Ryanair Update

Here we have (as promised) an update on the latest at Ryanair regarding the dispute with their pilot workforce.

Ryanair is emailing passengers impacted by its flights cancellations offering them a £40 voucher towards a future flight. The gesture, which is on top of the EU compensation that passengers are entitled to, comes with ‘deepest apologies’ for the disruption, which Ryanair blamed on a ‘mess up’ over pilots leave. 

But the voucher can only be used for travel from October 1 to March 20 2018, and does not include the popular Christmas or New Year period. Signed by chief executive Michael O’Leary, the email says the airline has set up a separate team to handle EU261 claims. It finishes by saying: “Rest assured there will be no repeat of last week’s roster related flight cancellations.”

The Daily Mail has suggested that Ryanair could become the next Sports Direct. The no-frills carrier and Mike Ashley’s retail chain have much in common, both are run by autocratic founders, and both believe that if you give customers what they want for the cheapest price they will not complain.

Both also have subscribed that as long as you keep on expandingbyadding even more flights or more outlets and brands, then sales and profits will rise and investors will remain on side.

However, in adopting this approach the paper suggests that Ryanair has lost a key ingredient for long term success; work force loyalty. In its latest effort to deal with its pilot capacityproblems, Ryanair is cancelling another 18,000 flights between November and March, affecting 400,000 passengers, partly because it has been unable to persuade its self-employed pilots to fill the gaps like it had hoped to.

The Mail goes on to suggest that if Ryanair were to pay its pilots a fair wage and offer them more time off, then Ryanair would not be facing these current issues. 


Will Ryanair survive this crisis?

BBC News Online has written about the latest problems affecting Ryanair and how that despite their self-proclaimed ‘mess up’ Ryanair will remain largely unaffected long-term. The shareholders that the reporter spoke to that there was no issue with O’leary’s leadership claiming that Michael O’Leary is not some easy come, easy go, hired-gun chief executive. 

Although the airline was founded by Tony Ryan it became the biggest carrier of passengers in Europe under Mr O’Leary. He owns four per cent of the company and has survived worse publicity than this. The BBC then goes on to suggest that higher pilots’ wages will not change the economics of Ryanair.

All airlines try and bear down on cost as it is a competitive business, but the things that really affect profits are external factors like the world economy and the price of fuel. Both of those things are in the industry’s favourright now. When this current issue passes, consumers will return to looking at which airline can get them where they are going, at the price they want to pay. 

Passengers were met with silence from Ryanair last week as the budget airline was flooded with tens of thousands of complaints over its handling of the flight cancellation fiasco. Travellers caught up in the chaos, said that they were unable to contact Ryanair for refunds despite spending hundreds of pounds on flights with other airlines.

Ryanair cancelled 18,000 flights between November and the end of March, affecting 400,000 passengers on top of the 315,000 passengers already hit by cancellations in September and October.

The airline was told yesterday that it faced legal action by the Civil Aviation Authority (CAA) for misleading passengers. This included failing to tell them they were eligible to use a rival airline free of charge and receive expenses for hotels, meals and transfer costs. Last week, the CAA sent a new letter to Ryanair ordering it to contact once again the passengers affected by the first round of cancellations after they were ‘misled’ over the possibility of being rerouted with another airline. Independent Online comments that this will likely add around £20m to the ‘steadily rising bill for the mother of all airline-management muddles’. 

Ryanair braced for €100m annual bill for pilot pay rises 
Ryanair will be hit with up to €100m in higher annual pilot costs as the airline looks to recover from the rostering crisis that led to the cancellation of 20,000 flights.

In first-half results Ryanair said pay rises to pilots would add €45m to crew costs in the current fiscal year and €100m in the following full-year. Ryanair also warned of lower passenger growth next year. 

Ryanair rota fiasco and cancellation crisis fail to dent profit drive  

Ryanair is on course for record annual profits despite a rota fiasco that led to pilot shortages and the cancellation of thousands of flights. The Dublin-based airline said it had responded swiftly to the crisis which could cost up to €50m and add about €100m to its annual wage bill after the rostering failure forced it to address a dispute with pilots over pay and working conditions. 

Profits after tax rose 11 per cent to €1.29bn in the six months to September 30. The chief executive, Michael O’Leary, said it was still targeting a range of €1.4bn to €1.45bn for the full year. Shares rose four per cent. 

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