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Anything but a quiet summer for Ryanair

10 Jan 2018

IoD Scotland talks Ryanair

Donald MacKinnon MIoD looks back at the problems that beset Ryanair over the summer – and the likely long-term legal fall-out from them

Hundreds of thousands of holidaymakers found themselves subject to Ryanair’s flight cancellations over the summer and autumn. It’s a situation that’s set to continue to March 2018.

Ryanair’s explanation was that it had mishandled its pilots’ holiday schedules. It all centres around a change in the way they calculated their annual leave, which essentially meant that too many pilots (and crew) had been given holidays at the end of the year, leaving the airline short-staffed. This problem was only made worse by the Flight Time Limitations which prevented pilots from doing double shifts to compensate for those away.

There are certainly many takeaway lessons from this when it comes to staffing businesses and organising annual leave.

However, the bigger lesson in this case is not how to organise a holiday roster, but how to keep employees happy, and how to respond when the company messes up. Ryanair’s Michael O’Leary is renowned for his ‘take no prisoners’ attitude, and makes no bones about the fact that cash is king. For the most part this seems to work, with Ryanair reporting £1.1bn in profits this year. The budget airline benefits from low plane purchase prices, maintenance and staff costs, enabling it to offer cut-price seats. Its reputation has also improved in recent years thanks to O’Leary’s enlightened ‘be nice to customers’ policy.

Nevertheless, this success has undoubtedly come at a price and it has now become clear that it is staff satisfaction. As a starting point, this cancellation debacle opened up old wounds among pilots over working conditions. Pilot representatives have shared growing concerns over the number of pilots leaving for greener pastures and this is well-founded; it is reported that some 140 of Ryanair’s pilots have joined airline rival Norwegian in the last 12 months.

Unhappy crews are leaving faster than they can be replaced and when this holiday issue arose, there were simply not enough pilots left to pick up the slack.

These underlying demands for better working conditions also meant that attempts by Ryanair to resolve this problem failed. Pilots were offered a one-off payment of £12,000 to delay their annual leave until the following year but this was rejected in a letter signed by thousands of pilots. Tensions only worsened when O’Leary apologised to customers at their AGM by accusing pilots of being “full of their own self-importance”.

In the midst of this employment rights saga has, of course, been the impact on Ryanair’s customers. It is expected that 400,000 were affected by cancellations and thousands have now called for a boycott of the airline. The media storm that followed put the focus on O’Leary and his management of Ryanair. However, he has surprised many by both apologising to the pilots for comments he made and by offering them better working conditions.

While it may be too little too late, we can hope that the controversial leader has finally learned two invaluable lessons. First, there is such a thing as bad publicity. Second, and perhaps more importantly, that employee satisfaction is a commodity not to be sniffed at.

The value of good employer-employee relations should never be underestimated; it impacts directly on customers, the reputation of the company, sales and profit. In a service-driven industry such as aviation, where the business is entirely dependent on the availability of trained staff, this should not be forgotten.

Ultimately, companies would do well to remember that customer satisfaction can only take a business so far if this is delivered at the expense of its employees.

Left, a rueful Michael O’Leary

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