Ryanair’s Plan to Close a Dutch Base Just Got More Expensive

(Bloomberg) -- Ryanair Holdings Plc was prevented by a Dutch court from involuntarily transferring workers from Eindhoven, raising the cost of the carrier's plan to shut down the base following clashes with unionized staff.

• The decision in Den Bosch marks a setback for Ryanair, which recently recognized unions and is now in negotiations across Europe. The court ruled the carrier misused its power and lacked business reasons for the planned closure. It must continue to pay crew, even if they don't agree to relocate.

Key Insights

• Ryanair said it still plans to close Eindhoven on Nov. 5, while serving the market from elsewhere. Its 16 pilots who were part of the suit make a combined 171,000 euros ($195,000) per month, according to court documents, or more than 2 million euros a year.
• Ryanair canceled about 190 flights in Europe, including the Netherlands, in late September, citing planned strikes by crew. It said then that if the labor action continued, it would have to “look again” at capacity this winter and in summer 2019.
• One week later, the company announced the closure of bases in Eindhoven and Bremen, Germany. While the company cited higher costs and lower fares, the court said the earlier statements appear to show the move to be a sanction in response to earlier labor actions.
• This supported the position of Dutch pilots, who sued the low-cost airline, saying the intended closure and moving of pilots amounted to retaliation, following strikes the union said were designed to force Ryanair to abide by Dutch labor laws.
• Pressure is increasing more broadly on Ryanair to follow national laws. Labor ministers from EU countries including Germany and Italy warned the low-cost airline in a letter sent Wednesday it is exposed to legal risks and needs to reach agreements with trade unions.

Get More

• Ryanair Lowers Profit Outlook on Labor Strife, Fuel Costs
• Ryanair Loses Legal Bid to Stop Dutch Pilots Joining Strike

--With assistance from Benjamin Katz and Ellen Milligan.

To contact the reporter on this story: Ellen Proper in Amsterdam at eproper@bloomberg.net

To contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net, Christopher Jasper

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