Ryanair Labor Woes Deepen as U.K. Pilots Vote for Summer Strike
Ryanair Braces for Outcome of Vote on Possible Pilot Strike
(Bloomberg) --
Ryanair Holdings Plc’s struggle to keep a lid on Europe-wide wage claims deepened after U.K. pilots voted to strike in a dispute over pay.
Members of the British Airlines Pilots Association will walk out for two days from Aug. 22, followed by a three-day action in September. Four-fifths of votes backed a strike on a 72% turnout, according to the union, though Ryanair said the numbers represent a minority of its U.K. crews.
Sanford C. Bernstein analyst Daniel Roeska said in a note he expects the strike to go ahead and that the U.K. vote may encourage other pilot groups to follow in Balpa’s footsteps. The walkout may be “more impactful than any other the company has weathered,” he said, though the actual hit on profit depends on whether there’s a prolonged walkout and if the carrier is required to pay compensation that can amount to hundreds of euros per passenger.
Ryanair is under pressure across Europe after a rostering foul-up two years ago increased staff bargaining power and forced Chief Executive Officer Michael O’Leary to recognize labor groups. Results from a ballot of pilots in Ireland are due Friday, while Portuguese cabin-crew plan a five-day strike from Aug. 21 and staff in the Canary Islands say they’ll walk out over base closures. Workers at Austrian arm Laudamotion are consulting on threats of layoffs if they reject cost cuts and roster changes.
Spoil Plans
“We have had no formal offer from Ryanair and it is imperative that we resolve this dispute urgently to avoid strike action,” Balpa General Secretary Brian Strutton said in a statement Wednesday. “No pilot wants to spoil the public’s travel plans but at the moment it seems we have no choice.”
Ryanair shares traded 0.6% higher at 9.44 euros as of 10:51 a.m. in Dublin after earlier falling 1.2%. The stock has declined 12% this year after slumping close to 30% in 2018 following widespread labor unrest as initial union accords were thrashed out.
The U.K. result comes less than two weeks after O’Leary released a staff video saying Ryanair would need to cut hundreds of pilot and flight attendant posts as the grounding of Boeing Co.’s 737 Max jetliner stymies expansion plans -- a development that has further heightened labor tensions.
Responding to the union vote, the airline said that the strike only has minority support among its U.K. pilots since less than half of them are in Balpa.
“Over 70% of Ryanair’s U.K. pilots are either not members of Balpa, or did not vote in Balpa’s ballot, or voted against industrial action,” the company said in an email. “Balpa have no mandate to disrupt our customers’ holidays and flights, particularly at a time when U.K. pilots are facing job losses due to the Boeing Max delivery delays, and the threat of a no-deal Brexit.”
U.K. crews agreed a 20% salary increase in 2018, according to Ryanair, with senior captains earning up to 180,000 pounds ($219,000) a year, more than their peers at Jet2 Airways and the British arm of Norwegian Air Shuttle ASA, where it said Balpa is seeking smaller settlements.
Ryanair has said it regards strikes as extraordinary events that don’t require compensating passengers for canceled flights, though the U.K. government has indicated it expects payments to be made. Liability may need to be decided by the courts, Roeska said, adding that the airline could also be hurt by customer attrition if the protest drags on into the fall.
Union recognition agreements are in place with cockpit crew, attendants and ground workers across most of the carrier’s markets, but finalizing pay terms has been problematic as O’Leary seeks to maintain a cost advantage over rivals, with workers accusing him of refusing to engage in negotiations.
--With assistance from Boris Groendahl, Henrique Almeida and Irene García Pérez.
To contact the reporters on this story: Christopher Jasper in London at cjasper@bloomberg.net;Benjamin Katz in London at bkatz38@bloomberg.net
To contact the editors responsible for this story: Tara Patel at tpatel2@bloomberg.net, John Bowker
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