Ryanair boss Michael O’Leary talks putting up with strikes and risk of hard Brexit

posted on 12th September 2018 by Justin Burns
Ryanair boss Michael O'Leary talks putting up with strikes and risk of hard Brexit

Ryanair chief executive officer (CEO) Michael O’Leary says the low-cost carrier (LCC) is willing to “put up with strikes” if it defends its low fare business model and costs base.

The airline’s network and operations were hit again today, this time in Germany, where pilots and cabin crew went on strike leading to 150 of Ryanair’s scheduled 400 flights being cancelled.

Speaking at a press conference in London this morning, he said: “We are not easyJet, we will not roll over every time we are threatened with a strike.” O’Leary said it was a “surprise” strike in Germany and the airline was given only a day’s notice of the 24-hour strike was carried out due to the terms of a labour agreement.

He said that the strikes had though “damaged customer confidence” but only caused “minimal disruption”. “We do not want strikes, but we are willing to put up with them if it means defending the cost base and keeping fares low.”

O’Leary added: “If you threaten us with a strike and we think your reason for that is unreasonable, then we will take strikes and we will manage our way around those strikes.”

He said that 2018 will be the worst year on record for strikes in Europe for aviation, but he also emphasised that the likes of British Airways and Lufthansa have also been affected by strikes, but said this is less reported on by the media.

O’Leary added that “strikes are necessary” but the carrier remains willing to negotiate with workers and unions.

He also said that he had acquired new “humility” given recent problems that the carrier has faced. “Our new found attitude is one of humility after has happened over the last 12 months at Ryanair.”

As for Brexit, O’Leary lambasted the UK government’s for the lack of progress on aviation for after Brexit when the UK will leave the European Union in March next year.

He said: “There is every reason to believe the UK government would say in desperation ‘Everyone is free to land here’ but there is no indication the reverse is true.

“We remain concerned at the increasing risk of a hard (no-deal) Brexit in March 2019.  While we hope that a 21-month transition agreement from March 2019 will be agreed, recent events in the UK have added uncertainty, and we believe that the risk of a hard Brexit (which could lead to flights being grounded for a period of days or weeks) is being underestimated.”

O’Leary has been a critic of Brexit and has aired his Remain views previously. “Flights rights are what we care most about, followed by ownership rights, as the airline industry is so heavily regulated,” he said.

He also believes UK PM Theresa May will be gone by Christmas and said he thinks she will be replaced by a Brexiteer, who will complain “there isn’t enough time left for good Brexit deal” and “will reluctantly agree to transition period” – although he feels a no deal is “most likely”.

O’Leary said  that Ryanair was making good progress in obtaining its Air Operator Certificates (AOC) from the UK so it can operate post-Brexit.

Ryanair also revealed today plans to extends it UK network after it launched its fourth base in London as it will fly from London Southend Airport from the summer of 2019. The Essex airport will become the 21st gateway it flies from in the UK. Yesterday, the airline also launched a new base at Exeter Airport and will start flying there from April next year.

The carrier will base three aircraft at London Southend and fly 14 routes to Alicante, Bilbao, Brest, Copenhagen, Cluj, Corfu, Dublin, Faro, Kosice, Malaga, Milan, Palma, Reus and Venice.

Ryanair will also base two more aircraft at London Luton Airport next year as it adds six more routes to Alicante, Athens, Barcelona, Bologna, Cork, and Malaga and will also add three more routes from London Stansted Airport in the shape of Kiev, Lviv and Nantes.

O’Leary said the airline is aiming for a five per cent growth rate in the London market next year and taking its share to 24 per cent, up from the 19 per cent it now has. Next summer, it will operate 180 routes from four London airports and fly 26 million passengers.

O’Leary said that the carrier is well on track to over-take easyJet in the number of passengers carried in the UK market and forecasted it would do so in the next 12-18 months.

In Europe market share wise, he said Ryanair is the number two carrier in the UK, Germany, Portugal and Belgium, but number one in Spain, Italy, Poland, Ireland and Central and Eastern Europe.

He also talked of struggling Norwegian. “We are shocked it is still flying and it will go bust this winter we think,” he said. “We would not touch (investment wise) Norwegian with a barge poll. It is doomed,” O Leary added.

He said he was surprised that IAG had made a near five per cent investment but said IAG chief Willie Walsh had a good track record of turning airlines around and O’Leary also added Ryanair would not be buying any aircraft from Norwegian if it sells any in the future.

O’Leary said the financial guidance at Ryanair was unchanged for the year with a profit of just over $1 billion and its aim is to be flying 200 million passengers in five years time, up from the 140 million it does today.