Wednesday 26 June 2019

Ryanair cost-cutting plan to threaten jobs and fleet expansion

Internal airline memo warns staff may have to transfer to avoid job cuts

In the internal memo, the airline's chief people officer, Eddie Wilson, told staff that
In the internal memo, the airline's chief people officer, Eddie Wilson, told staff that "as this is our second profit warning this year, we are now undertaking a detailed review of all aspects of our business". Photo: Getty

Fearghal O'Connor

Ryanair is drawing up cost-saving measures that could lead to job losses, hit staff and recruitment, slow down fleet growth and see the airline renegotiate airport contracts, it has warned in a memo.

The stark internal warning - seen by the Sunday Independent - warns of a detailed cost-cutting review following its second profit warning in four months.

The memo - sent to staff on Friday as the company warned of a 10pc fall in expected profits to between €1bn and €1.1bn - urged staff to "redouble our efforts to weather the storms of Brexit, lower air fares, higher prices, and over-capacity in the European airline sector at this difficult time".

In the internal memo, the airline's chief people officer, Eddie Wilson, told staff that "as this is our second profit warning this year, we are now undertaking a detailed review of all aspects of our business".

He said the airline will review "loss-making and underperforming bases in advance of our winter 2019 schedule".

He added: "We will also be looking at other cost-saving measures including part-time/temporary contracts, seasonal bases, renegotiating airport and handling contracts, and possible slower fleet growth over the next year or two, which will slow down our pilot and cabin crew recruitment and promotions."

Ryanair plans over the next number of months to consult with staff and unions "in those countries where crew may be affected by cuts to loss-making routes or closing under-performing bases", said the memo.

It said management would do their "utmost" to facilitate base transfers for pilots and cabin crew looking to avoid job losses.

"It is important at this time that you keep your base preferences updated, so we have a clear picture of where people would most like to go in the case of route and/or base closures or reductions," the memo said. It blamed a 10pc cut in likely earnings for the current year on "lower air fares, higher oil prices, and significantly higher staff costs as a result of pay deals agreed with pilots and cabin crew over the last 12 months".

Friday's profit warning came on top of a 12pc cut in earnings announced in October, Wilson told staff.

"These are very difficult times in the European airline industry, with many casualties this winter," he wrote.

Ryanair, he said, was "built to withstand these industry downturns" - but only if it continued to improve service efficiency and lower costs.

Sunday Indo Business

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