Ryanair to cut 18,000 more flights
LONDON — Ryanair, the low-fare Irish airline struggling to deal with staff shortages that prompted the cancellation this month of 2,100 flights, said Wednesday that it would cut 18,000 more.
The staffing problem, largely attributed to a failure to find replacements for vacationing pilots, also led the company to drop its bid to buy the troubled Italian flag carrier Alitalia, Ryanair said.
The developments, interpreted as a sign that the airline is stabilizing its operations, bolstered its shares, which rose 4 percent in London on Wednesday. By announcing the flight cancellations now, the airline will not have to pay any fines it might have had to pay had it waited, and many analysts had viewed the potential acquisition of Alitalia as a bad fit.
The latest round of cancellations by the airline, known for low prices and limited service, will affect about 400,000 passengers flying on 34 routes from Nov. 17 to March 18, the airline said. Some of the destinations that will be affected most are Hamburg, Germany; Thessaloniki, Greece; and Trapani, Sicily.
Michael O’Leary, chief executive of Ryanair, was forced to apologize again to customers and shareholders, after having acknowledged earlier this month that scheduling problems had led to flight cancellations affecting about 315,000 customers.
“We sincerely apologize to those customers who have been affected by last week’s flight cancellations, or these sensible schedule changes announced today,” O’Leary said in a statement Wednesday. “While over 99 percent of our 129 million customers will not have been affected by any cancellations or disruptions, we deeply regret any doubt we caused existing customers last week about Ryanair’s reliability, or the risk of further cancellations.”
The airline has offered pilots bonuses for working extra days this year and postponing a week of vacation until next year. “This now eliminates the roster problems this winter, because slower growth means we no longer require our pilots to reorganize their leave,” the company said in the statement.
Ryanair will issue vouchers to passengers booked on flights that have since been canceled, at a cost of about $30 million — a figure that the company said would not significantly affect its profit.
Ryanair’s problems with pilot schedules had raised questions in Italy about whether it would be a suitable owner for Alitalia, prompting Italian authorities to investigate the matter and to monitor Ryanair’s activities.
The announcement that Ryanair would not continue its pursuit of Alitalia was a source of relief to investors, said Daniel Roska, an analyst at the research firm Sanford C. Bernstein.
“It doesn’t fit at all to Ryanair’s strategy,” Roska said. “You would’ve got a bad airline with union conflicts that doesn’t fly the same aircraft. People were worried that they might wind up with Alitalia and that would cause management distractions.”
The cancellations will most likely slow growth at the airline, which was introduced three decades ago and now carries 129 million customers a year on 1,800 routes.
The decision to suspend some routes was a sign that the airline would be unable to maintain its breakneck growth, Roska said.
The airline “is simply being run too tight,” he said. “They’re not finding sufficient pilots to get into their fleets and that endangers growth prospects.”
The growth rate also means the company is likely to face the kinds of problems that other middle-market carriers have seen. “They’re not the underdog anymore,” Roska said. “We will see stakeholders like pilots come back and say: If you’re the largest carrier, you have to play by the books.”