Shares in Ryanair fell 1% to bring its losses in the past year to over 27% as German pilots and cabin crew said they would strike today, forcing it to cancel 150 services.
Ryanair said its smaller bases in Germany, where it has around 400 daily flights, are especially at risk of being shut since they fail to make money in the winter low season.
While Ryanair has made progress in negotiations elsewhere, sealing deals with pilots here and in Italy, unions in Germany said earlier this week that talks on pay and contracts had failed to produce an agreement.
“We want a stable collective labour agreement,” chief operations officer Peter Bellew said in Frankfurt.
If we can’t achieve that it’s going to be difficult to maintain our normal business in German.
Ryanair says it has a market share of 9% or 10% in the country and that a deal with unions would allow it to pursue plans to increase that to 20%. Services staffed by contract pilots will be unaffected by the strike, together with operations that use planes based outside the country. The last walkout in Germany on August 10, which also involved pilots in four other countries, led to the cancellation of more than 400 flights.
Though Ryanair recognised Germany’s Ver.di union in July, the trade union group says two rounds of talks on higher pay and minimum salaries produced no result and called on its 1,000 cabin crew at the carrier to walk out. Vereinigung Cockpit, representing pilots, said months of negotiations had led to “deadlock”. All told, Ryanair has reached recognition agreements with about 60% of the pilot and flight-attendant unions in the markets where it operates, according to Morgan Stanley.
Kenny Jacobs, Ryanair’s marketing chief, described the latest German action as a “wildcat strike” and “not good for anyone”. At the same time, cabin crew from Spain, Italy, Portugal, and Belgium last week agreed to stage a further walkout later this month.
Meanwhile, the president of the International Transport Workers’ Federation (ITF) said Ryanair shareholders should not re-elect longstanding David Bonderman as chairman at its shareholders’ meeting next week. “It’s clear that Ryanair’s corporate governance model needs to change,” said ITF’s Paddy Crumlin.
Ryanair said: “Ryanair shareholders will pass all AGM resolutions by a large majority this year, including the nomination of directors and chairman, as they have done in all previous years. They appreciate how fortunate we are to have an outstanding chairman like David Bonderman guide the board and the airline.”
Bloomberg and Irish Examiner staff
