Passenger growth at Ryanair runs into turbulence

Ryanair posted another year of slower passenger growth as the discount carrier’s battle with unions, bad weather and industrywide air-traffic-control strikes took a toll.

Passenger numbers for the 12 months through December rose 8 per cent to 139.2 million tickets sold, Ryanair said on Thursday. Even with the addition of Austria’s Laudamotion, in which the Irish airline took a 75 per cent stake in August, the increase was smaller than 2017’s 10 per cent and the 17 per cent gain registered in 2016.

After the complegtion of the Laudamotion deal, Ryanair announced a doubling in size of the airline’s fleet. Laudamotion will expand from nine aircraft to 18 for this summer with the addition of nine Airbus A320 aircraft. The Austrain carrier’s workforce will also expand from 500 to 800 this year, Ryanair said.

But the slower passenger growth comes as rivals posted gains. Smaller carrier Wizz Air reported a 20 per cent passenger jump in 2018. The Budapest upstart has stepped up its challenge to Ryanair and easyJet by tapping faster growth in eastern Europe and boosting its presence in key markets such as the UK.

In October, Ryanair cut its fiscal 2019 profit guidance by 12 per cent, citing labour strife and fuel costs. After a run-up early in the year, fuel prices have been decreasing - although some airlines locked in higher prices via hedging and have not been able to take advantage of the drop.

The carrier has suffered a spate of strikes, and the troubles with its unions are not yet over. Cabin crew in Spain have called for three days of strikes on January 8, 10 and 13. The unions were due to meet with the company on Thursday, although it was unlikely they would reach any agreement, Spanish union USO spokesman Pedro Alzina said.

The unions are demanding local contracts under local law rather than the Irish contracts Ryanair uses widely.

It was “disgusting” that Ryanair “continues to refuse to accept national law with all its consequences”, USO representative Jairo Gonzalo said.

Europe’s biggest low-cost airline only began recognising unions for the first time in its 30-year history in December, to avert mass strikes during the busy Christmas period.

In July, strikes by cockpit and cabin crew disrupted 600 flights in Belgium, Ireland, Italy, Portugal and Spain, affecting 100,000 travellers.

Then on September 28, cabin crew walked out again in Germany, Belgium, Italy, the Netherlands, Portugal and Spain and in some countries pilots’ unions also took action.

The budget carrier has so far managed to clinch labour agreements with staff in several countries including Britain, Germany, Portugal and Italy.

Spain is Ryanair’s third biggest market. The airline has 13 of its 89 bases in the country.

Ryanair cut 20,000 flights from last winter’s timetable following a pilot staffing crunch that also triggered the unionisation push among crews, putting a brake on growth. Still, occupancy levels remain healthy with an average 96 per cent load factor for 2018.

Investors in the carrier will be hoping for a better year after the stock dropped 29 per cent in 2018, its worst performance since the global economic slump of a decade earlier.