Aug 17, 2020
Ryanair slashes flights, others weigh capacity after virus surge
, Bloomberg News
Ryanair Holdings Plc, Europe’s biggest discount carrier, slashed capacity for September and October after demand weakened, and other carriers are weighing similar cuts following a European surge in new virus cases.
The Irish discount carrier will reduce the number of flights by 20 per cent in the next two months due to uncertainty among travelers driven by a rise in COVID-19 cases in some European Union countries, Ryanair said in a statement on Monday. EasyJet Plc is among airlines considering similar moves, according to people familiar with the matter, who asked not to be named as the discussions are preliminary.
The strategy shift comes less than two weeks after both Ryanair and EasyJet increased flights in response to surge in demand from pent-up holidaymakers freed from lockdowns. But an increase in infection rates in countries such as Spain have prompted the U.K. to reimpose quarantine measures, discouraging people from booking foreign trips.
France and the Netherlands were added to Britain’s quarantine list last week, and carriers are concerned that restrictions will be reimposed on Greece and Turkey amid rising case counts in those countries, said the people. Ireland has similar measures in place, and Ryanair appealed to the government to loosen requirements for countries with a similar or lower rate of COVID-19 infections to itself.
A spokeswoman for EasyJet declined to comment on plans for capacity cuts, though the carrier confirmed the shuttering of three U.K. bases, including two just outside London.
Airlines had hoped to recover a fraction of the usually-lucrative summer season after months of shutdown due to the pandemic. The revenue is crucial for airlines to survive through typically lean winter months.
Ryanair shares fell as much as 5.1 per cent in Dublin, while EasyJet traded 4 per cent lower at 1:50 p.m. in London.
“We think the restrictions will severely dent late-summer travel demand and impact investor sentiment for all the short-haul European airlines,” Citi analyst Mark Manduca wrote in a note to clients Monday.