Dublin, Ireland - Experts predict that the current crisis in air travel and can last up to six months. Despite the additional measures taken, budget carriers seem more vulnerable than full-service airlines since Italy is their biggest market.
The aviation industry is being shaken with grim news every day. Most airlines see drastic declines in bookings and are forced to cancel most of their flights. Some are asking for government help to survive and it’s hard to predict how long will this situation last and what measures are yet to be taken. Airlines seem to be preparing for the worst.
József Váradi, the chief executive of Hungarian low-cost Wizz Air, informs employees that they are expecting an unprecedented downturn in the April-June quarter due to coronavirus pandemic.
Over the next few weeks, the flight schedule may be reduced further by up to 70 percent compared to the original plan,
The airline plans to reduce operations in the next three months by at least 20% and look for further savings in staff dismissal – even the management positions are being reduced.
The airline also attempts to renegotiate contracts with suppliers, extend payment deadlines, and even postpone the delivery of new planes.
But the problems that airlines are dealing with are more complex – current crisis comes in a time of year that brings the most profit. It’s the beginning of the summer flight schedule when many passengers would book their holiday flights to countries currently affected by coronavirus pandemic. It’s clear that some companies will not survive the financial struggle.
That’s why we should look closer at Ryanair’s situation:
This is the list of ENAC, the Italian civil aviation authority, which sorts airlines operating in Italy by the number of passengers transported. This data set shows numbers for 2018 as data for 2019 is not yet available, but it’s easy to see that Ryanair’s situation heavily relies on operations to Italy.In 2018 they carried over 37.8 million passengers not only from and to Italy, but also on many domestic routes.
To put things in perspective: in 2018 Ryanair carried a total of 139.2 million passengers, so Italian market adds up to 27.1% of total passengers carried that year. And even if we’re not sure of exact numbers for 2019, we can assume that Italy was at least as important for Ryanair. What about WizzAir? Data comparison shows that Italian market added up to “only” 14% of passengers.
Ryanair has large cash reserves and thanks to previous changes in structure and employment contracts, it can quickly react to aviation crisis, but it’s currently not clear how big of a financial hit the company is going to take.
Ryanair has announced plans to ground the majority of its aircraft fleet across Europe over the next 7 to 10 days due to covid-19 pandemic.
In a statement, Ryanair said the airline is expecting to reduce its seating capacity by up to 80% and a full grounding of the fleet cannot be ruled out.