Friday 23 August 2019

John Mulligan: 'Ryanair opened a Pandora's Box, and it's impossible to put the lid back on'

On the way out: Ryanair chief operations officer Peter Bellew has been named to fill the same role at rival EasyJet. Photo: Reuters
On the way out: Ryanair chief operations officer Peter Bellew has been named to fill the same role at rival EasyJet. Photo: Reuters
John Mulligan

John Mulligan

It's approaching two years since Ryanair announced that it would recognise trade unions.

The mushroom cloud from that decision has been hanging over the carrier ever since.

In the months after December 2017, its senior management team grappled to thrash out recognition agreements with unions across Europe for both pilots and cabin crew.

Having opened Pandora's Box, it's impossible to put the lid back on.

With decades under its belt as a non-unionised company, Ryanair was suddenly in very new territory. It's a terrain it's still learning to navigate and that learning curve is steep.

Insiders say one of the welcome additions to the management arsenal came with the appointment in late 2017 of airline veteran Peter Bellew as its chief operations officer.

He had previously worked with Ryanair as head of sales and marketing, and also as its head of flight operations.

Immediately prior to rejoining the airline, he had been chief executive of Malaysia Airlines.

With a reputation for bridge-building, he played a key role in trying to cement deals with unions.

He'd even been tipped as arguably the strongest contender to take over as Ryanair chief executive later this year when Michael O'Leary moves to being group chief executive of the company, which now also owns Laudamotion in Austria, Malta Air and Ryanair Sun.

But Mr Bellew announced last month that he's leaving Ryanair at the end of this year.

Days later, Ryanair rival EasyJet said Mr Bellew would be joining it as its chief operating officer.

Ryanair has now sued Mr Bellew in the High Court, in a dispute over contractual issues.

He's likely to have a lengthy non-compete clause in his contract with Ryanair.

Mr Bellew's loss to the Ryanair team will be felt, not only on the operational side, but also in those continuing negotiations with unions.

And the impasse reached between Ryanair and Fórsa shows few signs at this stage of being breached.

At its core, the union is thought to be seeking uniformity of terms and conditions among pilots, rather than a straight-up pay claim.

Notwithstanding Ryanair's insistence that its captains are paid more than €200,000 per annum, there's a big gap between what pilots start on and graduate to before hitting that level.

Still, it's hard to deny that many pilots are well paid.

As such, any industrial action might not find significant favour with the travelling public, especially in the midst of the summer season.

But they've been here before of course.

Last summer, Ryanair passengers endured disruption across Europe as unions called work stoppages.

In July last year, the airline announced that 20 of its 300 flights to and from Dublin on the Friday of the August bank holiday would be hit, with about 3,500 passengers affected.

A spokesman for the airline at the time claimed that 300 Dublin-based jobs with the carrier would subsequently be in jeopardy.

A total of 450 Ryanair flights were cancelled in August last year, as some of its pilots in Ireland, Germany, Belgium, the Netherlands and Sweden staged a 24-hour strike. That hit about 75,000 passengers.

But last summer, Ryanair was flying about 145,000 passengers a day - just to and from UK airports. That underscores the relatively low percentage of its overall daily passengers who were inconvenienced by the stoppages.

Still, it's a headache that the airline could do without, especially in the UK - its busiest market.

This year, the daily summer passenger figure in and out of the UK is about 156,000 for Ryanair.

The head of the British Airline Pilots' Association has claimed that the union hasn't been able to come to any agreement with Ryanair "in relation to any one of our concerns".

Ryanair's ability to actively manage its fleet helps it to minimise the impacts of strike action. But even the threat of action hits it in its pocket.

Consumers may decide to book flights with rivals rather than take the risk of cancellations.

Shareholders also hate the uncertainty.

Ryanair's shares fell below €9 yesterday, touching €8.88 before later regaining some of their lost ground. The last time they were as low as €8.88 was back in 2015.

Mr O'Leary famously said in 2017 as Ryanair's pilot rostering debacle unfolded, that he didn't give a "rat's ass" what the share price was. His investors do, though, and they are likely to want to see a quick resolution of union issues.

Meanwhile, Ryanair is likely to continue its tough stance on negotiations, here and elsewhere.

And with Peter Bellew heading for pastures new, those talks may be more fraught than ever.

Irish Independent

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