German investigators have raided six Ryanair bases as part of an investigation into claims of systematic evasion of income tax and social security payments involving pilots flying its planes.
At least 35 prosecutors and customs investigators quizzed pilots and other staff at Ryanair hubs across Germany on Tuesday, including Berlin and Cologne.
After questioning pilots about their employment relationship with Ryanair, investigators seized computers, iPads, rosters and other documents. According to reports, at least two pilots’ homes were also searched.
German prosecutors in the western city of Koblenz said the raids were part of an investigation into two British personnel agencies that supply Ryanair with staff, who then work for the airline as self-employed pilots.
The personnel firms are accused of withholding pilots’ salaries and taxes, while pilots are accused of skimping on their social welfare contributions.
Ryanair confirmed in a statement that it had met with and agreed to assist German tax authorities into their investigation of contractor pilots.
“Ryanair requires all of its pilots, both directly employed and contractor, to be fully tax compliant at all times,” said the airline. “The German tax authorities have confirmed that Ryanair is not the subject of any tax investigations.”
However, German investigators said Ryanair’s business model was a central part of the investigation, in particular whether, by not directly employing pilots who fly its planes, the airline saves considerable tax and non-wage costs.
Two British personnel agencies –
and McGinley Aviation – supply Ryanair with pilots on a self-employed basis. Around 1,600 such contracts exist, according to German media reports, allowing the airline pay pilots only for hours in the air, while saving on social welfare payments and sick pay. European pilot representative groups argue that squeezing costs in this way makes it likelier that a sick pilot will fly, with knock-on safety concerns.
"We hope that these new investigations will, in the end, lead to the end of an unfair employment model," Mr Jim Phillips, head of German pilots' organisation Cockpit, told Zeit Online.
Ryanair rejects that there are concerns arising from its business model and points to its high safety record.
The intensive questioning of pilots in Germany on Tuesday included questions on how their working relationship with Ryanair came about and whether they flew for other airlines.
Germany’s public health insurer has already indicated it doesn’t believe the pilots in Ryanair cockpits are self-employed and is pursuing Brookfield Aviation for outstanding sick pay, pension, accident and unemployment insurance payments.