pandemic.
The fate of Norwegian Air remains uncertain after bondholders turned down a proposed debt-to-equity swap, seen as vital to the airline's survival.
-Additional reporting Reuters