Yahoo Finance Is this the end of Ryanair strikes in Europe?
Ryanair wants passengers and investors to believe its tumultuous season of strikes is winding down as it reaches new labour deals with unions across Europe. But the situation isn’t as rosy as it may seem.
Europe’s biggest budget airline published a statement on Friday saying it had signed a new agreement with its Portuguese pilots’ union after recently signing similar deals in the UK and Italy.
But these agreements still have to be ratified by union members, which isn’t a sure thing. Other markets – including Germany and Spain – are still in negotiations, which raises the risk of fresh strikes and cancelled flights.
The German pilots’ union VC, which serves one of Ryanair’s (RY4C.IR) biggest markets, continues to promote a picture at the top of its website with bright yellow text saying, “RYANAIR MUST CHANGE!”
“There’s still significant markets out there where [Ryanair] hasn’t made progress,” Daniel Roeska, an aviation analyst at Bernstein, told Yahoo Finance UK. “What you’re hearing is more PR and negotiation ploy.”
The UK pilots’ union BALPA lashed out at Ryanair’s statement, noting that there’s no agreement until members vote.
“What’s happened I think is that Ryanair has got itself a little bit over-excited at the thought of a potential agreement,” said BALPA’s general secretary, Brian Strutton. “They should calm down until we’ve put the proposal to the members to vote which we will do over the next few weeks.”
Ryanair has struggled with labour relations since it bowed to pressure to recognise unions for the first time almost a year ago. Ryanair executives, led by CEO Michael O’Leary, have been openly antagonistic towards their pilots and unions, leading to a string of strikes and acrimony.
Cabin crew took part in a walkout across six European countries last month that disrupted the plans of more than 40,000 passengers.
“You can never walk away from a union … It is not going away. It’s like a bad marriage and you cannot divorce,” warned Roeska, noting that the German union seems to be “digging their heels in”.
These high profile union squabbles and concessions have raised costs at the airline and contributed to a rare profit warning this month.
Airlines across Europe are also struggling with tough competition and higher fuel costs on the back of rising oil prices. Many smaller airlines have gone bust in recent months.
Shares in Ryanair have dropped by 23% since the start of the year. But it has faired better than its competitors. Low-cost carrier EasyJet (EZJ.L) has seen shares drop by about 26% in 2018, while Air France-KLM (AF.PA) and German airline Lufthansa (LHA.DE) have seen shares plunge by roughly 40%.
Air France union breakthrough
Air France-KLM also announced on Friday it had reached an agreement with various Air France unions on pay.
Benjamin Smith, the new CEO at Air France-KLM, was tasked with signing a deal with unions after his predecessors had failed. The agreement covers both ground staff and cabin crew workers.
With files from Reuters
