Ryanair thought it could ignore employee rights. Its pilots had another idea…

Just in time for Christmas in 2017, Ryanair – until then a notoriously anti-union company – relented and announced that it was prepared to talk to pilots unions and even recognize them. The company has been hugely successful on the strength of its no frills service (not always as cheap as the promises) and its determination not to recognize unions. It is now the second biggest airline in Europe in terms of passenger numbers — 129 million in 2017 compared to the Lufthansa group’s 130 million – and probably the most profitable. Ryanair made a profit of €1.5bn in 2017 on a revenue of €6.5bn, compared to Lufthansa’s profit in 2016 of $2bn (€1.6bn) on a revenue of $36bn (€29bn).

So what made the Ryanair bosses change their collective mind? The simple answer is that the threat of industrial action by Ryanair’s pilots in Ireland, Britain, Italy, Germany, Spain and Portugal in the run-up to Christmas had its intended effect on management. “Christmas flights are very important to our customers,” according to Ryanair’s chief executive, Michael O’Leary, “and we wish to remove any worry or concern that they may be disrupted by pilot industrial action next week.”

The Financial Times saw O’Leary’s emollient statement as “a capitulation”. For 23 years as Ryanair’s boss, O’Leary had vowed never to recognise unions even gaining some notoriety for crossing a picket line of baggage handlers to help load a plane.  But Ryanair had been the instrument of its own crisis in the weeks running up to O’Leary’s dramatic volte-face. In the last quarter of 2017, the company was forced to cancel more than 20,000 flights apparently as the result of changes to the pilot rostering system.

From the beginning of 2018, a change in the way the annual 900-hour limit on pilot flying time is calculated brought Irish airlines into line with operators throughout the rest of the European Union. Ireland had previously used the year from April to March to calculate flying time. Now they have been obliged to adopt the EU’s practice of basing calculation on a calendar year.

In principle the switchover should have had no significant impact. For one thing, Irish airlines had plenty of warning about the change, and for another it should have been a relatively trivial matter to scale down flying time to fit a notional shorter year running from April to December. The Irish airlines might have had to suffer a financial hit but, considering Ryanair’s profit margin, that could hardly have been a significant issue for the company.

Instead of dealing with something that was essentially an accounting problem, Ryanair’s rostering department responded to the change “by over-allocating annual leave in the final four months of 2017, which meant almost half of the company’s pilots took a month off between September and December compared to 40 percent in a normal year”. At least that’s what Michael O’Leary told Reuters news agency.

The pilots themselves believe that Ryanair’s problems are more complicated than a temporary scheduling difficulty; their colleagues were leaving the company in droves and Ryanair’s flight cancellations and its demand that pilots give up a week of their annual leave merely exacerbated the feeling that the company treated its pilots “like janitors” as one serving captain told Reuters.

Ryanair pilots throughout Europe embarked on a hectic schedule of meetings and Facebook and WhatsApp messaging. Within a week of Ryanair’s initial actions, representatives of twenty of the company’s 87 bases across the continent were demanding new contracts. By December, pilots in Germany, Italy, Ireland and Portugal had threatened or actually called strikes that would have been the first of their kind in the airline’s history. The Italian pilots were still threatening to strike in early February.

“The discontent has always been there,” according to one pilot, “but the cancellations triggered everyone to mobilise.”

With Christmas ten days away and no sign of the pilots stepping back, Ryanair calculated it was facing the loss of 150,000 passengers — representing around €20m of revenue — over the Christmas season if it didn’t act soon.  Ryanair sent letters to pilot unions in its major European markets announcing its readiness to negotiate. “If the best way to [remove the threat of disruption to flights] is to talk to our pilots through a recognised union process,” O’Leary said in a statement, “then we are prepared to do so, and we have written today to these unions inviting them to talks to recognise them and calling on them to cancel the threatened industrial action planned for Christmas week.”

Antonio Piras, the general secretary of FIT-CISL, the Italian transport federation, commented that “Ryanair initially thought it could function by ignoring the rights of its employees but now, faced with reality, it is opening its eyes”

Michael O’Leary has acknowledged that union recognition will mean “significant change” for the company but he is bullish about it. Ryanair has changed its culture before and continued to prosper, he says, while Eddie Wilson, Ryanair’s chief people officer, acknowledged an inevitable “pressure on costs”. But the bosses insist that none of this represents any kind of “climbdown”.  “[With] the size we’ve got to, things probably had to change and we always knew it and it’s now,” Wilson said. Ryanair’s business model “will stay the same”.

It’s almost as though nothing in Ryanair’s world has really changed. Talks are proceeding, but there is unfinished business.

Unions have argued that recognition must extend to all the workers employed by the company, from pilots to cabin crew and from cabin crew to baggage-handlers. Liz Blackshaw of the London-based global union, the International Transport Workers Federation (ITF) does believe that Ryanair is changing but, she said, “this change is incomplete without the same recognition being afforded to all categories of workers.”

Perhaps more significant is the question of whether Ryanair will succeed in its attempt to negotiate separately with different national unions, thereby gaining an advantage. On 24 January 2018, a letter from the international pilots’ organization, the European Cockpit Association, signed by 11 trade unions, demanded that Ryanair agrees to a joint meeting with all the unions and commits to introduce permanent direct employment contracts by 1 March in accordance with the local laws of the country where staff are based.

Ryanair refused the idea of meeting the unions collectively saying that such a collective of unions would have no legal standing or licence to negotiate.

But the history of this dispute suggests otherwise. The pilots have taken action across a continent, and that action has undoubtedly been coordinated. If that approach survives, we may be beginning to see a transformation, not just of Ryanair, but of worldwide air transportation.  And who knows where that might end?

More details

Largest airlines in Europe

Ryanair’s Annual Report 2016

Arthur Beesley, “Ryanair backs down in battle over pilot unions”, 15 December 2017, Financial Times.

Conor Humphries, “Three months that shook Ryanair: How cancellations sparked a pilot revolt”, 20 December 2017, Reuters.

Conor Humphries, “European pilot group demands Ryanair meet unions collectively”, 24 January 2018, Reuters.

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Gary Herman

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