Ryanair dispute over pilots’ representation risks ‘nasty’ ascent

Ryanair pilots are heading for their first ever strike within the next few days in what could turn into a battle of wills between them and the airline's chief executive Michael O'Leary, whose company accuses trade unions of orchestrating the dispute.

The crux of the row is representation. Pilots want a new system to replace the employee representative councils that negotiate for staff at each of the airline's 80-plus bases across Europe. But Ryanair refuses to deal with the European Employee Representative Council (EERC) that pilots want to act on their behalf. The airline argues that its existing structure is already a fair collective bargaining system and that it has the Supreme Court's approval.

European pilots’ unions support the EERC and most of them wrote to O’Leary recently urging him and Ryanair to begin talks with the new council. When the airline did not respond, union members within the company warned that they would take industrial action.

They then took whatever legal steps were necessary to allow this. In the case of the Republic, they balloted on a proposal for industrial action, up to and including strike, and then served notice on the company. As a result, about 117 pilots, mainly directly employed captains, are planning to strike at Dublin, Cork and Shannon airports on Wednesday.

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Their Portuguese counterparts are also due to strike that day. A group in Italy may stop work for four hours on Friday while possibly all those in Germany could strike at any time. Sources suggest that the Swedish union may shortly join the movement and that the British Airline Pilots' Association (Balpa) will follow.

Aviation professionals say that bookings dip immediately once news of an impending strike at an airline breaks

Assuming that some – or all – of the strikes go ahead, it is still hard to predict what impact they will have. Ryanair’s statement on Tuesday said that the planned action in the Republic involved just 28 per cent of pilots at Dublin Airport, its biggest base, and may cause some disruption. A spokesman subsequently said that it would publish details of plans to minimise disruptions on Monday, December 18th.

Impact spokesman Niall Shanahan and other union figures acknowledged during the week that the airline could have the resources to minimise the strike's impact. Analyst David Holohan, chief investment officer at Dublin broker Merrion Capital, also believes that Ryanair is likely to have a contingency plan.

Maximising ‘consternation’

“From the pilots’ perspective, they are looking to select the date would cause the most consternation,” he says, “but the airline is likely to be prepared.”

At this stage, it looks like industrial action could have most impact in Germany. The union there, VC, estimates that it has recruited more than half the 390 pilots Ryanair employs in the country. According to its director of international affairs, James Phillips, local laws allow non-union members to participate in strikes, potentially opening action up to at least some of the half that are not in the organisation.

Beyond ruling out action between December 23rd and December 26th, VC has not said when it will strike. It has fulfilled whatever procedures it needs to take action and thus members can down tools after giving 12-24 hours’ notice to Ryanair. The union is likely to time its stoppage to ensure that it coincides with, or happens close to, the Irish strike.

If Ryanair has to cancel flights, it will have to refund passengers or offer them an alternative, which will mean extra costs. The impact on bookings will be harder to assess. “Typically people travelling at this time of year book well in advance,” Holohan points out, but he agrees that forward ticket sales are a different matter.

Aviation professionals say that bookings dip immediately once news of an impending strike at an airline breaks. “You can actually see the needle move once it happens,” says one source. Holohan suggests that any impact on forward bookings will not become obvious until the new year, if at all.

'When profits are high, unions tend to negotiate very good contracts, when those profits erode, unions tend to give very little back,' Holohan says

If Ryanair succeeds in countering all, or even most, of the disruption caused by any strikes, it will get that message to the travelling public. Passenger figures showing growth in the weeks after it announced cancellations in September show how it can absorb the shock of most crises.

That may be harder to do if the unions sustain their action over the coming months. When news of the Irish strike ballot broke last week, sources suggested that pilots across Europe wanted to target peak travel times during the summer, indicating they could be in it for the long haul.

Further disputes

Impact has already said that Wednesday’s strike may only be the first. Statements issued by both it and the airline show the potential for further disputes. In its notice, the union warns that taking any disciplinary action against members, or reducing their pay, would be grounds for strike.

Ryanair’s response says that pilots taking part will be in breach of the Dublin base agreement. As a result, they will lose benefits such as their five-days-on, four-days-off roster and certain pay and promotion opportunities. Shanahan agreed that Impact could regard such steps as sanctions but would not speculate on what was likely to happen should Ryanair take them. Nevertheless, the space for the row to escalate is clear.

John Geary, professor of industrial relations and human resources at UCD School of Business, argues that the unions face a long battle if they want to achieve their aim. "If it's going to be successful it's going to have to be a co-ordinated campaign right across the major bases, I mean places like Ireland, the UK and Germany," he says.

Whether that campaign is successful is another matter. “I just cannot see Michael O’Leary running a unionised airline,” says Holohan. He suggests that the Ryanair boss dislikes unions because they have the potential to raise costs over the longer term, threatening his company’s ability to offer cheap air fares and generate profits. “When profits are high, unions tend to negotiate very good contracts, when those profits erode, unions tend to give very little back,” Holohan says.

Geary agrees that O’Leary will oppose what he sees as any union attempt to get a foothold in Ryanair. “This is going to be a sheer trial of strength,” he says, “and it’s going to get nasty”.