Ryanair to cut capacity by 80%; cannot rule out grounding whole fleet

Budget European carrier Ryanair said it expected to cut seat capacity by up to 80% in April and May due to the spread of the coronavirus and could not rule out grounding its entire fleet.

The company on Monday said that flight bans across Europe meant it would ground most of its fleet over the next seven to 10 days.

“In those countries where the fleet is not grounded, social distancing restrictions may make flying to all intents and purposes, impractical, if not, impossible,” Ryanair said in a statement.

“We have seen a substantial decline in bookings over the last 2 weeks, and we expect this will continue for the foreseeable future.”

Over the past week, Italy, Malta, Hungary, Czech Republic, Slovakia, Austria, Greece, Morocco, Spain, Portugal, Denmark, Poland, Norway and Cyprus have imposed flight bans of varying degrees, from all flights to and from the country, or banned flights to and from countries with high risk of Covid-19 infection.

Ryanair said it was taking immediate action to cut operating expenses and improve cash flows including grounding surplus aircraft, deferring all capital expenditure and share buybacks, freezing recruitment and discretionary spending.

It was also and implementing a series of voluntary leave options for staff, temporarily suspending employment contracts, and "significant" reductions to working hours and payments.

"The Ryanair Group has strong liquidity, with strong cash and cash equivalents of over €4bn as at 12 March. Our focus now is on completing as much of the scheduled flying program as is permitted by national governments over the next seven days, so that we can repatriate customers, where possible, even as flight bans are imposed and air traffic control and essential airport services are reduced."