Ryanair's game of roulette: Airline's union stare down could cost £30m
The low-cost airline's pilots in Ireland are again due to strike tomorrow ... and the carrier's gamble in facing down the unions could cost it £30m, reckons Simon Calder
If you have been on a Ryanair flight in the past decade, you will know that cabin crew sell scratch cards which offer €1m (£890,000) as the top prize. These in-flight flutters comprise valuable ancillary revenue for both the airline and the staff who sell them.
But it's difficult to think of a bet with less favourable odds.
There is no Ryanair card that, when scratched, reveals a million-euro prize.
Instead, a fortunate few qualify for the opportunity to attend an event where the idea is to select an envelope from 125 on offer.
One contains that €1m prize, while the remaining 124 offer only one-twentieth as much: €50,000 (£44,426).
So, to become a euro millionaire courtesy of Ryanair, you have to be extremely lucky. Twice.
More than 100,000 passengers lost out in a different kind of Ryanair raffle, when the airline cancelled 600 flights - about one in eight of its total schedule - last week because of a strike by cabin crew in Spain, Portugal and Belgium.
Irish pilots have announced their fourth strike tomorrow, following three days of strikes earlier this year.
The unlucky travellers last week were those whose flights were pre-selected for cancellation and given a week's notice to sort out alternatives. But they may yet turn out to be winners.
In an unprecedented move, the Civil Aviation Authority (CAA) is urging everyone whose flight was cancelled to claim compensation under European air passengers' rights rules. Either €250 or €400 (depending on the length of the journey) awaits, says the CAA; just ask.
Or don't bother, because the airline is rejecting all claims. "As these flight cancellations were caused by extraordinary circumstances, no compensation is due," says Ryanair.
"The union is acting unreasonably and totally beyond the airline's control."
You might take the view that any airline can avoid a strike simply by meeting the union's demands and so, surely, it is responsible for the cancellations and should compensate passengers accordingly?
The courts have failed to agree, except for a case involving a wildcat strike in Germany, where TUI was told to pay compensation. Odd, I agree, that an unofficial strike should be regarded as within an airline's control, but not an official stoppage.
Yet it's a fair bet (fairer than the scratch card odds, at any rate) that either a cheesed-off passenger who happens to be a lawyer, or a claims-handling firm scenting a gold rush, will seek a definitive court ruling on the present sequence of Ryanair strikes.
I calculate that, if everyone whose flights were cancelled last week successfully claimed, Ryanair would have to pay out around £30m. And if judges rule against the Irish airline, then British Airways and Air France are in for an expensive time, too, due to the cabin crew dispute at BA last year and frequent flight crew and ground staff stoppages at the French airline through the spring.
For an airline that makes an average of £100,000 per hour in profits year-round, the potential compensation is small change. Ryanair's bosses are, instead, focused on what they see as an existential battle for the airline's ultra-low-cost model.
They are behaving in a manner completely at odds with every other carrier involved in industrial disputes.
The typical airline union spat goes like this. Pilots, cabin crew, or engineers, say: "We're not happy and we're going to ballot for a strike."
The workforce duly votes for industrial action, which strengthens the union's hand and also scares off a number of prospective passengers, who book with rivals: even a whisper of a strike sends high-spending business travellers scuttling for other airlines.
At that point, very often, an agreement is reached and they all live happily ever after, or at least until next summer. At worst, if there is a strike, both sides swiftly negotiate a compromise from which they can both claim victory and save face.
But Ryanair's attitude shows it is in no mood to settle: "We are not prepared to concede to unreasonable demands that will compromise either our low fares or our highly-efficient model."
Rather than talking down the summer of discontent, it has warned passengers to "expect further strikes over the peak summer period".
The strikers that Ryanair has chosen to take on for a showdown are from its own backyard: the pilots employed by the airline in the Republic.
In a dispute about seniority and base transfers, they stopped work for three days last month. On each occasion, a couple of dozen UK-Dublin flights were cancelled.
The pan-European campaign by cabin crew in pursuit of better pay and conditions has led to far more flights being grounded. But Ryanair appears to believe that making an example of Irish pilots will be more effective pour encourager les autres - and to deter others from striking.
The airline has thrown down the gauntlet by announcing that six Dublin-based aircraft will be moved to Poland in the winter, leaving 100 pilots and 200 cabin crew facing redundancy. The Irish Airline Pilots' Association promptly picked it up.
Within three hours of Ryanair's Dublin downsize announcement, the union called for another strike tomorrow.
Ryanair duly cancelled 20 flights between the UK and Dublin.
The pilots are now playing Ryanair roulette. This gamble is less lethal than the Russian variety. But at least with a pistol loaded with a single bullet, the odds are five to one against losing. Ryanair roulette has far shorter odds.
The airline is determined to avoid staff being seen to have gained from striking.
Meanwhile, we passengers with boarding passes (or raffle tickets) on Ryanair face uncertainty about whether our trips will go ahead as planned.
I have four future flights booked with the airline and I calculate the odds of any of them being cancelled by strikes at around 125-to-1.
I promise to buy a scratch card on board; not because I yearn to qualify for a one-in-125 chance of choosing a million-euro envelope, but to give Ryanair's hard-working, always-professional cabin crew a bit of a boost.
In this tempestuous summer, they need all the help they can get.