Ryanair leads collapse in travel stocks on back of flight cut plans 

Ryanair will cut flight capacity by 20% in September and October. Picture: Niall Carson/PA Wire

Ryanair has led a further fall in European airline and tourism shares on the back of it announcing a cut to flight numbers and passenger capacity over the next two months.

The airline’s shares – down by over 30% since January – tumbled nearly 8% as it said it would be reducing its flight capacity by 20% during September and October due to forward bookings having “notably weakened” over the past 10 days.

The capacity reduction covers a mix of lower passenger allowance and lower flight numbers. However, Ryanair said most of the cuts would result in reduced frequency on certain routes rather than total route closures.

It also said that the flight reductions would be “heavily focused” on countries where recent rises in Covid cases have led to increased travel restrictions; such as Spain, France and Sweden.

It said Irish routes will be affected too, without giving any firm details on affected routes. 

Ryanair has urged the Government to include EU countries with lower or similar Covid case rates to Ireland in its so-called 'green list' of safe destinations, particularly Germany.

It said the green list hasn’t worked and testing at airports and effective tracing are the only ways of allowing for safe air travel across the EU.

Ryanair said its capacity cuts for the next two months are “unavoidable” and blamed the low level of bookings on the Covid restrictions in a number of EU countries.

Airline stocks have suffered greatly since the Covid-19 pandemic hit Europe in the spring. They took a significant hit last Friday after the UK imposed fresh quarantine measures on travellers from France and other countries.

In latest trading, all were down again. Aer Lingus and British Airways owner IAG fell more than 5%; EasyJet shed 4.6%, Lufthansa was down nearly 4% and Air France-KLM fell just over 3%. 

Lufthansa cabin crew, at the weekend, backed the German carrier's cost-saving plans.

Meanwhile, shares in holiday group TUI – which last week secured an extra €1.2bn in credit from Germany’s state development bank, but also raised the need for more funds after suffering heavy losses – tumbled by more than 5%.