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The model of Ryanair in question

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With the strike of 10 August, the conflict escalated, and could force the irish company to review its copy low cost

For Ryanair, it is one of the worst nightmares. This Friday, August 10, the low-cost airline, the irish will be a strike of great magnitude : the irish drivers, belgians, swedes, germans and Dutch were all given the word to stop the work, causing the cancellation of over 400 flights and penalizing 55 000 passengers.

A first in the history of the filibuster of air, which thirty-four years of existence, has managed the feat of avoiding the social movements.

Since the beginning of July, the conflicts are linked together and not only among the drivers. On 25 and 26 July, it was the turn of the hostesses and stewards belgian, Italian, Spanish and Portuguese to disengage, to the detriment of 200 000 passengers. The goal of these employees are angry? Obtain better working conditions, wage increases, and especially the abandonment of the right to irish labour for the benefit of local contracts of work according to the country of affiliation of the staff, scattered in 22 european bases. These claims, if they were to be met, could pose a serious threat to the economic model of the group, now in full turmoil.

The machine ground to a standstill

The course without fault of Ryanair, which displays the last 30 years a growing insolent, suddenly had a hole of air in September 2017. The machine has started to flounder when the company had to cancel the 20 000 flights for lack of pilots available. This accident of course unexpected doesn’t disrupt a well-oiled machine. It also helped reveal the social unrest that prevailed within the company : the pace of the inferno, low wages, work contracts closer to the CDD at the small week to the COMMISSION.

Aware of the danger, the direction of the group then agrees to make efforts to extinguish the fire. Beginning in 2018, she does not hesitate to give real a pocketknife to the principles of low cost pure and hard : to retain drivers, she agrees to the increase of 20%. Better, for the first time since its inception in 1984, it calls on the unions of european drivers to the negotiating table. A revolution !

However, these signs of abating, is not enough. Worse, the recent historic decisions endorsed in order to avoid conflicts, and have instead emboldened the pilots and the cabin crew (hostesses and stewards), encouraging them to continue their approach. Today, they plan to go to the end to win your case. The management of Ryanair has beautiful replied by saying that the German pilots, for example, earn up to € 190,000 and the hostesses up to 40 000 euros (but the majority key a lot less) or threatening to transfer of the aircraft from Ireland to Poland, with the elimination of 300 jobs in Dublin, she can no longer do as if it were nothing.

Puzzle strategic

It is a real dilemma for the irish company if it meets all of the requirements of the employees, it could sign the end of the model low-cost. Indeed, if the irish law is abandoned, the company will have to pay taxes and social charges are much higher. In addition, it will have less flexibility to deploy a european base to another, the aircrew according to the vagaries of traffic. In these conditions, the policy costs down, the foundation of orthodoxy low cost, be affected, even though Ryanair has taken the lead in this area. A puzzle much more complicated to manage than the context is less favourable : the competition intensifies, with the outbreak of the low-cost airlines european as Vueling, Transavia or Germanwings, and the price of kerosene continues to soar, weighing even more on the profitability.

Get out of this bad situation without giving up the low cost

So what to do ? Laying everything flat ? If embourgeoiser by small keys as it has already begun to do ? The company, at the crossroads, seems to be embarrassed. The silence of its president and CEO iconic, Michael O’leary, at the time the strikes are in full swing, says a lot about the misgivings of the group. During this time, the stock price collapsed 20% in one year and quarterly earnings fell 22%. On the other hand, the company remains solid, it will release € 1.3 billion profit by 2018. And so far, she has always been able to get out of his bad situation. This time, she will have to more than ever show its ability to adapt, to transform itself in depth without totally abandon the model which enabled him to become the second european airline (number of passengers), after Lufthansa.

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