Further gloom descended on airline stocks after Ryanair said it could cut up to 3,000 jobs.
The Irish budget carrier will kick off a restructuring programme in a bid to survive the coronavirus crisis that could also include staff taking unpaid leave, slashing salaries by 20 per cent and temporarily closing bases at certain airports.
The cuts at Ryanair – which had 17,500 staff last year – come just days after a shock announcement that British Airways-owner IAG would cut 12,000 roles at the UK flag carrier.
Job cuts: Ryanair’s restructuring programme could include staff taking unpaid leave, slashing salaries by 20 per cent and temporarily closing bases at certain airports
Ryanair’s outspoken boss Michael O’Leary also took aim at the £26billion bailout European countries are offering their airlines, which he believes flouts competition rules.
The airline expects to operate less than 1 per cent of its usual flying schedule between April and June, and estimates it might only rise to 50 per cent between July and September, the usual summer holiday peak when airlines rake in most of their cash.
Ryanair’s figures echoed those of Heathrow, which yesterday said passenger numbers using the airport plunged by 97 per cent in April.
Stock Watch – Genedrive
Investors cheered as Genedrive completed its pilot batch of coronavirus testing kits, which it has developed with partner Cytiva.
Having cleared the final manufacturing hurdle, Genedrive is hoping the test will get approval from EU regulators – known as CE marking – in around three weeks’ time.
The test that Manchester-based Genedrive is making would deliver a quick result without needing to be sent to a lab.
Shares surged 24.3 per cent, or 26.5p, to 135.5p.
More than anything, the painful but decisive moves by BA and Ryanair to axe jobs have dashed optimism that there will be a quick rebound for the industry once lockdown restrictions start being lifted.
Ryanair believes it will take until 2022 for demand to get back to 2019 levels.
The increasingly bleak outlook for the sector knocked 6.4 per cent, or 66 cents, off Ryanair shares, taking them to €9.66 by the close.
And the effect was contagious with Easyjet dropping 5.8 per cent, or 35.2p, to 568p and Jet2-owner Dart Group losing 5.3 per cent, or 34p, to 609.5p.
IAG fell 3.1 per cent, or 6.9p, to 215p, despite clinching £965million in help for from the Spanish government for Iberia and Vueling.
London’s two main indexes were also in the red.
The FTSE 100 fell 2.34pc, or 138.15 points, to 5763.06 and the FTSE 250 dropped 1.86 per cent, or 306.12 points, to 16148.34.
The Footsie was dragged lower by a toxic cocktail of bad news, which included data showing that the UK manufacturing sector had fallen to the lowest level on record, and President Trump threatening China with more tariffs because of the pandemic.
It was also knocked by another sharp fall in Shell shares (down 6.7 per cent, or 86.4p, closing at 1200p) after the oil and gas supermajor shocked savers and the City alike when it cut its dividend by two-thirds on Thursday.
It triggered a wave of downgrades by brokers yesterday, with HSBC, Berenberg and Panmure Gordon all lowering their ratings on its stock.
Analysts didn’t take kindly to bakery chain Greggs shares after it ditched a plan to reopen 20 stores in Newcastle next week, saying it was worried it would attract big crowds.
Shares fell 6.4 per cent, or 118p, to 1714p after Peel Hunt brokers downgraded the baker to ‘sell’, saying it was ‘not a good sign’ for when lockdown eases.
‘Queuing at a 2 metres distance outside the store,’ Peel Hunt added, ‘is going to lose its novelty very quickly for even the biggest sausage roll addict.’
Shares in AIM-listed Avacta, however, spiked after it struck a collaboration agreement with American group Adeptrix to develop a coronavirus test.
Chief executive Alastair Smith said the consensus view globally was that ‘hundreds of millions of Covid-19 tests are going to be required per month for a long period, and that the disease will be endemic after the initial pandemic has passed’.
Shares in he pharma firm climbed 14.1 per cent, or 13.5p, to 109p.
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