September 27, 2018 / 1:45 PM / 3 months ago

Ryanair to set up French hubs as German pilots join strike

BERLIN/DUBLIN (Reuters) - Ryanair (RYA.I) said on Thursday it would invest $400 million on establishing hubs for its planes at two French airports, returning to heavily unionized France after the airline’s decision to recognize unions.

FILE PHOTO: A Ryanair Boeing 737 aircraft approaches Paris-Beauvais airport in Tille, northern France, September 27, 2018. REUTERS/Christian Hartmann/File Photo

Europe’s largest low-cost carrier, which closed its last hub in France in 2011, has faced several months of strikes as a result of its decision in December to recognize unions.

Pilots and cabin crew in Germany are the latest to step up pressure over pay and conditions. German unions representing both said their members would strike on Friday, joining crews in Belgium, Italy, the Netherlands, Spain and Portugal, and bringing the number of flights canceled to almost 250.

Ryanair said when it made its announcement on union recognition in December that the decision would help it expand in countries where unions had a strong influence, like France.

On Thursday, the airline said it would base two planes in Bordeaux and two more in Marseille, using the airports as a hub to add 27 new routes to its summer 2019 schedule. The move would create 60 new Ryanair jobs in each location, it said.

Basing planes at an airport allows an airline to fly a larger number of flights per day from that location. Ryanair, which now has 86 bases, aims to fly 200 million passengers per year by 2024, up from a forecast 139 million this year.

Ryanair said in January it planned to double capacity in France in the next four years to about 20 million passengers, although it said continued strikes might force it to consider cutting short-term growth plans in other markets.

Ryanair had already canceled 150 flights scheduled for Friday due to the cabin crew action when it announced on Thursday that “under 100” flights would now also not operate in and out of Germany after the Vereinigung Cockpit (VC) called on pilots to join the 24-hour strike.

“No improved offer has been made since the last industrial action on Sept. 12. In addition, no conciliation agreement has been reached between Ryanair and VC so far,” VC said.

Ryanair Chief Operations Officer Peter Bellew told VC in a letter dated Sept. 26 and released on Thursday that the airline was ready to enter arbitration with the union.

Ryanair said VC had rejected three German candidates it had suggested for arbitrator and that negotiations should take four to five weeks, not the five months proposed by the union.

Germany’s services union Verdi, which represents around 1,000 cabin crew at Ryanair and had encouraged them to hold rallies on Friday, said its members would also join the walkout.

Ryanair has traditionally employed a large proportion of its staff under Irish law, which unions say inconveniences staff and impedes them from accessing local social security benefits.

The European Union executive backed Ryanair workers on Wednesday by saying they should work under contracts in the countries where they live rather than in Ireland where the airline’s planes are registered.

Reporting by Maria Sheahan and Douglas Busvine in Berlin and Frankfurt, Graham Fahy and Padraic Halpin in Dublin; Editing by Darren Schuettler, Edmund Blair and Alexandra Hudson

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