Strike-hit Ryanair warns on profits, signals job cuts

A series of strikes in Europe has forced Ryanair to revise its profits forecast (AFP pic)

LONDON: Ryanair slashed its profits forecast Monday and signalled job losses in the Netherlands and Germany, as the Irish no-frills airline revealed the fallout of pan-European strikes by its disgruntled staff.

The Dublin-based carrier cut its annual net profits forecast by 12% owing to recent walkouts by pilots and cabin crew that has forced it to cancel hundreds of flights over the summer peak season.

Ryanair lowered its estimate for annual profits after tax to 1.10-1.20 billion euros (US$1.27-US$1.39 billion) from a range of 1.25-1.35 billion euros for its financial year ending next March.

The airline posted net profit of 1.45 billion euros in 2017-18.

“Ryanair cannot rule out further disruptions… which may require full-year guidance to be lowered further,” the airline said in a statement.

It added that from November 5, it would leave eight aircraft on the tarmac, equivalent to a 1.0% reduction in its winter capacity.

All four aircraft will be taken out of its Eindhoven base in the Netherlands, while the only two planes based in Bremen, Germany, will also be removed from action.

Two out of five aircraft stationed in Niederrhein, Germany, will also be grounded.

“We will… now consult with our pilots and cabin crew at these three bases to minimise job losses,” Ryanair said.

“We expect to offer our pilots vacancies at other Ryanair bases but, as we have a large surplus of winter cabin crew, we will explore unpaid leave and other options to minimise cabin crew job losses.”

Ryanair’s share price was down more than 7% to 12.16 euros on the news.

Regret these disruptions

The profit warnings come three days after cabin crew walked out in Germany, Belgium, Italy, the Netherlands, Portugal and Spain — and after some pilots’ unions also went on strike.

Ryanair staff have been seeking higher wages and an end to the practice whereby many have been working as independent contractors without the benefits of staff employees.

A key complaint of workers based in countries other than Ireland is the fact that Ryanair has been employing them under Irish legislation.

Staff say this creates huge insecurity for them, blocking access to state benefits in their country.

While Ryanair has struck some deals with unions — last week it signed deals with cabin crew unions in Italy to provide employment contracts under Italian law — it has yet to reach agreement in other countries.

Also in September, Ryanair pilots across Europe staged a separate coordinated 24-hour stoppage to push their demands for better pay and conditions, plunging tens of thousands of passengers into transport chaos at the peak of the busy summer season.

In July meanwhile, strikes by cockpit and cabin crew disrupted 600 flights in Belgium, Ireland, Italy, Portugal and Spain, affecting 100,000 travellers.

“While we successfully managed five strikes by 25% of our Irish pilots this summer, two recent coordinated strikes by cabin crew and pilots across five EU countries has affected passenger numbers,” Ryanair chief executive Michael O’Leary said in Monday’s statement.

“While we regret these disruptions, we have on both strike days operated over 90% of our schedule.

“However, customer confidence, forward bookings and third-quarter fares has been affected, most notably over the (upcoming) October school mid-terms and Christmas, in those five countries where unnecessary strikes have been repeated,” he added.