Ryanair Chief Executive Officer Michael O'Leary (pictured) made a personal pledge to improve pay and career prospects for the budget carrier’s 4,200 pilots amid concerns about a rebellion in the aftermath of its cancellation fiasco.
O’Leary, often dismissive of pilot demands, is seeking to soothe disgruntled cockpit crew with wage increases of as much as €10,000 and loyalty bonuses of up to €12,000 that are tied to "achievable" performance targets, he said in a letter to the employees. The appeal is aimed at keeping flight staff from bolting to rivals.
The changes “will transform your pay and carrier prospects in Ryanair,” O’Leary said in the 5 October letter, a copy of which was obtained by Bloomberg. "If you have or are considering joining one of these less financially secure or Brexit-challenged airlines, I urge you to stay with Ryanair for a brighter, better future for you and your family."
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The letter highlights the urgency facing O’Leary as he attempts to stabilize Ryanair after scrapping more than 20,000 flights, affecting over 700,000 passengers, because of a lack of available pilots. In addition to botched vacation planning, Ryanair’s bare-bones operations were further stretched as competitors poached crews.
"Michael O’Leary made a costly error by initially disrespecting the skillset of pilots, and in a rare move is being forced to backpedal, apologize and meet their pay demands," Darren McKinley, an analyst with Merrion Capital, said in a note to clients, adding that the measures could cost the carrier as much as 100 million euros. The move “reduces the risk of a mass exit at Ryanair by its pilots.”
Europe’s biggest low-cost airline will negotiate so that pay offers "don’t just match" but "exceed" rival carriers such as Norwegian Air Shuttle ASA and the UK's Jet2 which operate the same Boeing Co. 737 aircraft-type that Ryanair flies, O’Leary said.
Ryanair shares fell 2 per cent at €16.66 as of 11:08 a.m. in Dublin. That pared its gains this year to 15 per cent, valuing the company at €19.7 billion.
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