Ryanair warns on profits and jobs

As a result of recent walkouts by pilots and cabin crew, the Irish airline has cut its annual net profit forecast by 12 percent, saying it now expected the figure to come in between €1.1 billion ($1.28 billion) and €1.2 billion, compared with its prior estimate of €1.25 billion to €1.35 billion.     

Moreover, Ryanair announced it would leave eight aircraft on the tarmac as of November 5 — equivalent to a 1.0-percent reduction in its winter capacity. At its Eindhoven, Netherlands, base all four aircraft would be grounded, as well as its two planes stationed in Bremen, Germany. In addition, two out of five aircraft would be removed from its base in Niederrhein, also in Germany.

"We will now consult with our pilots and cabin crew at these three bases to minimize job losses," Ryanair said in a statement on Monday.

The affected staff would be offered vacancies at other Ryanair bases, and unpaid leave would be introduced to "minimize cabin crew job losses" amid a "large surplus" of crew during the winter schedule.

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The profit warnings come three days after cabin crew and some Ryanair pilots walked out in Germany, Belgium, Italy, the Netherlands, Portugal and Spain.

Tit-for-tat?

After Ryanair recognized labor unions for the first time in December, workers have been seeking higher wages and an end to the practice whereby many are being employed as independent contractors without the full benefits of staff employees.

"Two recent coordinated strikes by cabin crew and pilots across five EU countries have affected passenger numbers, close in bookings and yields, and forward air fares into Q3," Ryanair chief executive Michael O'Leary said in a statement.

Ryanair fares in its second quarter to end-September have fallen by around 3 percent, compared with its previous forecast for a drop of 1 percent. In the second half of 2018, the airline expects fares to be 2 percent lower.

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"Customer confidence, forward bookings and Q3 fares have been affected, most notably over the October school mid-terms and Christmas," O'Leary noted.

The airline also said it wouldn't rule out further disruptions in the coming months, possibly requiring another downward revision of full-year forecasts and further cuts to its loss-making winter capacity.

While Ryanair has struck some deals with unions — last week, for example, with cabin crew unions in Italy, who can now enjoy employment contracts under Italian law — it has yet to reach agreement in other countries.

uhe/aos (Reuters, AFP, dpa)