Ryanair boss Michael O’Leary has said he and all of the airline’s staff will have their pay cut in half, as the low-cost carrier attempts to ride out the coronavirus epidemic.
Speaking to the Financial Times, the 59-year-old boss of Europe’s biggest airline by passenger numbers said he was working on a best-case scenario of a two-to-three month shutdown of aviation as governments impose stringent measures prevent the spread of the disease.
Passenger numbers have collapsed in recent weeks, forcing Ryanair to prepare to ground “most to all” of its fleet this coming week, with only a few flights between the UK and Ireland to continue.
O’Leary said that his evaluation was based on looking at the way the situation had played out in China, where the outbreak began, which has not had any new domestic cases in the last two days:
“All that you can draw on is what appears to be the Chinese experience. Both for hope and optimism. They seem to have no new cases now in the last two days, that’s three months later but after very draconian lock down measures.
“If we follow the same pattern as the Chinese then I think certainly from our perspective . . . we’re talking about a close down that will last for at least three months”.
However, he admitted that “honestly none of us have any idea”.
The pay cut will last for April and May, after which the airline will reassess the situation.
As of the beginning of last week, Ryanair had about $4bn in cash, with an additional $8-10bn in undrawn credit lines and its 300 aircraft fleet.
O’Leary’s comments came as the UK’s airlines await details of a specially-designed package of measures to keep them airborne during the ongoing crisis.
Last week chancellor Rishi Sunak confirmed that the measures would be forthcoming in the coming days, whilst transport secretary Grant Shapps has been in regular talks with the industry over the industry’s requirements.
Yesterday it emerged that the government was reportedly considering a part-nationalisation of flag carrier British Airways, part of IAG group.
IAG boss Willie Walsh, who delayed his retirement and also took a pay cut to guide the conglomerate through the challenging period, is a long-time opponent of state aid for airlines, as was evidenced by his opposition to a bailout of collapsed regional carrier Flybe.
Governments around the world have begun to pump money into the struggling industry, with Norway’s authorities announcing late on Thursday night a £250m credit guarantee for embattled Norwegian Air.