Turbulence looks set to continue at Ryanair
Cantillon: airline intends to cancel between 40 and 50 flights a day for next six weeks
It’s rare that Ryanair takes as many unanswered body blows. The events of the past few days have knocked over 5% off the company’s share price
Even for a group with as combative a corporate culture as Ryanair, it has been a bruising 10 days.
It seems a long time ago that proxy advisory groups ISS and Pirc were urging shareholders to vote down directors standing for re-election in a dispute over executive pay – particularly the lack of disclosure in how executive bonuses are determined .
Just seven days later Ryanair on Thursday found itself on the defensive over a ruling by the European Court of Justice on whether a number of former staff could take legal action against it in Belgium, where they worked, or only in Ireland as stated in their employment contracts.
Without ruling definitively the court dismissed the Ryanair contract provision as unenforceable, and found that the fact that the former staff had been based habitually at Charleroi airport was a significant indicator supporting a claim that local courts had jurisdiction.
The airline spun the outcome as a victory: the markets ruled otherwise.
But any victory it sought was rendered moot on Friday as Ryanair started cancelling flights wholesale without explanation.
In the circumstances the emergency landing by a Ryanair aircraft after it lost a nosewheel on takeoff at Stansted, also on Friday, passed almost unnoticed
Eventually, under pressure, the airline disclosed it intends to cancel between 40 and 50 flights a day for the next six weeks as staff catch up on holiday leave. Even then it gave details only of cancellations over this weekend, keeping longer-term booked passengers in the dark.
In the circumstances the emergency landing by a Ryanair aircraft after it lost a nosewheel on takeoff at Stansted, also on Friday, passed almost unnoticed.
It’s rare that the airline takes as many unanswered body blows. The events of the past few days have knocked over 5 per cent off the company’s share price.
Next week shareholders will get a chance to have their say directly at the company’s annual general meeting. The reputational damage of the decision to arbitrarily cancel thousands of flights is clearly a concern.
It’s set to be another turbulent week.