Is change coming to Ryanair?
Swamped by a torrent of bad publicity over mass cancellations, and its handling of them that might give at least some of its customers pause for thought before flying with it in future, the airline needs pilots and it needs them fast.
In attempt to persuade them to give up days off a bonus has been offered, reportedly £12,000 for captains, £6,000 for first officers. That’s a handy sum, even after tax has been taken off the top.
Whether it will prove to be enough is open to question. Mutiny is in the air with staff at a number of bases saying thanks but no thanks. You need to talk to us about new contracts.
The problems faced by Ryanair passengers are often reported. The issues faced by the people that work come to the fore less often.
But they are most certainly there.
Concern about them was what prompted a number of big European pension funds to pull their investments.
Last week the European Court of Justice said that Belgian ground crew were entitled to test its business friendly Irish labour contracts before a Belgian court.
However, even though unions were grinning from ear to ear, Ryanair focussed on the ruling’s technicalities and attempted to portray it as a victory for the airline.
In other words: This is a leopard that won’t easily change its spots.
The company would be wise to heed the call of its pilots for talks. It’s not as if they don’t have alternatives that they could pursue, and the fact that they do may have played a role in formenting the current crisis. The market for airline pilots is moving in their favour.
But Ryanair is a hugely profitable company, a money making machine. The hit it’s taking from having to compensate passengers affected by cancellations will be sizeable. It will likely run to tens of millions of pounds. The cost of paying bonuses to pilots will also be considerable. However, it has the resources to easily handle both.
The hit to its reputation? These things fade over time, and as I wrote last week, people know what they’re dealing with when they fly with this company. It hasn’t stopped them in the past, even though there are alternatives out there for them too.
Ryanair’s response to the pilots is understandable by Ryanair's logic. Rather than considering the issues that have led to the current unhappy situation, and then working with its people to resolve them, it has elected to thrown some short term cash at them with the intention, I’d imagine, of carrying on as before after the dust has settled. Look at our earnings! Why should we change our model?
The chance of a repeat? We’ll worry about that if it happens. We've built a small airline up to become the world's favourite. Look at our earnings!
Investing in being nicer to its pilots, rather than buying them off with short term bungs, would indeed be the wise step to take. But this is a company that hasn’t always been wise, largely because it hasn’t needed to be. Look at our earnings!
To get it to change tack will therefore require a considerable push. It appears that a substantial number of its pilots are of a mind to have a go at that, and more power to them. They have a rare opportunity, one they should take advantage of.
They’ll have to gird their loins, however. The change they want to see won’t easily be won.
