Key points:
- There are likely to be strikes on Ryanair's Spanish routes this summer
- The airline says it's no big deal – just a small union flexing its muscle
- The airline isn't worried about it, so why should we be?
Ryanair (Euronext: RYA) (NASDAQ: RYAAY) has just announced that it's going to be hit by strikes this summer. This was always a likely outcome of today's conditions and equally also a very unwelcome one.
The likelihood of strike action at Ryanair was always high simply because of the background to current events. With lockdowns and travel bans unions really did not have much power over matters. As reopening arrives they are likely to try and flex their muscles. This is compounded by the way that all the airlines – Ryanair, Easyjet, and so on included – are finding it difficult to expand staffing levels as fast as they'd like to. This is what is leading to those waves of cancellations that keep happening. They just can't get the staff and therefore what staff they do have gain greater power – that's when unions are likely to call strikes.
Thus the bad news for Ryanair, that strikes are indeed going to happen. On the other hand, this is possibly closer to good news. As Ryanair itself has pointed out it is only the Spanish unions that are calling for strike action. Further, it's a couple of the small Spanish unions. As Ryanair itself says:
In Spain, we are pleased to have reached a collective agreement with CCOO, Spain’s largest and most representative union, delivering improvements for Spanish-based cabin crew and reinforcing Ryanair’s commitment to the welfare of its cabin crew. Recent announcements by the much smaller USO and SITCPLA unions are a distraction from their own failures to deliver agreements after three years of negotiations and we believe that their strike calls will not be supported by our Spanish crews.
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They're largely claiming that there will be little to no disruption, therefore. This is possible. But the very fact that folk are even talking about strike action shows us that there's a risk to all of these airline shares. Yes, the industry went through some very hard times. Yes, they're largely bouncing back now. But the workforce doesn't seem to be all that cheerful about matters. There's a significant labour shortage in the sector and that always does tip power over to the workers and away from management.
This isn't to say that all airlines are about to become workers coops' of course. But, logically, we'd expect to see more of the revenue going to labour than we have in the past. At least until this staff shortage is solved. It's also possible that there will strikes – as here at Ryanair – or work to rules and so on as the labour unions try to flex their muscles.
As to the question about how bad this could get a reasonable supposition is that it won't. Get really bad, that is. None of the issues under discussion are worth a stand up fight over. This is about increments to pay, changes in seniority rules and allowances and so on. So there might be this week of strikes, yes, but there's not going to be a shutdown of the entire airline.
As Ryanair itself says, this set of strikes isn't going to change matters very much either way.
