Ryanair Pilots Get Paternity Leave in Carrier's First Labor Pact

(Bloomberg) -- Ryanair Holdings Plc signed its first-ever union contract, granting Italian pilots perks such as severance pay and parental leave in a deal the airline hopes to repeat across its network to quell a protracted labor dispute.

The agreement also commits Ryanair to making contributions to national health care and social-security funds, the Italian pilots union ANPAC said Tuesday in a statement. A “wide majority” backed the agreement after eight months of negotiations, it said.

Winning over Italian pilots should bolster Ryanair’s hopes ahead of similar negotiations with unions elsewhere in Europe, and limits the extent of any future industrial action that has already led to more than a thousand cancellations this summer. A similar so-called collective labor agreement has been put to flight-deck crew in Ireland for approval after a breakthrough in negotiations last week.

“We welcome this first CLA with our Italian pilots and hope that it will be shortly followed by a similar agreement covering our Irish pilots,” Ryanair Chief People Officer Eddie Wilson said in a separate statement. “We have invited our U.K., German and Spanish unions to meet with us in the coming days.”

Ryanair shares jumped as much as 2.1 percent, and were trading up 2 percent at 14.34 euros as of 12:36 p.m. in Dublin.

The stock has declined 4.8 percent this year after Chief Executive Officer Michael O’Leary, who once vowed never to recognize unions, reversed course in December. The ensuing skirmishes with pilots and cabin crews demanding better pay and working conditions have disrupted schedules and angered customers, while threatening Ryanair’s industry-leading efficiency.

Italy accounts for 20 percent of Ryanair’s fleet and cockpit crew. Pilots there ratified a CLA signed by the union on Aug. 9, including paternity and maternity leave, to become the first group to finalize a contract. Last week, the Dublin-based airline reached the mediated deal with Irish pilots, the group that led a year-long unionization push.

Crews in countries including Ireland, Germany, Belgium, Sweden and the Netherlands last walked off on Aug. 10, disrupting hundreds of flights. Ryanair earnings dropped 20 percent in the quarter through June and passenger growth last month subsided to the slowest this year.

©2018 Bloomberg L.P.