Budget airline Ryanair has been in the news for all the wrong reasons of late, and appear to be fighting battles across a number of fronts, be it from passenger complaints due to cancellations, arguments over statutory compensation payable under EC261/2004, falling share prices, or bad publicity.
But how did we get here?
Well, first of all, the company changed its holiday year to January to December from their usual April to March. As a result, a backlog had arisen due to staff frantically trying to book time off before the January 2018 deadline.
Secondly, there have been issues over punctuality with rates recently falling below 80% and factors such as air traffic control delays, strike action and bad weather being blamed for delays
As a consequence of the cancelled flights, passengers are being urged to seek redress through their statutory entitlement to claim compensation under the European Directive. However, according to consumer group Which?, Ryanair’s information to its customers about claiming compensation is “woefully short”.
This is set against a backdrop of dissatisfaction from staff members having felt long-undervalued by the company, culminating in many pilots leaving for other airlines on better terms. Ryanair have responded by promising to bring in around 120 new pilots over the coming weeks, but this in itself brings its own challenges.
Earlier this month, the airline lost a legal battle to force employees across Europe to take disputes to the Irish courts after the European Court of Justice ruled that cabin crew based in other countries could pursue legal claims locally
This issue centres around the airline’s employment model which was thrown into doubt, exposing them to increased labour costs as well as potential new claims from crew in other countries over terms and conditions.
Ryanair refused to be budged and insisted in retaining its practice of employing staff across Europe on Irish contracts. The motivation behind this was to gain an advantage over other EU countries in terms of productivity and wage levels. Ryanair argued that Irish legislation adopts all EU directives on employment rights which, in some instances, is more favourable than their EU counterparts.
The ECJ ruled that the location where staff were based was a significant factor in determining jurisdiction, but this was readily cut-down by the transport unions who considered this to be an entry-point of opportunism afforded to the airline.
The ECJ has, over many years, developed from trade adjudicator into arbitrator of workers’ rights. As a result of the Court’s findings, it was estimated that roughly 60% of Ryanair pilots and cabin crew were based in jurisdictions with less favourable labour laws than Ireland, and the fall-out since has seen an uptake of back-dated leave, culminating in a swathe of grounded flights.
The knock-on effect is likely to cost the airline millions in terms of lost revenue, compensation payouts and plummeting share prices. It comes on the back of many of its pilots having left the company for better pay and conditions at other airlines.
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