Ryanair seeks tax law changes to deal with industrial relations issue

Ryanair is lobbying for a change to Irish tax laws to allow it tackle a crunch industrial relations issue at the airline, according to its chief executive, Michael O'Leary.

The carrier’s practice of employing pilots and cabin crew in other European countries on Irish contracts has been a flashpoint between Ryanair and pilot and cabin crew unions.

Pilot unions such as Germany’s Vereinegung Cockpit (VC) and Dutch Alpa raised this issue during recent strikes at the airline.

Mr O’Leary told its annual general meeting on Thursday that the Republic’s tax law required Ryanair to use Irish contracts, as staff worked on aircraft registered here and operated by a company based here.

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Afterwards he confirmed that the airline had been lobbying the Government to change the law to allow the airline employ pilots and crew in other European countries under local contracts.

"Either there needs to be a change in Irish law or there needs to be changes in the double taxation agreements between those other European countries and Ireland, " he said. "We have been on it for some time."

Further strikes

He warned investors that further strikes were likely to follow this summer’s unrest as the airline got to grips with trade unions, which it first agreed to recognise nine months ago.

“It is inevitable that there will be some strikes as we learn how to deal with unions and the unions learn how to deal with us,” he said.

Mr O’Leary added that the airline wanted to avoid stoppages but could not “roll over” to every demand.

“We cannot concede to unreasonable demands and maintain a low-fares airline,” he argued. “But we will be reasonable where unions are reasonable.”

He also insisted that Ryanair continued to make good progress on finalising collective labour agreements with unions.

Pilot and cabin crew unions in the Republic and several European countries staged one-day strikes over the summer in disputes over pay and conditions, while the airline faces potential unrest in coming weeks.

Minimal disruption

The airline’s chief executive maintained that the stoppages caused minimal disruption to services.

He pointed out that the worst impact of a series of one-day strikes by the Irish Airline Pilots’ Association was the cancellation of 24 out of 300 flights.

Similarly he argued that a recent all-out action by VC caused the airline to cancel 150 flights of 450 in Germany and a total of 2,500 across Europe.

Mr O’Leary described Ryanair’s forward bookings as “strong” but added that fares were falling.

Ryanair expects to make between €1.25 billion and €1.35 billion profit over the 12 months ended March 31st.

Mr O’Leary repeated on Thursday that lower fares, an extra €400 million bill for fuel and increased labour costs meant profit would be lower than last year.

He also said he intended staying beyond the end of his current five-year contract in September 2019. However, he indicated that he favoured reverting to the 12-month rolling agreements with Ryanair that he had in the past.

Two independent directors, former minister Charlie McCreevy and retired PwC partner Declan McKeon, did not seek re-election to the board.