Ryanair published its financial results for the first half of 2017 today and with them came some fairly interesting comments about how the airline intended to resolve a dispute with pilots over pay and conditions. The low-cost carrier has been forced to cancel thousands of flights, affecting more than 700,000 customers over the winter months due to a fiasco involving the scheduling of annual leave for pilots.
The airline today said the situation had been caused by a “series of poor planning decisions” which led to a “perfect storm” of pilot shortages. However, Ryanair was quick to point out that this was a one-off event and again insisted they were not short of pilots.
Speculation has mounted that Ryanair has seen an exodus of pilots to rivals such as fellow Boeing 737 operator and competitor, Norwegian. A claim that Ryanair has always denied. But in a move that would suggest, Ryanair is having to compete with rivals for the limited number of qualified pilots available, the airline today said it would offer a “materially higher” wage with better career prospects and improved rosters.
Ryanair claims the improved pay and conditions will push wages for pilots at the airline 22% higher than those at Norwegian and Jet2. The move will set the carrier back approximately €100 million.
In the last month, the chief executive of Malaysia Airlines and former Ryanair executive, Peter Bellow returned to the airline to head Operations Management. He’ll be responsible for implementing a new pilot rostering system and improving dialogue between pilots and the company.
In a statement, Ryanair said it had “responded quickly to repair this failure, eliminate further cancellations and we are determined to invest the time, money and manpower to ensure that it never recurs.”
Responding to a campaign by some pilots to introduce formal union recognition, Ryanair maintained its position that its use of Employment Relation Councils (ERC’s) was a “sophisticated” collective bargaining tool which was fully supported by pilots and cabin crew. Pilots at Stansted, who rejected the new deal will continue to receive a lower salary than new joiners at the base.
Despite the widespread cancellations and compensation payouts totalling €25 million, Ryanair still reported profits of €1.29 billion in the first half of the year. The airline said it carried 72 million passengers – an increase of 11% on the same period last year.
Ryanair’s coffers were boosted by a 14% jump in ancillary revenues – such as reserved seating fee’s, priority boarding and car hire. The airline was also helped by a 3% drop in fuel costs during the period.
Commenting on the results, Ryanair’s Michael O’Leary said: “These strong H1 results reinforce the robust nature of Ryanair’s low fare, pan-European growth model even during a period which suffered a material failure in our pilot rostering function in early September.”
