The Ryanair flight cancellation and pilot shortage fiasco continued Thursday. The company’s AGM took place in Dublin with angry shareholders demanding an explanation for the still escalating debacle.
Ryanair CEO Michael O’Leary admitted at the meeting that the firm was at fault and apologised to all shareholders in attendance for the “major management failure”. However, he added that the unions many Ryanair pilots are members of, were working against the budget airline.
The Ryanair trouble arose earlier in September when Ryanair alerted customers of some 2,100 flight cancellations in the coming three months. The reason for the planned cancellations was put down to the company not having enough pilots, as many had booked holidays for the autumn and early winter.
The cancellations translate into 40-50 Ryanair flights per day and affect 315,000 passengers. However, the story doesn’t end there.
Since passengers were alerted of the details of which flight would be affected, pilots have since responded to Ryanair’s bonus payments offers for working overtime. Flight captains have been offered £12,000 and first officers £6,000 for working overtime to help limit the number of required cancellations.
Some pilots have rejected Ryanair’s offer, which means even more flights may need to be cancelled. The reason behind that rejection are mixed. Some pilots were said to be hoping for a permanent pay increase, in addition to the bonus.
The budget airline is notorious for trimming the price it pays for everything and that’s likely reflected in the wages it pays its staff.
Ryanair’s O’Leary has told shareholders that 75% of passengers with cancelled flights have been rebooked and refunded. This is expected to rise to 95% by the end of the week. O’Leary also said he didn’t anticipate this crisis would affect the company’s previous earnings guidance.
However, the Ryanair share price has already fallen some 10% and if a sustainable agreement between Ryanair and its pilots can’t be agreed, there’s little to stop it from falling further.