RealMoney by TheStreet.com
Ryanair Reaching on Web Crackdown
Thursday September 9, 7:03 am ET
By Peter Eavis, Senior Columnist
Discontent among Ryanair's (NasdaqNM:RYAAY - News) pilots must be a source of great concern to the company's chief executive, Michael O'Leary. Why else would Europe's largest budget airline have threatened a U.K.-based Web site with legal action if it didn't take down comments pertaining to Ryanair's pilots?
O'Leary has been one of the most combative CEOs to ever run a public company. He has launched abuse-ridden tirades against critics, airports, competitors and regulators. In July, he called the company that runs Stansted airport outside London a "bunch of overcharging rapists." Back in January, O'Leary labeled as "Stalinist" a European Union ruling that one of Ryanair's airport deals was anticompetitive.
But despite his penchant for dishing out insults and criticism, he doesn't seem able to tolerate any brickbats thrown his way. When the Professional Pilots Rumour Network, a Web forum popular with Europe-based pilots, posted a discussion thread containing a mixture of informed insights and raucous comments on Ryanair's relations with its pilots, the company's lawyers sent the Web site a letter demanding that it take down the thread. Howrey Europe, a law firm acting on behalf of Ryanair, sent the letter to PPruNe, as the Web site calls itself, on Aug. 24.
The letter argued that the statements on the thread were "untrue, unfounded, malicious and deeply damaging to the good name and trading reputation of Ryanair." The letter added that Ryanair would move to gain an "immediate injunction" against PPruNe and claim damages if the Web site didn't remove the thread, which discussed pilot unionization and pilot pay -- hot button issues for Ryanair right now.
PPruNe removed the thread, but a new thread has appeared on the Web site concerning unionization at Ryanair. Ryanair didn't immediately comment when asked why it acted to remove the thread. PPruNe owner Danny Fyne said: "Tactics like this never work in the long term. If we didn't publish it, someone else would."
After an earnings warning in January, Ryanair stock has been languishing and its ADRs are nearly 50% below their 52-week high. Wednesday they fell 38 cents to $30.43.
O'Leary has massively underestimated the harshness of competition in the European budget airline sector. Fares have slumped at a time when Ryanair was bringing on a huge number of new planes. That problem wasn't helped by the fact that Ryanair flies to many cheap, out-of-the-way airports that there is insufficient demand for. And after one of Ryanair's cheap deals with a remote airport was judged by the EU to break its competition laws, investors now wonder how many other airport deals may also become invalid.
To revive its fortunes, Ryanair has been doing all it can to cut costs and boost revenue. One sensible-seeming cost-cutting move is the fitting of non-reclining seats. But one move that is generating criticism, both among customers and in the market, is a wheelchair levy on every ticket that Ryanair said it was charging to cover the cost of transporting disabled passengers to and from its planes. The levy appears to still be in place. It's not clear if it is around 70 euro cents or 50 euro cents, but if it is the lower number, the levy accounted for around 22% of the increase in operating profits at Ryanair in its June quarter, compared with the year-ago period.
The wheelchair levy is a clear sign of desperation, but so are moves to cut the most basic of pilots' perks. One measure has Ryanair pilots buying their own uniforms. Cost-cutting ceases to have beneficial effects if it causes a company's best employees to leave. And discontent does seem to be growing. Ryanair management is currently waging a bare-fisted propaganda war to keep pilots from opting for their union to represent them in pay negotiations. In a recent memo, a Ryanair manager at Stansted airport said that paying union dues would amount to a waste of money: "If you want to waste 1,000 pounds we recommend fast women, slow horses or even greyhound racing. At least you'll have a few minutes of fun," the memo said.
Ryanair can always find inexperienced pilots eager to clock up miles, and it can employ them on a nonsalaried basis. But all airlines need a solid base of experienced pilots to meet aviation regulations and provide training. Ryanair cannot risk an exodus of these. And alleged hardball tactics may cause this to happen. Experienced pilots who need to receive expensive top-up training to fly Ryanair's new series of Boeings have been told that the company won't pay for their training if they opt for union representation, according to a person familiar with employee relations at Ryanair.
To be sure, the PPruNe thread that was taken down contained the sort moronic chatter common on message boards. But it also had some interesting viewpoints, including a calculation by a poster called "St. Savior" that showed that the removal of basic perks could erode the pay rises awarded to certain Ryanair pilots.
What does this mean for investors? Detox's take: Ryanair's revenue outlook must be so lackluster that the company is now trying to silence Web sites as part of an almighty effort to keep costs down.
Ryanair Reaching on Web Crackdown
Moderators: sky's the limit, sepia, Sulako, North Shore
-
Panama Jack
- Rank 11
- Posts: 3265
- Joined: Fri Feb 20, 2004 8:10 am
- Location: Back here
Re: Ryanair Reaching on Web Crackdown
For this reason, Ryanair will never have a problem finding staff:
Reminds me of this fine feathered friend:
Honestly, how many people reading this article would work for Ryanair, knowing what you know? I bet better than 90% of AvCanada readers would.Rebel wrote:Ryanair can always find inexperienced pilots eager to clock up miles, and it can employ them on a nonsalaried basis.
Reminds me of this fine feathered friend:
“If it moves, tax it. If it keeps moving, regulate it. If it stops moving, subsidize it.”
-President Ronald Reagan
-President Ronald Reagan
posted 15th September 2004 08:44
--------------------------------------------------------------------------------
two seperate but related articles
irelands' sunday tribune 12 september 200a
buisness section
"we haven't received any letter,but if we do i think it would get a pretty short reply.i think it would consist of two words:foxtrot oscar" ryanair boss micheal o'leary responds to reports that brussels is looking for return of the charleroi subsidies.
front page
"ryanair admits profits more important than punctuality"
ryanair has admitted publicly for the first time that profits are more important than getting its planes to their destinations on schedule.it has also been revealed that staff at the low fares airline are set a monthly target of money to acquire from passengers in excess baggage charges.
The information emerged in the course of an investigation into the dismissal of a ryanair employee for failing to collect a £50 excess baggage charge from a customer.while being cross-examined at the employment appeals tribunal,a deputy duty manager at the airline stated that "the collection of excess baggage charges was more important than the punctual departure of flights".
in her defence,the dismissed customer service assistant argued that she ushered the customer onto the early morning flight to beauvais without charging for excess baggage because to go through the manual process of charging would have delayed departure.
she told the tribunal that she "never saw the memorandum from the duty station manager about excess baggage being more important than getting passengers on the plane".she explained how other ryanair attendants "would bargain with passengers" over excess baggage charges and said the company "set a target of £1,000 per month" for each attendant to collect.
she said that she herself managed to collect £7,000 over eight days at christmas and didn't feel that there was any issue over her handling of the excess baggage charges.
The attendant was also disciplined by ryanair when she allowed
two asian passengers board a flight to charleroi in belguin even though they had invalid visas.as a result,the two passengers were refused entry and ryanair was forced to fly them back to dublin.the airline was also fined £6,000.
While the attendant had "contributed substantially to her dismissal" and the company had made "laudable attempts to deal with the matter",the employment appeals tribunal awarded her 700 euros.
--------------------------------------------------------------------------------
two seperate but related articles
irelands' sunday tribune 12 september 200a
buisness section
"we haven't received any letter,but if we do i think it would get a pretty short reply.i think it would consist of two words:foxtrot oscar" ryanair boss micheal o'leary responds to reports that brussels is looking for return of the charleroi subsidies.
front page
"ryanair admits profits more important than punctuality"
ryanair has admitted publicly for the first time that profits are more important than getting its planes to their destinations on schedule.it has also been revealed that staff at the low fares airline are set a monthly target of money to acquire from passengers in excess baggage charges.
The information emerged in the course of an investigation into the dismissal of a ryanair employee for failing to collect a £50 excess baggage charge from a customer.while being cross-examined at the employment appeals tribunal,a deputy duty manager at the airline stated that "the collection of excess baggage charges was more important than the punctual departure of flights".
in her defence,the dismissed customer service assistant argued that she ushered the customer onto the early morning flight to beauvais without charging for excess baggage because to go through the manual process of charging would have delayed departure.
she told the tribunal that she "never saw the memorandum from the duty station manager about excess baggage being more important than getting passengers on the plane".she explained how other ryanair attendants "would bargain with passengers" over excess baggage charges and said the company "set a target of £1,000 per month" for each attendant to collect.
she said that she herself managed to collect £7,000 over eight days at christmas and didn't feel that there was any issue over her handling of the excess baggage charges.
The attendant was also disciplined by ryanair when she allowed
two asian passengers board a flight to charleroi in belguin even though they had invalid visas.as a result,the two passengers were refused entry and ryanair was forced to fly them back to dublin.the airline was also fined £6,000.
While the attendant had "contributed substantially to her dismissal" and the company had made "laudable attempts to deal with the matter",the employment appeals tribunal awarded her 700 euros.
