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Ryanair Holdings Plc recognized the union representing its U.K. pilots, reaching its first formal labor agreement in the discount airline’s history.
The 600 U.K. pilots directly employed by the carrier will be represented by the British Airlines’ Pilots Association, Ryanair said in a statement Tuesday. All 15 of its bases in the market — the company’s biggest — have also voted to accept management’s offer to lift pay by 20 percent.
The deal marks progress in Ryanair’s effort to quell labor unrest and improve relations with pilots who threatened to strike last year to gain union recognition. Under pressure, the company reversed its anti-union stance, but talks with some pilot groups, including in Ireland, have moved slowly. The U.K. accounts for about a quarter of the Dublin-based airline’s pilots and aircraft.
The deal shows “how serious Ryanair is about working constructively with unions that are willing to work constructively with us,” Chief People Officer Eddie Wilson said in the statement.
Still, he warned unions in other markets to “stop wasting time and act quickly” on its proposals. The airline is meeting with labor groups in markets including Ireland, Italy, Belgium, Germany and Spain.
The progress in the U.K. is somewhat offset by “concerns that Ryanair is heading to a showdown” with its Irish pilots, who appear to want to wrap the pay deal into a wider negotiation of working conditions, Mark Simpson, an analyst with Goodbody Stockbrokers in Dublin, said in a research note.
Shares of Ryanair fell as much as 1.1 percent and were trading down 0.8 percent to 16.62 euros at 8:08 a.m. in Dublin. The move pared the company’s gains this year to 10 percent, lowering its market value to 19.7 billion euros ($24.3 billion).
In the U.K., Balpa will open elections for five representatives who will lead negotiations on pay, hours and rosters, while a separate advisory group will be elected to represent crew employed as contractors, the union said.
“Given Ryanair’s previous hostility towards unions, today’s agreement is an historic one,” Balpa General Secretary Brian Strutton said in a statement. “While we were initially skeptical about Ryanair’s sincerity in offering recognition to us and other unions, our conversations and meetings with them have shown that they are genuine in wanting a constructive trade-union relationship.”
©2018 Bloomberg L.P.