Ryanair warns it could shut bases and cut jobs after 737 Max delays
Ryanair has warned pilots and cabin crew it could close bases and cut jobs after the date for delivery of its first 10 of Boeing’s grounded 737 Max aircraft slipped into the autumn.
The Irish low-cost airline said Boeing would not deliver the first aircraft until September or October at the earliest, as Ryanair does not take deliveries during its peak summer months of June, July and August, according to a memo dated 27 January.
Two months ago Ryanair said it hoped to get the first of the 135 new 737 Max planes it has ordered in March or April, already two months after their original due date.
The memo said the airline’s commercial team would be drafting plans for job cuts over the coming week, with staff to be informed in the first or second week of February. Ryanair declined to give details on the number or location of the redundancies.
Boeing’s 737 Max aircraft have been grounded worldwide since March 2019, following two deadly crashes which were blamed on the model’s faulty systems. A total of 346 people died in the two crashes.
In the memo Ryanair executive Eddie Wilson wrote that the airline’s summer schedule relied on the delivery of the 10 planes. He apologised for the uncertainty and said the airline would try to prioritise cuts in flight frequencies over the closure of bases.
Boeing, the world’s largest aerospace company, has repeatedly pushed back its estimate for when the 737 Max will be allowed to fly again. Last week, it said that deliveries would recommence in “mid-2020” as it awaits US regulators to recertify the plane’s safety following software updates.
US manufacturer United Technologies on Tuesday said it expected a hit of between $550m and $600m to 2020 operating profits from its Collins Aerospace subsidiary as a result of factors including the 737 Max.
Last week the US airline Southwest said the grounding had cut $828m from its 2019 profits, while Tui, the world’s biggest tour operator, last month warned that an extension of the grounding past April could cost it up to €400m in 2020.
Ryanair on Tuesday also further escalated its row with the UK government over assistance given to struggling regional carrier Flybe. In an open letter to the UK chancellor, Sajid Javid, Ryanair chief executive Michael O’Leary reiterated claims that the government had breached state aid rules by offering a tax holiday to Flybe. O’Leary also called for the publication of the “secret deal” offered to Flybe.
O’Leary described Javid’s statement that Flybe needed “time to pay” taxes as “absurd” because the company is owned by a consortium led by the billionaire Richard Branson’s Virgin Atlantic.
The outspoken Ryanair boss criticised “permanent Caribbean resident Richard Branson and his billionaire pals”, saying they were unwilling to bail out Flybe because it is a “loss making turkey” that is “doomed to keep failing”.
O’Leary was himself previously a billionaire in euro terms, according to the Sunday Times Irish rich list, although his wealth fell to €865m last year because of a fall in Ryanair shares.