A “perfect storm of one-off pilot shortages” cost Ryanair €25m (£22m) in compensation payments, the airline has said. Revealing healthy half-year results, chief executive Michael O’Leary said higher pay to attract and retain flight crew will add €100m to the airline’s annual costs.
In the first financial results since Ryanair cancelled around 20,000 flights because of an insufficient number of pilots, the airline said the crew shortage was caused by three factors: allocating a calendar month of annual leave to more than half its pilots between September and December; “mismanaged blockages” in the training of 200 new recruits; and a failure to address the transition to a different “flight-time limitations” cycle.
The first effect was a collapse in punctuality during early September.
Then, on 15 September, the airline abruptly cancelled more than 2,000 flights over the following six weeks to the end of the summer season.
Ryanair says the move was “solely to protect the other 98 per cent of our customers”.
Among the first passengers to be affected were Tracy and Colin Virr from Suffolk, whose homeward flight from Bordeaux to Stansted was cancelled. They were rebooked two days later, then that flight was grounded as well. The couple spent hundreds of pounds on new flights, additional accommodation and car hire.
Ms Virr said: “There seems to be no sense of any responsibility or customer service or care.”
A Ryanair spokesperson said: “These customers were transferred to the next available flight, which was also regrettably cancelled. We sincerely apologise for any inconvenience caused and our customer service team has provided full assistance and processed their claims for compensation and expenses.”
On 27 September, the number of cancellations multiplied. The airline said it would ground 25 aircraft between November and March 2018.
In total, around three-quarters of a million passengers had their Ryanair flights cancelled. Anyone given less than two weeks’ notice was entitled to compensation of €250 or €400, depending on the length of the flight. The cost to the end of September was €25m, but there may be additional costs in the second half of the airline’s financial year, which began in October.
To avoid future problems, the airline says its pay will be increased to more than 20 per cent better than rivals such as Norwegian and Jet2, which both use Boeing 737s, the only aircraft type operated by Ryanair.
The airline says the added cost will be up to €100m in a full year, “but will not significantly alter the substantial unit cost advantage we have over all other EU airline competitors”.
Ryanair has also lured its former chief operations officer, Peter Bellew, back from Malaysia Airlines, where he was chief executive.
The aviation analyst, John Strickland, said: “Ryanair knows this is a problem which it has to fix quickly and in its entirety. It doesn’t mean that they will accede to pilot unionisation.
“Pay is on the table to beat key competitors, and with the return of Peter Bellew to the fold we are likely to see a change in tone and level of engagement with the pilots.
“One thing O’Leary doesn’t lack is determination and he’s likely to live to fight another day.”
The airline says its forecast for full-year profits is at least €1.4bn, assuming there are no further “security events, ATC [air traffic control] strikes or negative Brexit developments.”
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