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Ryanair should reflect on why it is getting flak

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Olaf Storbeck
Last Updated : Aug 18 2013 | 11:05 PM IST
Ryanair often uses controversy as a marketing tool. The airline's chief executive Michael O'Leary has even suggested making passengers pay for using the toilet. But controversy isn't always good publicity. The latest storm concerns safety, and it is not Ryanair that has put it on the agenda.

The airline has an impressive 29-year safety record. The Irish Aviation Authority, its supervisor, says Ryanair is "on a par with the safest airlines in Europe". In March, Spain's aviation watchdog released a review into emergency landings of some Ryanair flights. It said the carrier "tends to minimise the amount of fuel" on its planes, leaving "none for contingencies below the legal minimum" - a portrayal Ryanair disputes. However, the authorities said Ryanair met the legal requirements.

Now, a body claiming to represent half of Ryanair's pilots is stoking safety concerns. The Ryanair Pilots Group conducted a survey purporting to find that most of its members would deny the airline had an "open and transparent safety culture". Ryanair has vigorously rebutted the claim, saying the "so-called pilot survey" was "fabricated" by staff at competitors.

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Investors, who have pushed the shares down seven per cent this week, are rightly worried about the quarrel. The noise could deter some passengers from flying. And if there is ever a safety incident - whatever the cause - the reputational damage is likely to be greater.

The dispute is evidence of extreme tension in the relationship between Ryanair and the European pilot force. For years, O'Leary has fought efforts to unionise the airline. Some 70 per cent of Ryanair pilots are self-employed contractors without the benefits of permanent employment. In April, management sent a memo warning of possible dismissal if pilots signed an RPG petition seeking an evaluation of how Ryanair's employment model affected flight safety. This week, Ryanair fired a pilot voicing concerns about Ryanair's safety culture to Channel 4 television. It said the move followed "defamatory contributions".

An iron-fist approach fits with Ryanair's low-cost model, but is not cost-free. Research on some manufacturing industries suggests fierce labour disputes can have severe repercussions on product quality.

Nor is it clear that Ryanair's like-it-or-lump-it employment philosophy pays off. A Ryanair presentation last month showed its non-fuel costs per seat are 89 per cent, or euro 25, lower than unionised rival easyJet. Just euro 3 of this advantage is from staff costs. A calm assessment suggests this tiny sum is just not worth all the trouble.

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First Published: Aug 18 2013 | 9:22 PM IST

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