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Jet Pilot Might Not Seem Like a ‘Gig,’ but at Ryanair, It Is

Jet Pilot Might Not Seem Like a ‘Gig,’ but at Ryanair, It Is

By LIZ ALDERMAN and AMIE TSANG

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At a recent shareholders’ meeting in Dublin, Michael O’Leary, the chief executive of Ryanair, slumped into a leather chair and issued a mea culpa. Under his watch, Europe’s biggest low-cost airline had bungled its fall vacation schedule for pilots. Over 2,000 flights would have to be canceled.

To contain the crisis, Ryanair might cut a week of vacation from the airline’s 4,200 pilots — many of whom aren’t full-time employees but independent contractors. If they “misbehaved” by declining to help, he added, they would get no “goodies” in the future.

It wasn’t the first provocative comment from Mr. O’Leary, a pugnacious leader who transformed Europe’s airline industry with an aggressive cost-cutting approach that extended to the work force.

But this time, he prompted an outcry within Ryanair’s ranks. Days later, Mr. O’Leary was forced to announce an additional 18,000 flight cancellations, after some pilots balked about returning to the air.

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Employees have banded together to demand collective bargaining and more secure contracts, touching off a fresh clash with management. Last week, 59 pilots representing employees across Europe renewed those demands, adding that “pilots have had enough.”

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The tensions at Ryanair are flaring at a time when labor practices are being debated across Europe. As businesses look to squeeze costs, around a third of the European work force is now employed under contract, rather than as full-time, regular employees. Such employees don’t usually require the same level of benefits for health care, retirement and unemployment.

The European Commission is pushing for tougher social protections for this increasingly flexible work force. While the scrutiny has focused on gig economy companies like Uber, it is increasingly extending broadly to a contractor class that includes construction workers, accountants and even pilots.

Ryanair controls its expenses by using a mix of full-time employees and self-employed pilots recruited through outside agencies. It also issues Irish work contracts to cabin crew and senior pilots around Europe, arguing that they work in Irish-registered aircraft and not in the countries where they are based.

The approach helps Ryanair sidestep labor regulations and high social security taxes in many of the 33 countries where it operates, making its labor costs among the lowest in the European industry. Those costs run around 2 euros per employee per hour flown — less than half the costs of two rivals, easyJet and Norwegian Air.

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Michael O’Leary, the chief executive of Ryanair, transformed Europe’s airline industry with an aggressive cost-cutting approach that extended to the work force.

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Christopher Goodney/Bloomberg

European regulators have been investigating the employment agencies Ryanair used to recruit new pilots. In Germany and Britain, authorities are examining alleged tax evasion at the agencies. Ryanair’s use of Irish labor contracts have faced legal challenges in several countries that have accused the carrier of failing to pay social security.

The company’s practices are also feeding employees’ frustrations. In interviews, more than a dozen current and former pilots and crew members described demanding work conditions and atypical employment arrangements that made it difficult to voice complaints. Most agreed to speak on condition of anonymity, citing nondisclosure agreements in Ryanair contracts and concerns about jeopardizing their jobs.

“If travelers can fly for just 10 euros, they should know that part of that cost comes from the labor conditions of the airline personnel,” said Yves Jorens, a professor of social law at Ghent University and the co-author of an extensive 2015 report on work conditions in the European aviation industry.

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The uproar over vacations has emboldened employees to assert themselves. Hundreds of Ryanair staffers have sought to join European airline unions, form informal collectives and create a Europe-wide representative body to push for change. Unions at Southwest Airlines and American Airlines are offering help.

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Ryanair has vowed not to meet with or recognize any union. Its concern is that rivals are capitalizing on the flight cancellation episode to organize Ryanair’s pilots and crew members — a move that analysts say would hurt the company’s advantage in low labor costs.

Mr. O’Leary declined requests for an interview. But in letters and public statements, he repeatedly blamed airline unions and competitors, saying they tried to “demean and disparage our collective success,” a charge he has renewed in recent weeks.

Yet as rumors swirled that pilots were defecting to other carriers after the flight cancellations, Mr. O’Leary issued an impassioned plea. “Ryanair’s pilots are the best in the business,” he said in a message to employees last month, in which he also promised improved pay and better contracts. “I urge you to stay with Ryanair for a better brighter future.”

Pilot or L.L.C.?

When Robertus Van Boekel applied for a pilot’s job at Ryanair in 2009, he interviewed at Brookfield Aviation, a British personnel agency.

Ryanair rarely hired new pilots directly. Instead, they were told to take the unusual step of applying to Brookfield or McGinley Aviation, another British recruiter, and declare themselves as self-employed. I

Brookfield handed Mr. Van Boekel, who was based in Belgium, a list of Irish accounting firms and told him to choose one, according to a 2013 lawsuit that Brookfield brought against Mr. Van Boekel when he resigned to work at another carrier. The accountants made him a shareholder and director of a Dublin-based “service company” called Winged Foot Ltd. Brookfield then arranged for the company to supply Mr. Van Boekel’s piloting services to Ryanair, the suit said.

After German authorities began investigating Brookfield, Ryanair last summer turned to a new employment company to contract pilots, BlueSky Resources, set up by an agency called Crewlink that the carrier uses to hire flight crew. McGinley Aviation and Crewlink declined to comment. A spokeswoman at Brookfield, Elaine He, said it was no longer handling pilot recruitment for Ryanair.

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