Ryanair in heavy weather

Michael O'Leary, Ryanair’s flamboyant boss, has scared its employees by announcing that as many as 900 jobs will be cut. The low-cost carrier will lay off 500 of its 5,500 pilots and 400 of its 9,000 cabin staff. In addition, recruitment plans for 600 cabin staff in 2020 have been put on hold. This has to do with the problems of the Boeing 737 MAX.

Profit decline

Ryanair’s post-tax profit declined by almost 30% on an annual basis. The airline blames higher fuel costs and declining fares for its falling profit. Fares are falling due to price competition in several markets. The new UK Prime Minister, Boris Johnson, keeps lying that the Brexit is good for the UK. In reality, British consumers will see their real incomes declining further due to the Brexit.

Boris Johnson

Boris Johnson

Since the Brexit referendum on June 23, 2016, sterling took a nose dive from €1.40 to €1.09. This is a 22% decline. As the UK imports half of its consumption, it is equivalent to a wage cut of 11%. British politicians are too concerned about their own career to tell the voters frankly how disastrous the Brexit is. The British economy and the voters will suffer economic damage only because politicians are hoping for political gain for themselves.

The illusive Brexit

Politicians leave voters under the illusion that the Brexit means taking back control. But reality is that the British already have a lower standard of living even before the Brexit has been realized. Once the Brexit will be a fact, the economic damage will rapidly mount further. The British need to prepare for further impoverishment.

RyanairIn this disastrous economic climate Ryanair will face plenty of problems. Currently, it has 3 domestic routes in the UK. Michael O'Leary is clear what will happen to them after the Brexit: “They would readily fall out straight away.” In addition, the grounding of the Boeing 737 MAX also confronts Ryanair with serious problems. The carrier’s fleet consists of Boeings 737 and it has more than 200 of this plane on order. But they cannot be delivered as long as the plane remains grounded.

Are passengers prepared to fly Boeing 737 MAX?

Another concern is whether passengers still want to in fly this airplane at all. Ryanair seems to feel uneasy about it. It seems to have changed the plane’s model name by replacing the word MAX with the number 8200. Aircraft in Ryanair colors at the Boeing factory near Seattle show the model name as Boeing 737 8200. Ryanair will have to wait and see whether passengers will buy it.

Related: “Will the UK marginalize itself?

Tags: Ryanair, Brexit, Boeing 737 MAX, Boeing 737 8200

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