Ryanair is warning that "radical action" is required at Buzz and says it will unveil its plans for its ailing subsidiary later this week.
A spokeswoman said yesterday that the threat of an impending war in Iraq had escalated the crisis but refused to comment on reports that it had cancelled Buzz flights for April.
Ryanair bought the Stansted-based Buzz from KLM Royal Dutch Airlines in January for €5 million and has threatened to shut it down if staff did not agree to a restructuring.
"The situation is getting worse. The airline is presently losing over €1 million a week and radical action is needed as the crisis is being compounded by the prospect of imminent war in Iraq," said the spokesman.
"Ryanair has estimated Buzz's losses for the year to the end of March 2003 at €30 million, and forecast it would turn a pre-tax profit of €10 million in 2003 and 2004," she added
The British Air Line Pilots Association (BALPA) said Buzz pilots planned to meet on March 9th and 10th to discuss the situation. "We just don't know what's going on up there," a BALPA spokesman said.
Media reports at the weekend said the airline was looking to cut up to 400 of the 600 jobs at the airline. Around 100 redundancies were agreed at the time of the takeover deal.
A spokesman for the GMB union said it had been told 400 Buzz jobs would be axed when Ryanair takes over on April 1st.
Among those set to lose their jobs were 25 per cent of the Stansted-based carrier's pilots, 80 per cent of the cabin crews and half the ground services staff, the GMB said.
Referring to market rumours that flights would be cancelled in April, BNP Paribas analyst Mr Nick van den Brul said it was better for Ryanair to lose a month of revenues by refunding Buzz customers for cancelled flights to help with a quick restructure.
"Fine, they lose a good month, maybe €10 million plus, of revenue but, on the other hand, there's no point in having that revenue if it's at the cost of profits," Mr van den Brul said.
Shares in Ryanair closed down 4.6 per cent at €6.20 but analysts attributed the drop to a global slide in airline shares as rattled investors worried over the rising prospects of conflict in the Gulf and after North Korea test-fired a missile.
Yesterday the airline announced that it was adding a third Boeing 737-200 series aircraft to its Glasgow-Prestwick base and will introduce a new direct daily service to Barcelona-Girona in Spain.
