Small Pilot
26th Feb 2003, 09:15
Ryanair Press release..........
.
Ryanair Holdings PLC
26 February 2003
THIS ANNOUNCEMENT IS SUBJECT IN ITS ENTIRITY TO THE PROPOSED SALE OF BUZZ BY KLM
TO RYANAIR PROCEEDING AS PLANNED ON 1 APRIL 2003,
WHICH REMAINS SUBJECT TO REGULATORY APPROVALS
MAJOR RESTRUCTURING OF BUZZ TO ELIMINATE ANNUAL LOSSES OF e30 MILLION AND SECURE
ITS FUTURE.
Buzz and Ryanair, which recently agreed to purchase Buzz, Europe's No.3 low
fares airline, from KLM, today (26th February 2003) announced the details of a
major reorganisation with effect from 1st April 2003 (subject to the acquisition
receiving regulatory approvals by that date.)These plans will be presented to
the creditors and staff of Buzz over the coming days, after which a final
decision will be taken on whether to restart flying as planned on 1 May 2003, or
close Buzz altogether. The main features of the restructuring are as follows;
- Buzz flights to be grounded for the month of April 2003, at least.
- 12 Buzz routes to be terminated on 31 March.
- 12 Buzz routes will continue from 1 May, with increased frequencies.
- Buzz fleet reduced from 12 to 8 aircraft (six x 737's and two x BAe146's).
- Fares on all continuing Buzz routes to be 50% lower, with double the seat
capacity.
- Up to 400 redundancies in Buzz post grounding on 31 March.
- Increased pay and productivity allowances for Buzz remaining 200 staff.
Background to the restructuring
The financial position of Buzz is extremely precarious. The airline suffers from
a number of terminal structural problems including an inappropriate, mixed
aircraft fleet, a poor schedule with infrequent (often less than daily)
services, with fares that are too high to fill its flights (the January load
factor was just 48%). The airline, as a by-product of its history as Air UK is
heavily overstaffed. Buzz carries less than 3,000 passengers per employee
compared to Ryanair's figure of almost 10,000 passengers per employee.
What makes the Buzz business even more precarious is the ongoing haemorrhage of
losses. In each of the past two years Buzz as a stand alone airline has lost in
excess of e30m per annum, and is presently losing over e 1 Million per week. The
imminent threat of war in Iraq, the downturn in European economies and
increasing intense competition from other low fare airlines in the German and
French markets means that Buzz is currently losing in excess of e1m per week.
These losses cannot be sustained.
Grounding of the airline for the month of April.
Whilst the sale of Buzz is still subject to regulatory approvals, it is intended
that if the take-over is completed on 1 April, the airline's fleet will be
grounded for a minimum period of four weeks. This period will allow Buzz to
effect up to 400 redundancies, while at the same time offering improved pay and
productivity incentives to the remaining 200 or so staff who will be needed to
operate Buzz's reduced fleet. This period will also be used for rebranding of
the Buzz aircraft and airport facilities in Ryanair livery, to provide refunds
for passengers on terminated flights, and allow sufficient time for the
retraining of all Buzz personnel and agents, in Ryanair policies and procedures
both on board the aircraft, and at the relevant airports. Subject to receiving
early agreement from the remaining Buzz staff, the airline will recommence
flying on 1 May next, with a substantially increased schedule on 12 of Buzz's
most popular routes with fares that will start at 50% lower than the fares
currently offered by Buzz.
Buzz management will be briefing all staff this week that if agreement is not
forthcoming within two weeks from the remaining 200 staff who will be offered
continued employment in Buzz, then Buzz will be closed on April 1, 2003. In
these circumstances Ryanair would take over the operation and flying of these
routes from 1 May next. However, Buzz believes that this will not be necessary,
as staff will be delighted with the better terms and conditions and increased
pay which they will be offered by Buzz from 1 April 2003.
Twelve Buzz routes to enjoy double the frequencies at half the fares.
One of the major contributors to Buzz's current losses is the fact that many of
Buzz's routes are served inadequately, either once a day (when they should be
twice or three times daily) or just three or four times weekly when they should
at least be daily. In addition Buzz will be operating almost all Boeing 737
aircraft on many of these routes which will ensure that seat capacity increases
by at least 100% for Summer 2003 over the capacity offered by Buzz in Summer
2002.
Passengers who presently have bookings on flights after 1st April 2003 will be
offered a full refund of their fare. Passengers will then be able to rebook
themselves with new tickets, at lower prices FROM 12th March 2003, on existing
or alternative destinations.
Increased Buzz Schedule on 12 routes
Route: Old Frequency New Frequency (New Airport)
Germany Frankfurt 3 x day 6 x day(Hahn)
Berlin 3 x day 3 x day
Dusseldorf 3 x day 3 x day(Niederrhein)
France
Bordeaux 1 x day 2 x day
Toulouse 1 x day 2 x day(Carcassonne)
Grenoble 1 x day 1 x day
Brest 4 x week 1 x day
La Rochelle 4 x week 1 x day
Poitiers 3 x week 1 x day
Limoges 3 x week 1 x day
Spain Murcia 1 x day 2 x day
Jerez 1 x week 2 x week
* These routes will, subject to resolution of staff issues, by available for
sale on www.ryanair.com from Wednesday 12th March 2003.
Termination of twelve underserved Buzz routes on 31 March next
A total of twelve routes which are presently underserved by Buzz will be
discontinued from 31 March 2003. These are routes that are not currently served
on a daily basis by Buzz, and as a result the schedule frequency is insufficient
to sustain profitability. Buzz will continue discussions with these airports
over the coming months and our objective will be to secure a low cost base and
efficient facilities, which will enable Buzz to offer at least daily or double
daily services at very low fares to those markets as soon as additional aircraft
are required.
Buzz routes to be terminated on 31 March *
Route Old Frequency Alternative Available
Paris CDG 4 x day Terminated
Amsterdam 4 x day Terminated
Marseilles 1 x day Nimes (2 x day)
Toulon 4 x week Nimes (2 x day)
Tours 4 x week Poitiers (1 x day)
Bergerac 4 x week Bordeaux (2 x day)
Caen 3 x week Dinard (1 x day)
Dijon 3 x week Terminated
Geneva 2 x week Grenoble (1 x day)
Chambery 1 x week Grenoble (1 x day)
Brest - Marseilles 1 x day Terminated
Almeira 3 x week Murcia ( 2 x day)
Fares on all Buzz routes to be 50% lower
The really good news for Buzz customers and consumers generally, is that Buzz
will be reducing air fares by 50% on all of the 12 routes which will continue to
operate from 1 May 2003. Full details of these new routes and lower fares will
be available at www.ryanair.com. These flights and fares will go on sale,
subject to resolution of all staff issues, on Wednesday 12th March 2003 at
www.ryanair.com.
Since Buzz will now be offering more than double the seat capacity on each of
these routes to Spain, Germany and France, up to 4 million passengers per annum
will now be enjoying fares that are 50% lower than the fares being charged
currently by Buzz. Buzz is confident that these seats will sell incredibly
quickly, and that load factors and passenger traffic will mushroom in Buzz as a
result of these significantly lower fares.
Buzz fares to be reduced by 50%
Route Current Buzz Fare New Lowest Fare
Frankfurt
£34 £19.99
Berlin
£52 £19.99
Dusseldorf
£21 £ 9.99
Bordeaux
£42 £19.99
Toulouse
£42 £19.99
Grenoble
£41 £19.99
Brest
£34 £19.99
La Rochelle
£54 £29.99
Poitiers
£54 £29.99
Limoges
£52 £29.99
Murcia
£85 £39.99
Jerez
£75 £39.99
* These routes will, subject to resolution of staff issues, be available
for sale on www.Ryanair.com from Wednesday 12th March 2003.
Up to 400 Redundancies in Buzz
The one unfortunate feature of this reorganisation is the substantial number of
redundancies which will be necessary. Up to 400 positions will be made
redundant, and these will include in the main Head Office, sales and
administrative staff, approximately 25% of pilots, up to 80% of cabin crew (as
it is
.
Ryanair Holdings PLC
26 February 2003
THIS ANNOUNCEMENT IS SUBJECT IN ITS ENTIRITY TO THE PROPOSED SALE OF BUZZ BY KLM
TO RYANAIR PROCEEDING AS PLANNED ON 1 APRIL 2003,
WHICH REMAINS SUBJECT TO REGULATORY APPROVALS
MAJOR RESTRUCTURING OF BUZZ TO ELIMINATE ANNUAL LOSSES OF e30 MILLION AND SECURE
ITS FUTURE.
Buzz and Ryanair, which recently agreed to purchase Buzz, Europe's No.3 low
fares airline, from KLM, today (26th February 2003) announced the details of a
major reorganisation with effect from 1st April 2003 (subject to the acquisition
receiving regulatory approvals by that date.)These plans will be presented to
the creditors and staff of Buzz over the coming days, after which a final
decision will be taken on whether to restart flying as planned on 1 May 2003, or
close Buzz altogether. The main features of the restructuring are as follows;
- Buzz flights to be grounded for the month of April 2003, at least.
- 12 Buzz routes to be terminated on 31 March.
- 12 Buzz routes will continue from 1 May, with increased frequencies.
- Buzz fleet reduced from 12 to 8 aircraft (six x 737's and two x BAe146's).
- Fares on all continuing Buzz routes to be 50% lower, with double the seat
capacity.
- Up to 400 redundancies in Buzz post grounding on 31 March.
- Increased pay and productivity allowances for Buzz remaining 200 staff.
Background to the restructuring
The financial position of Buzz is extremely precarious. The airline suffers from
a number of terminal structural problems including an inappropriate, mixed
aircraft fleet, a poor schedule with infrequent (often less than daily)
services, with fares that are too high to fill its flights (the January load
factor was just 48%). The airline, as a by-product of its history as Air UK is
heavily overstaffed. Buzz carries less than 3,000 passengers per employee
compared to Ryanair's figure of almost 10,000 passengers per employee.
What makes the Buzz business even more precarious is the ongoing haemorrhage of
losses. In each of the past two years Buzz as a stand alone airline has lost in
excess of e30m per annum, and is presently losing over e 1 Million per week. The
imminent threat of war in Iraq, the downturn in European economies and
increasing intense competition from other low fare airlines in the German and
French markets means that Buzz is currently losing in excess of e1m per week.
These losses cannot be sustained.
Grounding of the airline for the month of April.
Whilst the sale of Buzz is still subject to regulatory approvals, it is intended
that if the take-over is completed on 1 April, the airline's fleet will be
grounded for a minimum period of four weeks. This period will allow Buzz to
effect up to 400 redundancies, while at the same time offering improved pay and
productivity incentives to the remaining 200 or so staff who will be needed to
operate Buzz's reduced fleet. This period will also be used for rebranding of
the Buzz aircraft and airport facilities in Ryanair livery, to provide refunds
for passengers on terminated flights, and allow sufficient time for the
retraining of all Buzz personnel and agents, in Ryanair policies and procedures
both on board the aircraft, and at the relevant airports. Subject to receiving
early agreement from the remaining Buzz staff, the airline will recommence
flying on 1 May next, with a substantially increased schedule on 12 of Buzz's
most popular routes with fares that will start at 50% lower than the fares
currently offered by Buzz.
Buzz management will be briefing all staff this week that if agreement is not
forthcoming within two weeks from the remaining 200 staff who will be offered
continued employment in Buzz, then Buzz will be closed on April 1, 2003. In
these circumstances Ryanair would take over the operation and flying of these
routes from 1 May next. However, Buzz believes that this will not be necessary,
as staff will be delighted with the better terms and conditions and increased
pay which they will be offered by Buzz from 1 April 2003.
Twelve Buzz routes to enjoy double the frequencies at half the fares.
One of the major contributors to Buzz's current losses is the fact that many of
Buzz's routes are served inadequately, either once a day (when they should be
twice or three times daily) or just three or four times weekly when they should
at least be daily. In addition Buzz will be operating almost all Boeing 737
aircraft on many of these routes which will ensure that seat capacity increases
by at least 100% for Summer 2003 over the capacity offered by Buzz in Summer
2002.
Passengers who presently have bookings on flights after 1st April 2003 will be
offered a full refund of their fare. Passengers will then be able to rebook
themselves with new tickets, at lower prices FROM 12th March 2003, on existing
or alternative destinations.
Increased Buzz Schedule on 12 routes
Route: Old Frequency New Frequency (New Airport)
Germany Frankfurt 3 x day 6 x day(Hahn)
Berlin 3 x day 3 x day
Dusseldorf 3 x day 3 x day(Niederrhein)
France
Bordeaux 1 x day 2 x day
Toulouse 1 x day 2 x day(Carcassonne)
Grenoble 1 x day 1 x day
Brest 4 x week 1 x day
La Rochelle 4 x week 1 x day
Poitiers 3 x week 1 x day
Limoges 3 x week 1 x day
Spain Murcia 1 x day 2 x day
Jerez 1 x week 2 x week
* These routes will, subject to resolution of staff issues, by available for
sale on www.ryanair.com from Wednesday 12th March 2003.
Termination of twelve underserved Buzz routes on 31 March next
A total of twelve routes which are presently underserved by Buzz will be
discontinued from 31 March 2003. These are routes that are not currently served
on a daily basis by Buzz, and as a result the schedule frequency is insufficient
to sustain profitability. Buzz will continue discussions with these airports
over the coming months and our objective will be to secure a low cost base and
efficient facilities, which will enable Buzz to offer at least daily or double
daily services at very low fares to those markets as soon as additional aircraft
are required.
Buzz routes to be terminated on 31 March *
Route Old Frequency Alternative Available
Paris CDG 4 x day Terminated
Amsterdam 4 x day Terminated
Marseilles 1 x day Nimes (2 x day)
Toulon 4 x week Nimes (2 x day)
Tours 4 x week Poitiers (1 x day)
Bergerac 4 x week Bordeaux (2 x day)
Caen 3 x week Dinard (1 x day)
Dijon 3 x week Terminated
Geneva 2 x week Grenoble (1 x day)
Chambery 1 x week Grenoble (1 x day)
Brest - Marseilles 1 x day Terminated
Almeira 3 x week Murcia ( 2 x day)
Fares on all Buzz routes to be 50% lower
The really good news for Buzz customers and consumers generally, is that Buzz
will be reducing air fares by 50% on all of the 12 routes which will continue to
operate from 1 May 2003. Full details of these new routes and lower fares will
be available at www.ryanair.com. These flights and fares will go on sale,
subject to resolution of all staff issues, on Wednesday 12th March 2003 at
www.ryanair.com.
Since Buzz will now be offering more than double the seat capacity on each of
these routes to Spain, Germany and France, up to 4 million passengers per annum
will now be enjoying fares that are 50% lower than the fares being charged
currently by Buzz. Buzz is confident that these seats will sell incredibly
quickly, and that load factors and passenger traffic will mushroom in Buzz as a
result of these significantly lower fares.
Buzz fares to be reduced by 50%
Route Current Buzz Fare New Lowest Fare
Frankfurt
£34 £19.99
Berlin
£52 £19.99
Dusseldorf
£21 £ 9.99
Bordeaux
£42 £19.99
Toulouse
£42 £19.99
Grenoble
£41 £19.99
Brest
£34 £19.99
La Rochelle
£54 £29.99
Poitiers
£54 £29.99
Limoges
£52 £29.99
Murcia
£85 £39.99
Jerez
£75 £39.99
* These routes will, subject to resolution of staff issues, be available
for sale on www.Ryanair.com from Wednesday 12th March 2003.
Up to 400 Redundancies in Buzz
The one unfortunate feature of this reorganisation is the substantial number of
redundancies which will be necessary. Up to 400 positions will be made
redundant, and these will include in the main Head Office, sales and
administrative staff, approximately 25% of pilots, up to 80% of cabin crew (as
it is