Ryanair expects to park the majority of its fleet over the next week to 10 days as the impact of the coronavirus escalates, and could suspend all of its services for April and May.
“We have seen a substantial decline in bookings over the last two weeks, and we expect this will continue for the foreseeable future,” says the low-cost carrier. “We will continue to monitor demand, as well as government flight restrictions, and we will continue to make further cuts to schedules as necessary.”
It highlights that over the past week Italy, Malta, Hungary, the Czech Republic, Slovakia, Austria, Greece, Morocco, Spain, Portugal, Denmark, Poland, Norway and Cyprus have each imposed some form of flight ban.
”Ryanair expects the result of these restrictions will be the grounding of the majority of its aircraft fleet across Europe over the next seven to 10 days,” it says. “In those countries where the fleet is not grounded, social-distancing restrictions may make flying to all intents and purposes, impractical, if not, impossible.”
For April and May it expects to reduce its seat capacity by up to 80%, and cannot rule out a full grounding of the fleet.
The group is now taking action to reduce its operating costs and boost its cash flows by grounding surplus aircraft, deferring all capital expenditure and share buybacks, freezing recruitment and discretionary spending, implementing voluntary leave for staff, temporarily suspending employment contracts, and reducing staff working hours and payments.
”Ryanair is a resilient airline group, with a very strong balance sheet, and substantial cash liquidity,” states group chief executive Michael O’Leary. “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 points out that it has a “strong liquidity” position, with cash and equivalents of €4 billion ($4.4 billion) as of 12 March.