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Die Zeit - Ryanair Article - 18072013 English Translation

Die Zeit - Ryanair Article - 18072013 English Translation

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Published by RyanairPilotGroup
July 2013 - Ryanair - Die Zeit Article.

Author Claas Tatje

This article takes a view of business model of Ryanair and the implications for its staff / wider society.

Copyright © 2013 PMG Press-Monitor GmbH
July 2013 - Ryanair - Die Zeit Article.

Author Claas Tatje

This article takes a view of business model of Ryanair and the implications for its staff / wider society.

Copyright © 2013 PMG Press-Monitor GmbH

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Published by: RyanairPilotGroup on Aug 02, 2013
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09/06/2013

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Die Zeit on 18.07.2013 Author: Claas TatjePages: 19 and 20Section: BusinessCategory: weekly paper Year: 2013 Number: 30Edition: 627,430 (printed) 519,573 (sold)543,041 (distributed)Range: 1.70 (in million)
The main thing is it’s cheap
The success of the airline Ryanair is based on efficiency andexploitation. But now the business model is at risk 
The man who gave Europe’s jet setters the cheap flight himself is happiest when he isat home on a farm with his four children. He got a taxi licence to get home quicker inthe evening –this allows him to drive in the bus lane, saving him 20 minutes on the100 km trip from Dublin airport to his palace-like estate Gigginstown. Ryanair bossMichael O’Leary enjoys rural bliss. Not only do the 8000 plus employees of Ryanairlead much less luxurious lives, some days life at Ryanair can be Hell on Earth.Take 4
th
July, for instance. At 12 o’clock two dozen pilots meet in Weeze on the LowerRhein. Their employer has called a staff meeting. The invitation came with 24 hours’notice by intranet. According to those at the meeting the manager dispatched fromDublin came straight to the point: Ryanair was planning to operate with 40 fewerpilots in the winter at the site. This left the employees with threeoptions: unpaidleave, part time work or change sites. Anyone who had not decided within a week  would be fired or made redundant. There were no memos or other documents on thematter. The news was to be spread by word of mouth. Ryanair confirms that there was a staff meeting, but provides no details.
O’Leary used to be the tax advisor for the founder of the airline, Tony Ryan
Ryanair is not facing a crisis –quite the opposite, in fact. In the business year to theend of March the company earned more than any other European airline. The profitafter tax was 569 million Euros, with turnover standing at some 5 billion. Theshareholders were to receive one billion euros –in the form of dividends and share buybacks. It seems as if only the other airlines were fighting for their future.Lufthansa or Air France, for instance, which have to save billions. And in Paris, of allplaces, Ryanair ordered 175 new Boeing aircraft. While Air Berlin’s passenger listsare shrinking,Ryanair plans to transport some ninemillion passengers in Germany in 2013, 80million throughout Europe, more than any other airline, and all this with stablegrowth figures of three percent. O’Leary has sat at the helm of Ryanair for 20 years.
 
Tony Ryan, who has since passed away, promoted the man who was once his taxadviser and financial consultant and made him head of the airline. Back then,Ryanair followed along the lines of Aer Lingus and British Airways. “The aim was todemand the highest possible prices”, O’Leary explains today.It was not until Ryanair pursued a course of cheap tariffs that it saw success. And it was from this success that the boss in particular has reaped the benefits. O’Leary holds some four per cent of the shares, and his estate is now worth more than 350million Euros. An air attendant in his company, on the other hand, can earn as littleas 900 Euros a month in winter. Thus far O’Leary has used clever marketing tocreate a company image, where Ryanair has been able to rise to become one of thelargest airlines in Europe thanks to quick company procedures and flight operations working outside the realm of the large and expensive air traffic hubs. In actual factthe success that is Ryanair is the result of ruthless penny pinching to the detriment of staff andtax payers.But now this business model is in the firing line. For the first time in the company’shistory the employees have gone on the defensive and are joining forces. The pilotunions are confident that the flight captains and the officers will now join together tostrike for shorter working hours and higher wages. The mood among cabin crews hasalready hit rock bottom. Many of them now have to pay higher social contributionsfollowing new European laws that have come into force for cabin crew staff. Thereare court cases running to challenge this in France. Added to this is the fact that thefuture for regional airports, which are important for the success of the cheap airlines,is uncertain. The Brussels competition watchdog has just presented tighterrequirements for government support for these airports. Many of them would not beable to survive without subsidies. They can hardly keep themselves afloat fromRyanair alone. Ryanair, in turn, will not be able to maintain its competitive prices without these subsidised airports. So indirectly the tax subsidies benefit the airline.Michael O’Leary’s biggest problem at the moment, however, is the growing unrestamong staff. And this could soon reach an unprecedented level. Last week 25 pilotsmet in the conference hotel Klostergaten in Kevelaer near Weeze. They want to dosomething against the unpaid leave, the part-time work and the relocation that themanagement wanted to enforce at the beginning of July. The Ryanair Pilot Group(RPG), an initiative of European pilot unions, sent its advisers. “I have nothing elseto lose, I want the union”, says one young pilot in Weeze.Two weeks ago the RPG voted in its first interim council. According to theorganisation, already more than 50 per cent of the 3500 or so Ryanair pilots have joined. Evert van Zwol, chairman of the interim council of the RPG says: “There is agreat sense of enthusiasm among the pilots.” He does not want to shy away fromconflict with Ryanair. “If the management does not strike up negotiations with theRPG, we will respond. And we will resort to strikes.”The Ryanair Pilot Group –a union for Ryanair? This is unimaginable for MichaelO’Leary. In an interview with ZEIT at the end of May he said “The RPG does notexist.” The company boss generally does not hold unions in very high esteem because“they refuse to change, even if change is necessary”, he believes. At times, O’Leary sounds like a dictator. He sees himself more as someone who has made peoplehappy. “We have democratised flying”, he said. Nowadays, it is not only the rich that
 
get on board an aircraft, but also the shoe shiners from the airport terminal. “They can fly safely and on schedule across Europe for 30 or 40 euros, and don’t have topay 300 euros anymore”, he says.Cheap ticket prices have actually changed the world a little. Long-distancerelationships between Rome and Cologne have become easier. Stag nights are nolonger held in the local pub, but in Mallorca. And German civil servants nowadayshave the whole of Europe at their disposal in the quest to find their holiday home,rather than just the area around the Baltic sea.Internally, things are much less democratic. The Ryanair boss had almost his whole board management gathered for a meeting with the ZEIT in Dublin. And just ameeting with a simple employee from headquarters –that was off the cards. If anyone was going to say anything, then it was going to be Mol, according to the pressdepartment. Mol –that’s what they call Michael O’Leary.The 52-year-old, who went to a Jesuit school as a child, likes to be at the forefront of attention, if it is going to benefit the company. He once announced free blow jobs in business class if his company were ever to offer long-haul flights. And he often usesthe word fuck when talking about competitors. No gag is below O’Leary, providing itmakes headlines for Ryanair. He has a habit of spreading rumours about toilet fees inthe aircraft, and surcharges for the fat.
Many of the pilots are officially self-employed
To lure analysts and shareholders, he likes to talk big when it comes to facts andfigures. “We are going to increase passenger numbers to 100 million in the next few  years”, he announced at the end of May. Three weeks later he even promised 110million for investors. O’Leary will put his arm round any business partner’s shoulderfor photos. But for all this, this man who likes to put in an appearance in jeans, rolledup sleeves and trainers, has few friends in his job. Nor does he in the sector or inpolitics. And definitely not among the employees.“O’Leary always puts returns on income first”, says Lars Christensen, a pilot based in Weeze. And it’s the employees and their families that suffer. The young man with hisroots in Northern Europe does not want to use his real name in the papers. He isafraid he will be dismissed if he does.Christensen explains how the exploitation in the company works. He is not actually employed by Ryanair, but through an agent called Brookfield Aviation. He is a temp, who has hardly any rights. Furthermore, he was expected to found his own company.He was given a list of three tax advisers who work with Brookfield. So now he is anindependent contractor based in Ireland. He employs a secretary, employees andhires other people too. Buthe has never seen any of these people. All he does is fly planes.“I can hardly imagine that this is all legal”, says Christensen. He might well be right.In Koblenz, Germany, the public prosecution department is already investigatingostensible self-employment among pilots. Proceedings along this line againstRyanair have, however, been abandoned. The airline will not comment on this.

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