Crew members and pilots for a number of airlines, united by their trade unions, went on strikes, claiming that airlines were mistreating their employees and that the working conditions were demeaning. The financial crisis of 2008 had a huge impact on air travel with decreasing numbers of passengers, flights and, as a consequence, profits. As an answer to the crisis, airlines opted to cut crew pay – at that time, it seemed like a reasonable solution.
However, there was a rapid increase in passenger numbers in recent years – and with growing numbers, the workload for pilots and crew members rose as well. Unfortunately, that did not reflect on the crew members’ salaries. When their issues were not met with solutions, strikes began. One can say that walkouts should be the last resort in the conversation between unions and airlines. However, it’s not known whether the parties had expended their options or the strikes were chosen as the easiest way to get what the unions want. Only one question left – what is the impact of strikes?
In general, strikes can have different effects depending on the time window between the announcement and the strike itself. Pilots in Ireland have to announce strikes at least 7 days in advance, while German pilots do it as little as 24 hours before the strike. The vaguest rules are in the Netherlands, where pilots can go on strikes with a 12-hour notice, leaving affected passengers with no time to rearrange their plans.
Recent strikes were well-coordinated: busy days were chosen in order to cause as much disruption and dissatisfaction as possible, crews went on strikes for longer periods, and strikes themselves were international, with pilots walking out in multiple countries at once. Such coordination is the key to massive media attention: it can shine light on the unfair conditions that caused the strikes and show the magnitude of impact that strike actions can have on airlines’ profits.
Over 1.8 million passengers were affected by strikes in 2018. Lufhansa had 90.000 passengers affected, TAP Air Portugal – 55.000 and Vueling – 37.000. But the main culprits were Air France and Ryanair with 1.2 million and 287.000passengers’ travel plans disrupted respectively.
The primary demand of Air France crew members was a 6% salary increase. The demand was changed to 5.1% immediate increase in the recent months. But the demands have not been met so far and unions are threatening with even more strikes. Ryanair was presented with a more detailed list of 34 demands that included a salary increase, better pay for sickness and parenting leave, and a more stable work schedule for pilots and crew members. Ryanair did not agree with the demands, claiming that the salary is competitive and not to be increased. In response to the latest strike in late September, Ryanair decided to close two German bases, letting go pilots and crew members.
Union strikes have a huge financial impact on airlines. At the beginning of August, it was revealed that the 15 days of strikes by Air France employees from February to May cut the profits of the whole Air France-KLM group by €335 million. IATA expects European airlines to post a profit for 2018 of €7.4 billion, cutting its forecast from €9.8 billion previously, although that is still up from €6.9 billion in 2017.
Strikes mean losses not only for the airlines, but also for the passengers. Most airlines refund the tickets or help the passengers with travel plans rearrangements, but what about compensation for disrupted flights? The article 5(3) of the directive EC 261/2004 sets out a clear rule: an operating air carrier is not obliged to pay compensation only if it can prove that the cancellation was caused by extraordinary circumstances which could not have been avoided even if all reasonable measures had been taken.
Strikes are noted as one example of such circumstances. However, in 2008 the European Court of Justice (ECJ) clarified the Recital 14 where it provided an indicative list of what could be considered extraordinary circumstances, depending on the facts of the relevant case (Wallentin-Hermann case, C 549/07). The ruling was once again validated in April 2018, when the Court presented a test for evaluating whether a strike is to be considered an extraordinary circumstance in the TUIfly case (Helga Krüsemann and Others v. TUIfly GmbH, joined cases C-195/17, C-197/17 to C-203/17, etc.). ECJ provided that for such to be established, the strike must not be, by its nature or origin, inherent in the normal exercise of the activity of the airline and beyond the actual control of the airlines.
In July 2018, The UK Civil Aviation Authority released a statement in regard to Ryanair passenger questions about the disrupted flights, encouraging travelers to claim compensations when company’s employees go on strike. “We note that the recent industrial action is not by Ryanair’s UK employees, but it is the view of the UK Civil Aviation Authority, taking account of previous Court rulings, that when a flight cancellation is caused by strike action by the airline’s employees, the airline is required to pay compensation to passengers in respect of the cancellation of the flight, if it has not warned passengers of the cancellation at least two weeks prior to the scheduled time of departure,” CAA wrote. In the meantime, Ryanair’s chief marketing officer Kenny Jobs stays set on the idea that pilot walkout was an “unnecessary strike action” and the airline insists the stoppages are beyond its control and says any such claims will be rejected.
Days after the latest strike in September, the low cost airline has announced it is closing two bases in November – one in Eindhoven, the Netherlands, and the other in Bremen, Germany – and reducing its fleet at Niederrhein, Germany. Arthur van de Hudding, president of Dutch pilots’ union VNV called this move “a declaration of war.” “If the Ryanair management thinks closing bases is a quick and cheap solution to labor unrest – and the court in the Netherlands sees it differently – they are naive at best and antagonistic at worst,” he said. Ryanair claims, that these actions “is a small but necessary response to these adverse circumstances,” that involve strikes as well as growing oil prices.
The aviation industry is now at a crossroad. The direction that airlines will choose to follow in the next months will determine the future of civil air travel. With the rapid growth in the need for effortless access to civil aviation, airlines have to focus on making sure this process is as smooth and efficient as possible. The focus could be directed to personnel management and cooperation with airports – if one part of the equation is stumbling, the whole process is in jeopardy. It seems that airports have the most difficulty adapting to increasing passenger flows because of the limited capacity. Efficient and disturbance-free airlines’ processes can help airports adjust to the growing passenger volumes. And here comes the importance of satisfied staff. A study from the University of Warwick found that happiness results in a 12% increase in employee productivity. This may be an additional goal of the employer.