Michael O’Leary takes 50% pay cut as Ryanair warns refunds may take up to six months

Michael O’Leary takes 50% pay cut as Ryanair warns refunds may take up to six months
Michael O’Leary takes 50% pay cut as Ryanair warns refunds may take up to six months

Ryanair boss Michael O’Leary has said that it could take up to six months for the airline to refund passengers for the flights which have been cancelled as a result of the global Covid-19 / Coronavirus pandemic which has brought the world economy to a stop and crippled the aviation sector.

O’Leary, who has taken a 50% paycut until at least March 2021, said that the airline was struggling to cope with the sheer volume of refunds which it has to process. The low-cost carrier has around 25 million refunds which it has pledged to return to customers whose flights were cancelled.

Just recently, Ryanair Holdings plc today released their March traffic statistics which were almost 50% down on the same period in the previous year. The number which were announced on April 3 showed a significant decline in passengers:

   2019  2020  (LF)  Growth
Ryanair Group  10.9m  5.7m (91%) -48%
Ryanair  10.5m  5.5m (91%) -48%
Lauda  0.4m  0.2m (91%)  -50%

 

Rolling Annual  143.1m  148.6m (96%) +4%

According to the statement issued by Ryanair:

  • Ryanair operated over 33,000 scheduled flights (64,000 budgeted) in March incl. a number of rescue and medical flights on behalf of various EU Govts.
  • Due to widespread EU Govt flight bans and restrictions, Ryanair expects to carry minimal if any traffic during the months of April & May.

Ryanair also recently confirmed that it would be cutting 3,000 jobs, which amounts to 15% of its workforce. It is having to restructure it’s business to cope with the impact of the Coronavirus pandemic which has been catastrophic for the airline, travel, and tourism sectors. The jobs under threat are mainly pilot and cabin crew jobs and other remaining staff may see pay cuts of up to 20%.

According to O’Leary, the planned cuts are “the minimum that [Ryanair] need just to survive the next 12 months” and said that if a vaccine were not found quickly, “[Ryanair] may have to announce more cuts and deeper cuts in future”. The restructuring of the airline would also likely result in the closure of some UK regional hubs.

Depsite the backlog, however, O’Leary confirmed, “If you want a cash refund, you will receive a cash refund.”

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