Ryanair’s Bare-Bones Business Model Is Getting Even Cheaper
Yes, you read that right. Europe’s largest ultra-low-cost airline is cutting even more costs from its already-skeletal business model.
Ryanair is reportedly ramping up a new Poland-based subsidiary, Ryanair Sun, that will have even weaker labor rights for its workers than the Dublin-based airline’s staff has currently, which is still not a lot. For just more than a year, the budget carrier has recognized labor unions for its pilots and cabin crews. Those unions went on widespread strikes throughout the summer and well into fall, demanding better pay and work conditions and roiling the airline’s operations throughout Europe.
Now, the airline’s unions are reportedly furious because employment contracts for Ryanair Sun staff sidestep many of the hard-fought agreements executives acquiesced to the employee unions. For instance, Reuters reports that a key component of the new labor agreement is forcing the subsidiary employees into self-employed work contracts, thereby denying staff common rights like paid sick leave and unionization.
A workforce made up of self-employed contractors was previously a major part of the ultra-low-cost airline’s profit margin until employee unions fought against them and the lack of benefits the contracts offered.
The no-frills airline has already been strong-arming Poland-based pilots for the Ryanair Sun subsidiary. First, it laid off 100 pilots in Dublin as it moved 20% of its Dublin-based fleet to Poland. Airline executives told the pilots if they didn’t want to lose their jobs, they had to move to Poland. Then, the carrier liquidated its Polish base for its main airline and forced its Poland pilots to sign contracts under Ryanair Sun or risk being fired, the Irish Independent reports.
Poland will be an important outpost in the Eastern European market, where Ryanair sees most of its growth in coming years. There are few ultra-low-cost competitors in Eastern Europe, with Wizz Air virtually the only future rival for Ryanair in the region.
Polish authorities are reportedly investigating Ryanair Sun’s self-employment contracts because the nation has a law for companies to allow individual contractors to join unions.
Featured image by _jure / Getty Images.
Welcome to The Points Guy!