Ryanair Holdings Plc Chief Executive Officer Michael O’Leary told workers the budget airline needs 1,500 fewer pilots and cabin crew than originally envisaged amid a slump in earnings and delays to expansion plans forced by the grounding of Boeing Co.’s 737 Max jetliner.
In a video message to staff seen by Bloomberg, O’Leary said the carrier has an excess of more than 500 pilots and about 400 flight attendants right now, and on top of that will need around 600 fewer people in those categories by next summer. A spokesman for Ryanair confirmed the video’s authenticity and declined to comment further.
Ryanair posted the video Monday after announcing a 21% drop in quarterly earnings hurt by higher fuel costs, faltering economies and a fare war. In the address, an apologetic O’Leary tells staff that redundancies will be detailed by the end of August once the carrier has engaged with airports and unions, with cuts to be enforced in September and October and again after Christmas.
Shares of Ryanair pared earlier gains of as much as 2.7%, trading 2% higher at 9.67 euros as of 12:28 p.m. in Dublin.
The high number of excess staff is in part due to a reduced level of employee churn, which the CEO described as having “dried up to effectively zero” in the wake of improved pay deals triggered by a unionization drive.
Ryanair indicated on July 16 that it would trim operations, saying it expected to get no more than 30 of the 58 Max jets due from Boeing by next summer. The upgraded version of the 737 workhorse was idled and deliveries halted following two fatal crashes in less than five months.