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Ryanair Faces Risk of Another Major Strike at Month-End


Per Reuters, Ryanair Holdings plc’s RYAAY cabin crew across five different countries have warned of a possible strike late in September, if the airline fails toprovide better working conditions.

Following this news, shares of the company closed 2.6% down on Sep 7.

Last Friday, unions representing cabin crew in Italy, Portugal, Belgium, Spain and the Netherlandssent a joint letter to the company, threatening to launch the largest ever protest in case it does not improve work environment. The unions are expected to stage a walkout by September-end, for which, a decision will be taken by Sep 13. Pilots and ground staff across Europe will be asked to join the protest march besides the Irish union also consisting of pilots.

The cabin crew is primarily protesting against the airline’s usage of a common Irish law (except for U.K.-based employees) for all its employees regardless of the country they are based in. The employees want a contract governed by the local law.

Ryanair Holdings PLC Price

Ryanair Holdings PLC Price | Ryanair Holdings PLC Quote

Although this seems to be a modest claim by the unions, Ryanair’s chief executive Michael O’Leary is of the idea that the common Irish Law is crucial for the carrier’s low-cost model and its ability to conveniently transfer employees from one place to another as and when needed.The carrier fears that imposition of local contracts might adversely impact costs and productivity of the business and thus trigger complexities.

However, Ryanair’s board and management are ready to recognize unions and address issues concerning their staff, provided its operational model is not affected in the process, i.e, it is able to offer low fare tickets to its customers and stick to its low cost model.

On this front, it is to be noted that Ryanair recently dissolved plans to cut down its Dublin fleet by six aircraft. The event followed after pilots in the region unanimously voted in favor of a deal backed by their trade union. This dispelled the risk of more than 100 pilots and cabin crew losing their jobs.

Zacks Rank & Key Picks

Ryanair carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the broader Transportation sector are SkyWest, Inc SKYW, C.H. Robinson Worldwide, Inc. CHRW and Trinity Industries, Inc. TRN. While C.H. Robinson holds a Zacks Rank #2 (Buy), SkyWest and Trinity sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of SkyWest, C.H. Robinson and Trinity have rallied more than 62%, 32% and 20%, respectively, in a year.

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