Airlines around the world are downsizing due to the current pandemic, and Royal Air Maroc is no exception, as reported by Morocco World News. However, there is one aspect of Royal Air Maroc’s plan to shrink that surprises me.
These updates come based on a July 2 meeting between the company’s management, staff representatives, and the National Air Transport Federation (FNTA). The airline has been losing over $100 million per month since the pandemic brought global aviation to a standstill in March.
This was supposed to be an exciting year for Morocco’s flag carrier — the airline has expanded significantly in the past year, and the airline even joined the oneworld alliance this spring.
In this post:
Royal Air Maroc will lay off 30% of employees
Unfortunately Royal Air Maroc plans to lay off 858 employees, which represents 30% of the company’s workforce.
The airline plans to lay off:
- 33% of pilots
- 30% of cabin crew
- 13% of ground personnel
On top of that, the airline plans to offer a voluntary redundancy plan for employees 57 years or older, who have 15 or more years of seniority.
Royal Air Maroc will get rid of 20 planes
Royal Air Maroc currently has a fleet of 59 aircraft, including:
- Six ATR72-600s
- Six 737-700s
- 31 737-800s
- Two 737 MAX 8s
- One 767-300
- Five 787-8s
- Four 787-9s
- Four Embraer 190s
Royal Air Maroc flies four Embraer 190s
The airline plans to get rid of 20 planes as part of this restructuring, including:
- Four Embraer 190s
- Four Boeing 787s
- 12 Boeing 737
For the most part that’s a logical enough way to downsize, including the 737 fleet being reduced, and the Embraer 190 fleet being eliminated. But then there’s the part that’s hard to make sense of…
Royal Air Maroc is getting rid of a dozen 737s
Implications of RAM getting rid of four 787s
The part that’s surprising is that Royal Air Maroc is dumping four Boeing 787s, which represents nearly half of its 787 fleet:
- Royal Air Maroc’s 787s are an average of just 2.8 years old, with all nine planes being delivered between 2016 and 2019
- How exactly does Royal Air Maroc plan on finding a new home for these planes anytime in the near future (and even if they do, the loss will be massive)?
Royal Air Maroc’s 787-8 business class
It’s not known exactly which 787s will be retired:
- One would assume four of the five “older” 787-8s would be retired, as they feature a more outdated business class product
- At the same time, it seems odd to keep just one 787-8, so could it be that the airline is getting rid of all four of its brand new 787-9s, even though they feature a brand new business class product?
Royal Air Maroc’s new 787-9 business class
Presumably this also means that Royal Air Maroc will have to significantly cut back its international network. Up until before the pandemic, Royal Air Maroc intended to fly 787s to:
- Beijing
- Boston
- Doha
- Miami
- New York
- Montreal
- Rio de Janeiro
- Sao Paulo
- Washington
- The airline also sometimes flew 787s to Europe, particularly to Paris
If the airline is getting rid of nearly half of its 787 fleet, we’ll see several of those destinations cut, or at least greatly reduced frequencies:
- The Beijing, Boston, and Miami routes are the three latest routes to be added, so are probably also most likely to be cut first
- I would also imagine we could see 787s taken off Europe rotations
- I think it’s safe to assume Montreal, New York, and Washington would stick
- I haven’t heard much about how the Brazil routes are performing
Bottom line
Like many airlines around the globe, Royal Air Maroc is downsizing significantly, as the airline will lay off 30% of employees and get rid of 20 planes. What surprises me is that the airline is getting rid of four of the nine 787s in its fleet.
These are new planes, and it also means that Royal Air Maroc will have to undo its significant expansion from the past few years. While I can appreciate demand is greatly reduced right now, if and when demand does recover, the airline will probably struggle to add capacity at that point, at least in a cost effective way.
Are you surprised to see RAM planning on getting rid of four 787s?
I suspect main reason they are getting rid of the 787-9s is because they have the best resale value in a depressed aircraft market. They can get a decent return for these almost new planes. Use the cash to get them through the next 12-24 months. The rest of the fleet won’t generate that much cash.
Point of clarification: RAM cancelled a flight, Marrakech-Casablanca two days before scheduled departure and failed to inform the passengers until we showed up at the airport. They had our itinerary and contact numbers. We had to take a taxi to Casablanca to catch our connecting flight to Tangier. Of course the taxi broke down.
Hilarious story now but not so much then. Overall we loved Morocco.
Jon is correct in his analysis regarding the disposal of the 787-9's. Though I would hazard a guess that one of them may be reconfigured as the new Royal/VIP asset.
Personally I do not like RAM due to trip interruptions, flight cancellations-with no prior notice, and "Air Canada kind of crappy" cabin service quality, and poor storefront service (in Rabat).
I do however feel bad for the staff who may lose their jobs.
I had a nice flight on RTW19 2.0 JfK-CMN on the B787-9 with RH seats last May. Very nice flight. After 2 night at Hyatt Regency using CC free night, I flew Etihad B787-9 1st Class (1 of my favorite non-shower First ;-) to Abu Dhabi ! Two separate tickets, but about same miles as direct IAD-AUH 1st which wasn’t available.
One question, can't they like lease their 787s to other airlines? at least they can rake up revenue from these aircraft. And RAM could have a chance of operating repatriation flights to countries like France where they can utilize their 787s? My advise? Retire the 767, lease out the A320s and use the 787s on repatriation flights where they can get a good load.
Maybe they have to do this.
But dumping aircraft in the current market is a sign of desperation. It surely is a buyer's market these days. If anything, with SAA doing poorly, I would have liked to see them double down and make a play for connecting traffic to the Southern Africa market.
This is a real pity. RAM is such a gem of an airline and super handy backdoor points redemption to Europe...
Just to note that the sole remaining 767 has been converted into a freighter (CN-ROW). They are not just keeping a random single passenger variant (although it wouldn't surprise me too much if they had).
I wouldn't be so sure about RAM dropping MIA... In the past they've had (along with TP) some of the best fares from many cities in Europe to MIA in both Y and J. Sure, there are still travel restrictions in place, but one never knows. Additionally, now being OW members they will have plenty of connectivity in MIA.
So sorry to see the reduced lift from the US. AA is not going to start their flight, so US travelers will continue to connect into CMN or RAK. Plus the loss of jobs is a serious issue in Morocco as those jobs are coveted.
I'm sure Tiffany's great review had many readers placing Morocco on their must visit list!
I'm curious if it makes people feel better that they lost massive amounts of money by investing in expansion right before a pandemic rather than in stock buybacks.
Ben,
I wonder why you left the 747 out of the present fleet. AFAIK, It is still there and used rather a lot whenever the demand is there, Haj, holiday periods to/from Paris (ORY), etc...
What seemingly makes no sense is keeping the lone 767 which, in addition, is a wreck inside. It was used on the JFK run before the 787s. and was already looking like it was falling apart. Of course, it MAY...
Ben,
I wonder why you left the 747 out of the present fleet. AFAIK, It is still there and used rather a lot whenever the demand is there, Haj, holiday periods to/from Paris (ORY), etc...
What seemingly makes no sense is keeping the lone 767 which, in addition, is a wreck inside. It was used on the JFK run before the 787s. and was already looking like it was falling apart. Of course, it MAY be refurbished as a Royal VIP transport. Who knows?
Also, one would expect the Embraers to be useful whenever the demand is slacking like now. I flew one several times on the CMN-MAD run several times although the planned aircraft was a 737.
One problem with RAM is the coexistence of the best and the worst, such as the brilliand hub and spokes network to Africa / Europe established years ago at CMN with 737s, then letting it slowly deteriorate.
They're definitely going to get rid of the 787-9's. It's just curious that from an efficiency perspective, they're keeping the most expensive to operate aircraft (ie keeping the single 767? WTF?) They're keeping the ATR72's, which, while inexpensive operationally, are the only props in the fleet?
This is 100% short-term gain over long-term-impact. The aircraft they plan to get rid of are the ones most likely to generate the highest revenue with least impact...
They're definitely going to get rid of the 787-9's. It's just curious that from an efficiency perspective, they're keeping the most expensive to operate aircraft (ie keeping the single 767? WTF?) They're keeping the ATR72's, which, while inexpensive operationally, are the only props in the fleet?
This is 100% short-term gain over long-term-impact. The aircraft they plan to get rid of are the ones most likely to generate the highest revenue with least impact to their existing network. The E190s, 737, and 787 - if sold - will generate the most short-term cash compared to the 767 and ATR72.
I'm going to guess they're thinking that if they can generate enough cash now, they'll accept the hit and then buy new planes 5 years from now when they're bleeding on maintenance with their aging fleet.
Sucks for passengers, but they only just got into OW, and now that they're in, I'm sure they are hoping to benefit from OW feed that they didn't previously have to offset their losses of moving passengers on their own metal. Maybe their thought is that they can let AA/BA/Iberia handle the long-haul while they can focus on intra-Africa connectivity for their new partners. Lower their overall risk...