Ryanair slashes flights, says could ground entire fleet

Ryanair (RYA.I) will ground most of its aircraft over the next seven to 10 days as Europe's biggest low-cost airline braces for an up to 80% cut in capacity over the next two months and could even ground its entire fleet due to coronavirus travel restrictions.

It said the "extraordinary and unprecedented travel restrictions" being implemented across the continent had resulted in a substantial decline in bookings over the last 2 weeks, which it expected it to continue for the foreseeable future.

With seat capacity set to shrink by up to 80% in April and May, Ryanair said a full grounding of the fleet cannot be ruled out as "social distancing" restrictions in countries where its fleet is not grounded "may make flying to all intents and purposes, impractical, if not, impossible."

It said it would make further cuts to schedules as necessary. To reduce operating expenses and improve cash flows, the Irish airline said it would ground surplus aircraft immediately, defer all capital expenditure and share buybacks, freeze recruitment and discretionary spending.

A series of voluntary leave options will also be introduced, along with temporary suspensions to employment contracts, and significant reductions to working hours and payments. Ryanair said it has strong liquidity, with strong cash and cash equivalents of over 4 billion euros as at March 12. "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," CEO Michael O'Leary said.

EasyJet said it may also have to ground most of its planes as a result of travel bans and falling demand.

Holiday company Tui has said it will suspend the "majority" of its operations, affecting "package travel, cruises and hotel" bookings.

Passenger numbers and bookings have plummeted in recent weeks as countries closed their borders and holiday makers cancelled trips.

"There is no cash whatsoever coming in the doors," said aviation analyst John Strickland, who warned that airlines could lose money very quickly.

Mass cancellations of flights in an unprecedented situation may leave passengers unsure of their rights.

For those yet to fly out, it is relatively straightforward - you should be given a refund or, in some cases, the option to rebook for another date.

If this is part of a package holiday, then the entire cost of the holiday will be refunded. A separate hotel booking will require a call to the hotel, asking for leeway, or perhaps a travel insurance claim if the policy covers you.

For those trying to get home, an airline has a duty of care to get you back if they have cancelled your flight. This may mean flying with another airline or putting you on a different mode of transport. If an extra overnight stay is required, the airline should pay for that as well as the food you need.