Low-cost carrier Ryanair estimates its move to cancel around 50 flights a day over the next six weeks to ease problems stemming from a shortage of available crew could cost it up to €25 million ($21 million).
Chief executive Michael O'Leary outlined the financial impact during a press conference today, as the airline sought to explain its decision to begin cancelling flights. The carrier will cancel an average of 48 flights a day, and has now published the full list of flights, over the next six weeks.
"We have tried to over-allocate leave to pilots in September and October while running a busy summer schedule, and we don't have enough standby coverage to be able to cover the inevitable disruption that happen at this time of the year," explained O'Leary.
"For about the previous eight or nine days, our punctuality had fallen from something of an average of about 90% to under 70%," he says.
"We had two choices. We can either run the operation with a 55-60% punctuality rate, which will create far more flight disruptions and inevitable cancellations, and huge passenger dissatisfaction caused to 35% of our customer base, or take out about 50 flights for the next six weeks while we have this crewing issue, and thereby create additional standby pilots and aircraft, and get our punctuality back up to 90% and eliminate the risk over the next six weeks," he says.
The airline has taken out a line of flying out of nine of its busier airports, and two lines out of its biggest operation at London Stansted, on routes where it has multiple frequencies. "By taking out one of the lines of flying out of those busier bases we will have many more alternatives to communicate to passengers," explains O'Leary.
"We will not be trying to claim exceptional circumstances," he adds, noting customers with cancelled flights will be eligible for compensation. "This is our mess up. When we make a mess-up at Ryanair, we come out with our hands up.
"In terms of its impact on the company, clearly there is a large reputational impact, for which I apologise and we will try to do better in future.
"In terms of lost profitability, we think it will cost us something of the order of up to €5 million over the next six seeks. And in terms of the EU261 [passenger] compensation we think it will cost a maximum of €20 million, but that will depend on how many of the alternate flights our customers take up over that period of time."