Ryanair Pilots Step Up Pressure With Demand to Double Pay Rise

LONDON (Capital Markets in Africa) – Ryanair Holdings Plc’s pilot uprising shows little signs of abating, with an ad-hoc group demanding that a wage increase turned down by London Stansted crews be doubled and extended across the budget airline’s European bases.

The unofficial European Employee Representative Council made the proposal to pilots after cockpit crews at Ryanair’s biggest base rejected the existing offer, according to a document sent to pilots on Sunday and seen by Bloomberg. The group has asked for feedback from air crew and pledged to organize strikes if a deal can’t be reached.

In a push for broader changes to working conditions, 60 percent of pilots at London Stansted on Friday voted against a raise that would have boosted compensation to about 20 percent more than rivals Norwegian Air Shuttle ASA and Jet2, which like Ryanair operate Boeing Co. 737 jets. The rogue pilot group is demanding an increase in basic pay to 150,000 pounds ($198,000) for captains across the company, compared with 64,000 pounds currently.

The stand-off between pilots and Ryanair management has simmered since the airline was forced to cancel more than 20,000 flights affecting about 700,000 customers due to botched planning that left it lacking enough crew to maintain its schedule. The EERC, created after the cancellations last month, is seeking to establish a collective bargaining group across the carrier’s 86 bases.

‘Unreasonable Stand’
Pilots look to be taking “an unreasonable stand,” Mark Simpson, an analyst at Goodbody Stockbrokers in Dublin, wrote in a report to investors. “This is a wish list that will be firmly rejected by the company and sounds as if they have taken on a lead from the U.S. union representatives that have been advising Ryanair’s pilots.”

Ryanair shares fell 1.3 percent to 16.03 euros as of 11:44 a.m. in Dublin. That pared the stock’s gain this year to 10 percent, valuing the company at 19 billion euros ($22 billion).

“While no pilot may wish to take industrial action, sometimes it is the only way to bring an intransigent employer to a satisfactory agreement,” the EERC said in a letter accompanying the document. “We have to consider this possibility to ensure we have an equal voice at the negotiating table.”

The demands, which would be retroactive to Sept. 1, include having Ryanair cover costs for uniforms, training, health care, on-board drinks and snacks, and ground transport and accommodation while working from an alternative base. The plan also calls for permanent contracts for pilots currently working as contractors and would grant shares in the company tied to seniority.

Madrid Rejection
Ryanair shrugged off the setback in Stansted, saying it will hire new pilots at the higher rates rejected at the base, a spokesman said Friday, adding that the company “will continue to engage with the London Stansted ERC to understand how it can address their remaining concerns.” Management’s existing offer for an increase of as much as 22,000 pounds, including bonuses, has been accepted at more than 10 bases.

The rejection by Stansted pilots follows a series of blows to Ryanair, including a similar rebuff at its Madrid base, a call to strike by an Italian union and pledges of financial and logistical support from three major U.S. labour groups. Dublin-based Ryanair has said it will not recognize any union body, citing two previous failed efforts to organize its pilots in 2004 and 2012.

Ultimately, the feud is over Ryanair defending its bare-bones structure, cantered around efficiency and low costs. To stem further pilot disruption, the company is hiring more staff to manage rosters and has named Malaysia Airlines Bhd. Chief Executive Officer Peter Bellew to replace its chief operations officer who left the Irish airline this month. Bellew, a former Ryanair executive, will re-join on December 1.

Source: Bloomberg Business News