Markets

Ryanair Staff Agrees to Pay Cut Decision to Limit Job Losses

Per a Reuters report, European low-cost carrier Ryanair Holdings RYAAY will trim its workforce less than the original estimate of 3,000. This favorable development followed the decision of 97% of its pilots and more than 90% of its cabin crew to accept pay cuts as the coronavirus continues to ravage the airline by reducing air-travel demand significantly.

Notably, management had already warned of taking a stern action by removing one in five of its pilots and the cabin crew if they disagree to take lower remuneration by up to 20% under the current scenario. Recognizing the gravity of this situation, most pilots and the cabin staff have so far signed deals pertaining to salary cuts and work practice changes.

In his reaction, Ryanair’s director of operations, Neal McMahon said: "We haven't finalised the number yet, we originally said there was going to be 3,000 redundancies but we have been able to reduce that significantly.”

The actual extent of job cuts at the currently Zacks Rank #3 (Hold) Ryanair, however, depends on the booking scenario for the upcoming season apart from the degree to which the ongoing global health peril disrupts air travel in 2021. Other European carriers like easyJet also cautioned against of job losses as air-travel continues to be adversely impacted by the pandemic crisis. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Moving across to the United States, the financial aid under the CARES act protects jobs at the airlines only through Sep 30, 2020. However, many U.S. carriers like Delta Air Lines DAL, American Airlines AAL and United Airlines UAL alerted employees to the possibilities of lay-offs post the above date as the companies are grappled with the problem of overstaffing due to depressed revenues.

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