Mr. O’Leary has repeatedly expressed his dislike of unions, once saying “hell would freeze over” before he recognized them, but he told the FT he had long anticipated the evolution: “I have two stances: we will ultimately be unionized . . . and I have accepted that as reality, but for as long as we can postpone unionization, we would try to to postpone unionization. The two aren’t contradictory.”
After a rostering debacle last autumn, which led to thousands of cancelled flights and millions in compensation payments, Ryanair agreed to recognize its unions and negotiate collective labour agreements.
However, the process has been rough, with few CLAs secured so far and staff striking on multiple occasions over the summer , sometimes in concert across Europe.
Strikes are not uncommon in aviation — British Airways’ cabin crew staged 85 days of industrial action across 2016-17 — but Ryanair’s are particularly damaging, as the airline is unable or unwilling to take expensive mitigation measures such as hiring replacement aeroplanes with external crews.
Joost van Doesburg of Dutch pilots’ union VNV, said he wanted to warn customers about the true cost of cheap flights: “If you are paying a not realistic amount of money for your tickets, someone else is getting the bill — in this case, the employees.”
Even as he deals with restive pilots, Mr. O’Leary is out shopping for more. The recent failures of several small European airlines helps the industry’s over-capacity and provides hiring amid a global pilot shortage.
“It isn’t going to be pretty this winter and there will be lots of opportunities,” said Mr. O’Leary. Primera, a small Latvian-based carrier, on Monday night failed and on Wednesday Ryanair “had an open day for Primera pilots . . . We interviewed over 100 pilots,” Mr. O’Leary said.
Ryanair’s strength, even if it does accept unions, will be its discipline, said aviation consultant Philipp Goedeking, who has advised 20 airlines on improving their competitiveness and now works with banks on the strategic risks airlines pose for investors.
He praised Ryanair for strictly following its “outrageously successful” strategy with “not an iota of deviation from that course”, for example moving into long-haul flights. When it comes to unionization, Mr Goedeking said, “he will lose that battle . . . but it will not kill Ryanair”.
Whether Ryanair can change under Mr. O’Leary, 57, in part depends on whether he stays at the top: in 2019, his five-year contract comes to an end and he has said he would prefer a rolling annual contract, while the board wants another five-year one. Unions said there was no chance of cultural change while he was still in charge, and analysts said they had seen no evidence of such change so far.
And despite the share price fall, some large shareholders are sticking with Mr. O’Leary.
One top-30 shareholder said that although the strikes had caused a “significant setback” to trust and image caused by the strikes, “the company’s union representatives must understand the company’s business model as it is in no party’s interest to kill the golden goose.”
More from the Financial Times:
Ryanair cancels flights after strike by pilots and cabin crew
New Swiss budget airline launches fundraising
Ryanair cuts profit outlook over strikes and higher oil prices
Be the first to comment