Ryanair Holdings plc (LON:RYA) dropped on Friday after stating that ramping up flights in July will be more difficult due to over €30bn in state aid injected in other airlines, distorting competition.
The low-cost flight operator said this “doping” for flag carriers was in breach of EU rules and it intends to challenge these actions in court, “to protect fair competition in Europe’s aviation market”.
According to media reports, the €10bn bailout being negotiated between Lufthansa and Germany would result in Berlin taking a 25.1% stake in the airline.
To cope with the crisis, the firm has started a restructuring programme that may involve up to 3,000 job cuts as well as unpaid leave, salary cuts of up to 20% and the temporary closures of certain aircraft bases.
Workers’ union Unite said it was “another premature announcement, especially while the government’s job retention scheme remains fully up and running”.
The airline expects to operate less than 1% of its usual flying programme in the quarter to June, rising to potentially 50% in the following three months.
In the year to March 2021, an original 154mln target for passengers carried is expected to plunge to 100mln and Ryanair said it will take until at least summer 2022 to recover passenger and demand to last year’s levels.
Ryanair is also in talks with suppliers to halt aircraft deliveries over the next two years.
“While management is not giving a guidance range, in our view this does point to a full-year loss even if second-half trading were to be normal (which is clearly will not be),” analysts at Liberum commented.
Shares dropped 4% to €9.89 on Friday morning.
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