DUBLIN (Reuters) - 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.
Ryanair shares were down 20% at 8.41 euros by 1035 GMT.
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 is working with unions across the EU on those measures.
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.
Additional reporting by Tanishaa Nadkar in Bengaluru; editing by Vinay Dwivedi and Jason Neely