The Ryanair Group received a heavy blow from the National Court of Justice in Spain: According to the judgment, the carrier has unlawfully dismissed the personnel stationed in Gran Canaria, Lanzarote and Tenerife and disregarded Spanish labor law. As a result, an extremely costly financial compensation for employees has now been ordered for the group.

For many years, Ryanair flew very well with the “one company concept”. This means that all FR flights were actually operated by Irish Ryanair. Exceptions were rare wet leases in which external airlines were temporarily hired. But this only seldom happened and mostly bridged the failure of machines or delivery delays by Boeing.

In recent years, the group of companies headed by Michael O'Leary has increasingly felt that the course of completely ignoring the unions is no longer tenable. One can certainly say that the persistence of the employee representatives has paid off, because O'Leary also had to admit that the previous path is no longer tenable.

“One Company” became several airlines

So a “Plan B” was chosen. Poland served as a kind of "test vehicle" because Ryanair Sun (now known as Buzz) was explicitly founded as a charter offshoot. Like a prayer wheel, the management of the Irish lowcoster emphasized that they only wanted to graze the Polish charter market. Industry insiders had doubts about this right from the start and the skepticism was appropriate: Polish Ryanair staff were soon given the choice: Either switch to Buzz on less favorable terms or no longer have a job. By the way, in most cases the employment takes place through the temporary employment agency Warsaw Aviation. But what happened before? In Poland, Ryanair agreed on collective agreements with the unions, which of course are no longer valid at Buzz, because other airlines are no longer valid.

Malta Air was launched under the guise of “paying taxes at home” and, for example, took over the flights operated by Ryanair itself in Germany, France and Italy. In the Federal Republic of Germany, among others, the Cockpit and Verdi association were able to ensure that the collective agreements were largely taken over. In other countries this was not the case, so that, according to those affected, allegedly lower wages should have come about.

The subsidiary Lauda Europe is a special case. In contrast to the sisters Buzz and Malta Air, this was bought and brought its own route rights, which come from the Niki legacy. Laudamotion was also initially allowed to fly under its own flight numbers and brand. Even Ryanair planes flew in wet lease under the Lauda fire. The Austrian Laudamotion was shut down as an airline and the Maltese successor Lauda Europe is now flying under FR flight numbers on behalf of Ryanair DAC. Another special case is Ryanair UK, because this subsidiary is necessary due to Brexit.

Switching to subsidiaries saves Ryanair a lot of money

The question of “why does Ryanair need so many daughters who fly under FR flight numbers” is simply answered: Because of the unions. For example, if you look at Prague, Budapest and Bratislava, but also Vienna, it is very clear what the subsidiary airlines are for. With every change of operator, the employee representatives are sent back to the start and Airline 1 quits, Airline 2 hires, which opens up the possibility of contract changes. For example, in Budapest, according to flight attendants and pilots, wages are said to have been lower. In the absence of alternatives, almost everyone switched from Ryanair to Buzz.

These “games” have already been played in Vienna. Pressure on Laudamotion staff via a Ryanair DAC base. After their employees had been squeezed out, the FR base in Vienna was closed at the end of 2020, but the Polish Buzz was immediately available as a replacement. The group currently has A320 aircraft operated by Lauda Europe and Buzz's Boeing 737s in Vienna. Malta Air and Ryanair DAC also fly in from other bases. At least in theory, as almost all routes are closed due to the corona pandemic.

The “multi-brand strategy” can therefore be summarized as saying that the switch to other group carriers, which then fly wet lease partners for Ryanair DAC, brings certain cost advantages for the group of companies. The staff has no advantages. In the present letters, which were sent to Vienna and Palma, for example, there was a threat of switching to other airlines in the group of companies if the deterioration was not approved.

Spanish court accuses "malicious acts"

In the Canary Islands, the reason for the closure on January 8, 2020 was argued that the delays in delivery of the Boeing 737 Max were the decisive factor. 134 flight attendants and 70 pilots were affected. At this point in time, Corona was not yet an issue. But what a surprise: some of the flight services were taken over by other corporate carriers such as Buzz.

The trade unions USO and Sepla took the dismissals to court and were now justified almost a year later. The National Court of Spain held that the mass dismissals were inadmissible under Spanish law. These would have no legal basis whatsoever and the notice period of just 15 days would not have been observed. The reasoning even mentions that the court is of the opinion that the management acted "maliciously".

It now follows that Ryanair was ordered to pay the salaries of non-wage costs for the period from January 2020 to March 2021. On top of that, the court stipulated that compensation in the amount of 15 working days must be paid per year of work. For 2020, an additional 45 days per working year must be added, and for 2021 at least 33 days. The bottom line is an extremely expensive matter, which is why it is to be expected that the Irish company will try to challenge the judgment legally. It cannot be ruled out that this could come to the European Supreme Court.