Irish low-cost airline Ryanair lowered its target number of passengers this year on Wednesday, joining a number of European carriers that have announced further capacity cuts due to the repeated growth in the number of people infected with Covid-19 and travel restrictions.
"Winter 2020 will be written off," Ryanair CEO Michael O'Leary predicted in an interview with Reuters.
Ryanair now expects to carry 50 million passengers in the fiscal year by the end of March 2021, two-thirds less than last fiscal year. We lowered the target to 80 million in May, to 60 million in July, and it could fall even lower, O’Leary adds.
According to his announcements, the largest European low-budget carrier is preparing to close several bases and will reduce capacities in some of them.
Recovery from the effects of the coronavirus pandemic and measures to combat it is uneven and more difficult than expected, due to travel restrictions and quarantine in countries across Europe, airlines say.
Ryanair’s competitor easyJet has already cut 4,500 jobs and closed three bases in the UK, and on Tuesday further reduced its flight schedule for the current quarter.
"Prices will plummet" in the coming months, said the Ryanair chief, who was among the first to warn of the carrier's likely price war, fueled by the epidemic. The practice has started in China, whose market is recovering and some carriers are now offering affordable service packages.
Under such conditions, traditional carriers, such as Air France-KLM and Lufthansa, could be forced to seek additional state aid, in addition to the billions of euros already approved, analysts warn. Air France must recover strongly to avoid nationalization, Reuters adds.