Ryanair claims flight cancellation fiasco won’t dent profits

Ryanair claims it is on course to make a pre-tax profit of €1.40 billion to €1.45 billion this year despite having been forced to cancel 20,000 flights in September due to a mix-up over pilot holidays.

In announcing its first-half financial results this morning, Ryanair said it had given pilots too much holiday and failed to complete the training of new pilots on time, which had led to staff shortages.

As a result, 700,000 passengers’ flights were cancelled or rescheduled, costing the airline around €25 million.

Following the fiasco, it has reviewed its pilots’ pay, it said. “This rostering failure has challenged us to address the competitiveness of our pilot pay, as well as pilot concerns about communications, career progression and basing," it said.

“While our pay was already slightly higher than Boeing 737 competitor airlines, we could have responded sooner to a tightening market for experienced first officers with pay increases for our experienced pilots, reinforcing our long standing and successful ERC collective bargaining process, and improving the range and choice of bases and contracts we offer our pilots.

“We will now move from being ‘competitive’ to offering materially higher (over 20%) pay with better career prospects, superior rosters, and much better job security than Norwegian, among others, can offer.”

It said that the measures will add €100 million a year to its crew costs, but ‘will not significantly alter the substantial unit cost advantage we have over all other EU airline competitors’.

For the six months to the end of September, its pre-tax profit was up 11% to €1.29 billion following an increase in passenger numbers from 64.8 million to 72.1 million.

The flight cancellations in September will have a bigger impact on Ryanair’s results for the second half of the year, but the airline said it was still on target to make a full year profit of €1.40 billion to €1.45 billion.

The airline said it had sold 2% more seats than this time last year, but at lower fares. It forecast a 4% to 6% drop in fares for the full year, but predicted ancillary revenue would be up by 1%.

Chief executive Michael O’Leary said: “I sincerely want to thank all our people for their help and support over what has been a very difficult four week period in September.

“Our pilots, cabin crew, customer handling and customer service teams have responded brilliantly to a very difficult situation that was not of their making. Thousands of our pilots and cabin crew have volunteered to work days off to ensure that disruption to our customers was minimised.

“Our customer service teams have worked late and over weekends to re-accommodate those customers who were disrupted and have dealt with over 700,000 requests in just 18 days, a phenomenal performance of which we are extremely proud.

“I’m sorry that our people have had to listen to misinformation about Ryanair promoted by competitor pilot unions, however we have been here before, and we will be again.

“We understand that the reason they wish to denigrate Ryanair is because their airlines cannot compete with us. As usual when these union airlines fail, such as Monarch, Air Berlin and Alitalia in recent months, their pilots all come to Ryanair seeking jobs that pay up to €175,000 a year, deliver a double bank holiday weekend every week, with the best promotions record and, the best job security in Europe.

“We will continue to work hard to deliver for our people, our customers and our shareholders while these competitor unions will continue to rail and fail.”