Trouble in the ranks
Celebrating its twentieth birthday with cake and bacon sandwiches, Ryanair continues to grow and profit but the pilots say at their expense. Hilary Curley reports
The agressive business style of Michael O'Leary, chief executive officer of Ryanair, has reaped substantial rewards for the airline twenty years after it was first established but they are not proving popular with Ryanair staff, particularly the pilots. Some pilots stand against what they see as intimidatory tactics of senior management.
Ryanair has been embroiled in three separate legal actions involving a number of their senior pilots over the past number of months. There are also two different claims of victimisation which have been made to the Labour Relations Commission and another two pending, involving complaints by over 100 pilots.
Further unrest awaits Ryanair as the pilots gear up to take action against the company because they allege it has stopped paying into their pension fund. The decision that changed the terms of their pension agreement was made without any discussion with the pilots and communicated to them by letter from Michael O'Leary, said Evan Cullen from the Irish Airline Pilots Association (IALPA). In an interview with Village, Michael O'Leary refuted this allegation saying it was "totally untrue. You can't stop pension payments, it is against the law".
The cases currently in the court arose from negotiations on new contracts for senior pilots. The main issue involves the signing of a bond for training required to fly the on the new 737-800 Boeing aircraft. If the pilots leave the airline within five years of signing the contract or if mandatory union recognition is imposed on Ryanair in the same time period, they will have to pay the €15,000 bond to the company.
The pilots referred the case to the Labour Court in November 2004 and the union IALPA says that the main reason for doing this was to obtain a copy of the contracts of employment, agree terms for transitioning to new aircraft and agree redundancy terms. Ryanair argued that the Labour Court was not entitled to hear the claim and the matter was simply about seeking union recognition for IALPA. This issue was debated at a hearing where the Labour Court ruled against Ryanair. The company then sought a judicial review of the Labour Court findings and was successful. This case is due to be heard on 7 June 2005.
"Going to the Labour Court has nothing to do with union recognition and in fact, I have written to the board of Ryanair specifically stating this fact," said Evan Cullen. "All we have asked for and all we are looking for is fair and equitable treatment".
Not surprisingly, Michael O'Leary disagrees. "This is IALPA's way of trying to get backdoor union recognition. I don't know why anyone would want to be part of a union", he said. "We negotiate directly with employees, they say that is what they want, and they know that by doing this, they will get better pay rates than union rates".
The contract controversy is also the source of the other two court cases. Ryanair claims their pilots are being intimidated and warned off flying the new Dublin based planes. It initiated disciplinary proceedings against the pilot, John Goss, saying that he had failed to assist them with their investigation into the intimidation claims.
John Goss secured a high court order in February stopping the company from conducting a disciplinary meeting with him and from taking any disciplinary action against him pending a full court hearing scheduled for 31 May. He claims that Ryanair is trying to punish him for joining a pilots' trade union and for filing a victimisation complaint. On 13 April, he received notice from Ryanair that he was being suspended on full pay until after the court proceedings.
By doing this, John Goss argued when he went back to court, the company effectively had initiated disciplinary action and therefore breached the court order. He filed a charge of contempt of court. At the case hearing, the Judge ordered that he be reinstated in his flying duties and deferred a ruling on the contempt of court matter until the 31 May. The suspension was not lifted however and John Goss brought another contempt of court action against Ryanair.
The finding of the second contempt of court charge was due to be delivered on 25 May but the judgement delivery was deferred again until May 31 although the Judge said it was written. In the meantime, Ryanair reinstated John Goss to his flying duties.
The final case pending is also situated in the intimidation claims and the new contracts. On 14 February, Ryanair initiated high court proceedings against IALPA and a number of named officials concerning what the company claims is "an organised campaign of harassment and intimidation of Ryanair pilots being conducted through a website organised and conducted by IALPA officials".
The website in question is www.repaweb.org and was set up in 2004 by the Ryanair European Pilot Association to "provide an anonymous and secure way for Ryanair pilots throughout Europe to communicate with each other".
Ryanair says that the website is a way of intimidating and harassing pilots who might be interested in flying the new Dublin based aircraft that is the subject of the contract controversy. It is looking to identify the people who have made postings identifying three pilots on the site who had accepted jobs flying the new aircraft and who they believed are central to the intimidation campaign. The matter is due before courts on 30 June 2005.
Michael Landers from the trade union Impact said that the pilots have had enough and are taking a stand.
"Employment conditions are totally arbitrary – it depends on what Michael O'Leary wants and that could change from minute to minute", he said. "The pilots are finally taking a stand because they are there for the long haul. It is their career. This is it. The big push".
Michael O'Leary laughed when this was put to him. "I have very little comment to make on the legal wrangles. IALPA does not represent too many of our employees or our pilots. The turnover of Dublin pilot staff is virtually zero, the pilot staff are better paid than others and there are queues of pilots looking to join the company".
Stories of staff paying for their own uniforms, their own meals, their own training, working long hours, no pension entitlement and no sick pay have been widely reported in the media. Impact trade union says the staff turnover is enormous and the majority of people leave within the year. Ryanair said that cabin crew staff turnover is 25 per cent.
The claims and counterclaims will continue in the courts over the next few months.
Ryanair: 20 years agrowing
1985. Ryanair is set up by the Ryan family with a staff of 25. The first route is launched in July with daily flights on a 15-seater aircraft, operating daily from Waterford to London Gatwick. 50,000 passengers are carried.
1986. Ryanair obtains permission to challenge the Dublin-London route. Services are launched with two 46-seater aircraft. The first flights operate in May from Dublin to London Luton. With two routes in operation, Ryanair carries 82,000 passengers in its first full year in operation.
1987. Ryanair acquires its first jet aircraft and increases its network with 15 scheduled routes from Dublin to Liverpool, Manchester, Glasgow and Cardiff. It and opens up new routes from Luton to Cork, Shannon, Galway, Waterford and Knock. Passenger numbers rise to 322,000.
1988. Ryanair leases another three jets and a new turbo aircraft. Two new routes from Dublin to Brussels are launched and a once weekly to Munich. Ryanair launches a business class service and a Frequent Flyer Club, neither of which prove successful. 592,000 passengers travel.
1989. Two more turbo aircraft are acquired and the fleet comprises six jets and three turbo props. The business class product is abandoned and the Frequent Flyer Club closed. The passenger numbers are 644,000.
1990. Ryanair accumulates £20 million in losses and requires substantial restructuring. The Ryan family invest a further £20 million in the company, and copying the Southwest Airlines low fares model, the airline is re-launched under new management as Europe's first low fares airline. Ryanair scraps free drinks and in-flight meals, reduces air fares and increase the frequency of flights. Passenger numbers rise to 745,000
1991. The Gulf War breaks out in January creating problems with passenger traffic. Ryanair responds by lowering airfares and reducing the number of aircraft resulting in the withdrawal from Kerry, Galway and Waterford. In May 1991, It switches its main London base from Luton Airport to the new Stansted Airport. Passenger numbers drop for the first time to 651,000 and jobs are lost but Ryanair makes a profit for the first time with an audited profit of £293,000 for the year.
1992. The restructuring of Ryanair continues and the route network is reduced from 19 to just 6 routes. Passenger numbers grow to 945,000.
1993. Ryanair launches a new route with daily flights from Dublin to Birmingham. In December, Ryanair announces a deal to buy a fleet of six Boeing 737 aircraft direct from Boeing. Over one million passengers (1,120,000) are carried for the first time.
1994. Michael O'Leary takes over as Chief Executive. Ryanair launches two new routes from Dublin to Manchester and Glasgow Prestwick. New services are started from Dublin to London Gatwick replacing Aer Lingus who have pulled off the route. Passenger rise to 1,666,000.
1995. In September Ryanair becomes the first low fares airline to operate a domestic route in the UK. Four more Boeing 737s are purchased and passenger traffic for the year exceeds two million (2,260,000). A profit of around £15 million is recorded.
1996. New routes to Leeds Bradford, Cardiff and Bournemouth are launched. Agreement is reached in November to purchase eight more Boeing 737-200s. A European Union decision enables, enabling airlines to compete freely throughout Europe. Passenger numbers increase to 2,950,000. Profits rise to £17 million .
1997. Ryanair becomes a public company with a successful flotation on the Dublin and NASDAQ (New York) Stock Exchanges. The share price surges from a flotation price of €11 to close at €25 on their first day of trading. It launches its first four European routes. Passenger numbers total 3,730,000. Profits rise to £19.5 million.
1998. Ryanair opens up a further six new destintions in Europe. An order for 45 new aircraft is placed with Boeing. Ryanair is voted 'Airline of the Year'. Passenger numbers rise to 4,629,000. Profits almost double to 36 million pounds.
1999. New European routes are launched to Frankfurt, Biarritz, Ostend, Ancona, Genoa, Turin, Derry and Aarhus in Denmark. With the ending of duty free sales on internal EU flights and travel, Ryanair introduces the lowest ever return fare of £19.99 on the Dublin-London route. Passenger numbers for the year are 5,358,000. Profits rise to £57.5 million
2000. In January, Ryanair launches Europe's largest booking website – www.ryanair.com. Within three months the site is taking over 50,000 bookings a week. Ryanair launches its first new base since 1991 by basing three new aircraft at Glasgow Prestwick, providing Scottish consumers with direct low fare flights to Europe (Paris and Frankfurt), in addition to low fares flights to Dublin and London. Passenger numbers soar to 7,002,000. Profits rise to £72.5 million.
2001. Ryanair selects its first Continental European base at Brussels Charleroi Airport. Daily flights from Brussels to Dublin, London, Glasgow, Shannon, Venice, Paris and Carcassone begin. Over one million passengers are carried in one month (august) for the first time. The terrorist attacks on 9/11 causes a downturn in passenger traffic and increases oil prices. In that year, the airline carries 9,255,000 passengers. Profits are up to £104.5 million.
2002. Ryanair selects Frankfurt as its second Continental European base and it is launched in April with ten routes to Ireland, Britain, Norway, France and Italy. Ryanair successfully overturns Lufthansa's repeated attempts to block low fare competition from Ryanair in Frankfurt. Ryanair announces the largest ever aircraft order by an Irish airline by increasing aircraft order with Boeing from 45 to 125 with a further option of buying another 125. Passenger numbers increase by over four million to 13,419,000. Profit made by the company for the year totals €150.4 million.
2003. Ryanair acquires Buzz airline from the dutch airline, KLM, in April and takes on a further 13 routes. This acquisition gives Ryanair access to eleven new French regional airports as well as making Ryanair the largest airline operating at London Stansted. Two new Continental European bases are launched. In this year alone, 73 new routes are launched and over two million passengers are carried in one month (July). Passenger numbers increase by a further five million to 19,490,000. Net profits recorded rise to ?239.4 million.
2004. Two new bases are launched in Rome and Barcelona as well as adding further aircraft to the existing bases at Stockholm Skavsta, Frankfurt Hahn and Milan Bergamo. The website ryanair.com now accounts for over 98 per cent of all Ryanair bookings. Passengers travelling with Ryanair increase to 24,635,000. Net profit in this year fell slightly to €226.5 million.
2005. Two new bases are launched at Liverpool and Shannon. Seventy more aircraft are ordered from Boeing. This takes Ryanair's total order with Boeing to 225 aircraft and 200 options. Ryanair now has 12 bases and 220 routes that cover 95 destinations across 19 European countries. Ryanair employs 2,302 people this year, almost double the number of employees since 1999.