Ryanair cuts flights as coronavirus hits bookings

Ryanair is cutting a quarter of flights to and from Italy for three weeks from the middle of this month as coronavirus hits bookings.

The airline told passengers on Monday that it would cut its short-haul flight programme, mainly to and from Italy, by up to 25 per cent for three weeks from Tuesday, March 17th – St Patrick’s Day – to Wednesday, April 8th.

Ryanair blamed a “significant drop” in bookings over the late March/early April period, in response to the covid-19 virus” for its decision.

The Irish carrier added that a significant number of passengers were not showing up for flights, particularly those to and from Italy, the European country worst hit by coronavirus, now dubbed covid-19.

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The Republic is one of the destinations to which British Airways, part of the same group as Irish airline Aer Lingus, is reducing flights from Heathrow between March 17th and 28th.

Along with the Republic, British Airways will curtail services to Italy, France, Austria, Belgium, Germany and Switzerland.

Aer Lingus said it continued to fly to all destinations on its network as none were subject to travel restrictions. “Aer Lingus is following all guidelines from the relevant authorities,” a statement said.

Last week the airline cancelled 10 flights to Milan during the late March, early April period. It has contacted the affected passengers.

Ryanair is continuing to monitor the situation and will adjust schedules as it develops, according to a statement.

Passengers’ wellbeing

The company noted that it was working with relevant authorities as well as following World Health Organisation (WHO) and European Union Aviation Safety Agency (EASA) guidelines to ensure passengers and workers' wellbeing.

Pilots and cabin crew are taking paid and unpaid leave as the airline copes with the downturn, while it has frozen recruitment, promotions and pay.

Chief executive Michael O’Leary confirmed that bookings for the end of March and early April had dropped notably.

“It makes sense to selectively prune our schedule to and from those airports where travel has been most affected by the covid-19 outbreak,” he said.

Mr O’Leary added that Ryanair would cut schedules “sensibly” over coming weeks to reflect weaker bookings and changing travel patterns.

He pledged that Ryanair would inform passengers 14 days before any schedule changes.

Mr O’Leary also stressed that the airline would continue to comply with guidelines issued by governments, the WHO and EASA.

His company does not expect the cancellations to hit profits for the current financial year, which ends on March 31st.

Ryanair expects profits this year to be between €950 million and €1.05 billion, which it said on Monday would remain unchanged.

However, its statement warned that it was too early to speculate about the coronavirus outbreak’s impact on earnings in its 2021 financial year.

The airline argued that it was one of its industry’s “strongest” with €4 billion in cash and virtually no debt.

“We expect that this covid-19 virus will result in further EU airline failures over coming weeks,” it added.

Effect on global growth

Meanwhile, the Organisation for Economic Co-operation and Development (OECD) warned that a longer and more intensive coronavirus outbreak could halve worldwide growth to 1.5 per cent.

The Paris-based body, which represents mainly rich nations, shaved its forecast for worldwide economic growth this year to 2.5 per cent from 2.9 per cent on the back of the virus’s impact.

An OECD statement blamed widespread factory and business closures in China for the likely slowdown in growth.

Its warning came as heavy hints of central bank support for the global economy jolted stock markets higher on Monday, following a dire week in which global equities lost one-tenth of their value.

Two of Europe’s most senior central bankers have said they are closely monitoring the economic impact of the coronavirus and stood ready to act if needed.