Belfast Telegraph

Year severe turbulence buffeted Ryanair

Pilot crisis made it a bad 2017 for boss Michael O’Leary, while Norwegian shook up competitors, writes John Mulligan

Thousands of Ryanair flights were grounded
Thousands of Ryanair flights were grounded
Norwegian Air’s entry into the transtlantic market ruffled feathers

Europe's aviation market witnessed enormous upheaval in 2017. Ryanair was arguably centre-stage, first with its September admission that it had mismanaged its pilot rosters, resulting in the carrier cancelling thousands of flights and grounding aircraft into 2018 as it sought to fix the problem.

However, the crisis also unleashed a push for what will eventually be a dramatic change at the 32-year-old airline, with its landmark decision this month to recognise trade unions.

It was a major U-turn from the entrenched position Ryanair chief executive Michael O'Leary had clung to for decades: that union recognition would never happen at the airline.

In September the threats to its 4,200 pilots begun as it became evident they were agitating for change. "I don't even know how there would be industrial action in Ryanair," Mr O'Leary said that month following the airline's AGM. "There isn't a union in Ryanair. There has been no demand for new contracts."

He added that any pilots who engage in industrial action could "kiss goodbye" to pay increases, but insisted it wasn't a threat.

"We'd never threaten our pilots. We have some goodies to discuss with pilots, but if pilots misbehave, that will be the end of discussion on goodies. I don't think that would be construed as a threat," he said.

But as its pilots became more organised, it was apparent there was a real desire among large numbers of them for change.

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The rostering failure wasn't the result of just some administrative challenge - it unmasked a significant problem Ryanair had with retaining pilots.

As Ryanair intensified efforts to keep a lid on the fallout, it also canned efforts to acquire part of the failed Italian flag carrier Alitalia.

Meanwhile, the pilots methodically plotted their strategy, creating Ryanair company councils under the auspices of unions around Europe, ensuring that any industrial action they might take was legally water-tight.

The acrimony from the Ryanair side intensified, as a newly-formed pilot group sought to engage with the airline.

Former Ryanair executive Peter Bellew, who had been working as chief executive of Malaysia Airlines, was drafted back in to the Dublin-based carrier as chief operations officer.

He was tasked with sorting out the pilot rostering mess and getting things generally back on track.

In December Mr Bellew gave his own damning take on how the Ryanair culture had broken.

Speaking to Ryanair pilots at London Stansted, the airline's biggest base, the day before the airline announced it would recognise unions, he said the tone at the carrier had become "miserable", even at head office.

The culture was one where pilots could not even get answers in many cases to simple requests, he admitted.

He acknowledged that retaining pilots was his key priority for now. In an interview with Reuters just two days later, Mr O'Leary insisted the idea to recognise unions had been his.

Ryanair staff pilots in Dublin who are members of the Irish Airline Pilots' Association had announced they would strike for 24 hours on December 20.

Pilots in Portugal and Germany were set to follow suit. In Italy, a strike was also planned.

Then on December 15 Ryanair announced that it would recognise unions.

The first talks have been held between Ryanair management and unions in what is going to be a turbulent flight path.

Elsewhere Aer Lingus, now part of the IAG group that owns British Airways, Iberia and Vueling, continued its transatlantic expansion. It added new long-haul A330s, and opened or announced routes to Miami, Philadelphia and Seattle.

However, in July the Belfast Telegraph revealed that BA would be cutting its weekday flights on the vital business Belfast to Heathrow route by one-third from the end of October.

In October Aer Lingus chief operating officer Mike Rutter said the airline will take delivery of eight Airbus A321LR long-range aircraft between 2019 and 2020. The will be used to further bolster its transatlantic network, and will add 700 jobs.

In November Aer Lingus chief executive Stephen Kavanagh said that the airline has no plans to rejoin the Oneworld alliance.

"We believe… that we can bring more choice to the marketplace and grow in connected businesses without compromising any of our existing businesses or the consumer," he said.

"We're about building cost efficiency and capacity."

Aer Lingus and other carriers also saw transatlantic competition intensify with the launch of Norwegian Air's low-cost routes from Ireland to the US.

It began flying in July from Belfast International Airport to secondary airports TF Green Airport in Providence, Rhode Island - serving Boston - and Stewart International, which is around 70 miles from New York. There had been intense opposition in the US to the launch of the services, and the granting of Dublin-based Norwegian Air International (NAI, a unit of Norwegian Air Shuttle) the necessary permit to operate between Ireland and the US.

"Low-cost transatlantic is coming. So why stop it?" chief executive of NAI Tore Jenssen said in June.

"Try to make yourself more efficient instead of doing like the Americans do and trying to stop this for whatever it's worth."

"They know it's coming, but they try to stop it and milk the market for as long as they can. All they can do is slow it down, because it is coming."

With Brexit just over a year away, how the UK will fit into the EU's open skies is a question. Without a deal being sealed, it's possible in a worst-case scenario that there could be no flights operating between the EU and the UK for weeks after Brexit, which would have a calamitous impact.

Also, 2017 saw the collapse of Air Berlin as Gulf carrier Etihad said it could no longer provide financial support to the company.

Etihad's failed strategy of taking stakes in European and other carriers put it under significant pressure. It was also a major shareholder in Alitalia, but was no longer able to keep propping up that carrier, which went into administration in May.

Belfast Telegraph