Marketing Strategy and Competitive Positioning pdf ebook

CHAPTER 16
Chief executive under pressure to settle 
disputes by Christmas
Ryanair customers suffered more disruption on Fri-
day after the European low-cost airline was forced to 
cancel flights due to a 24-hour walkout by pilots and 
cabin crew in Belgium, the Netherlands, Portugal, 
Italy and Germany.
One year after a rostering crisis that led Ryanair 
to recognise trade unions for the first time in its 
30-year history, the budget carrier is still struggling 
to overcome a long and bitter campaign by its staff 
for better pay and conditions in large parts of its 
network.
This has hit investor confidence in the company’s 
leadership. A growing investor protest led almost 
30 per cent of Ryanair shareholders to reject the 
re-election last week of David Bonderman, the US 
Ryanair cancels flights after strike by pilots and 
cabin crew
By Arthur Beesley in Dublin and Naomi Rovnick in London
Travellers at the Charleroi Airport in Belgium on Friday
Source
: John Thys/AFP/Getty Images.

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INTRODUCTION
Introduction 
This chapter takes marketing strategy further by considering strategy implementation, and 
particularly the role of internal marketing in enhancing and sustaining a company’s ability 
to compete. There are several different models of internal marketing that overlap to a degree 
and require clarification (since as a consequence there are a number of different roles that 
internal marketing can play in a company’s strategic development in different situations). 
There are important linkages to consider between internal marketing and certain of the 
issues we have examined earlier. Our focus in this chapter is on a company’s implementation 
capabilities and the essential fit between strategic choices and the ability to execute those 
choices. The ability to execute is perhaps the most critical capability of all. 
private equity tycoon who has been chairman of the 
airline for 22 years. 
About 250 flights were cancelled on Friday as a 
result of the strike action, ramping up pressure on 
Michael O’Leary, chief executive, to make good on 
his promise to settle the disputes by Christmas. 
The airline and its passengers also suffered a 
wave of strikes during the summer, among them a 
walkout in five countries that led to the cancellation 
of 400 flights on August 10. 
Customers whose flights were affected on Friday 
received text messages and emails from Ryanair. 
Those affected can either apply for a refund or 
change to another flight free of charge. But the com-
pany said it was not required to pay compensation 
under EU rules because the strikes were beyond its 
control. 
The Dublin-based airline has entered into agree-
ments with crew in Ireland, Italy and Britain and it 
has a recognition deal with one German union. 
But Mr O’Leary, who has long had fractious 
relations with cabin crew representatives, insists 
Ryanair will not ‘roll over’ in the face of industrial 
action by crew. He also said pay increases would add 
€200m to the airline’s annual costs. 
Some unions have sought the right to be hired 
under local law, seeking a change to Ryanair’s prac-
tice of recruiting under Irish law. Mr O’Leary has said 
the company has lobbied the Irish government to 
change the country’s tax law to facilitate such a move. 
Ireland’s double taxation treaties require Ryanair 
to employ crew under Irish law in line with the com-
pany’s registration of aircraft in the country. 
At the same time, Ryanair has blamed workers at 
rival airlines for stoking the disputes. 
In a complaint this week to the European Com-
mission, Ryanair claimed its talks with staff in 
some countries were being impeded by a ‘collective 
campaign’ involving the European Cockpit Asso-
ciation and the International Transport Workers’ 
Federation. 
On Friday, Peter Bellew, Ryanair’s chief opera-
tions officer, claimed Germany’s VC union, which 
had urged the German pilot walkout, was ‘con-
trolled’ by its competitor Lufthansa. 
Mr Bellew also said it had already agreed to arbi-
tration with the VC union over pay and conditions 
for its German pilots, who are seeking higher wages 
and improved contracts. 
‘This is another example of a strike being organ-
ised in Ryanair by association by a union controlled 
by competitor airline employees, despite the fact 
that Ryanair has agreed to arbitration,’ he said. 
The UK’s Local Authority Pension Fund Forum, 
whose members own about 1 per cent of Ryanair, 
said the airline had made ‘encouraging comments’ 
about the treatment of staff at its annual meeting 
last week. 
‘It’s up to the company to negotiate the details but 
we hope Ryanair will repair its troubled relationship 
with employees as soon as possible to end disrup-
tion for the company and its customers,’ said Paul 
Doughty, an executive member of the forum who 
spoke at the annual meeting. 
Source : from ‘Ryanair cancels flights after strike by pilots and cabin crew’, Financial Times , 28/09/18 (Beesley, A. and Rovnick, N.).
Discussion questions
1 
What are the potential issues here?
2 
What could be the link between relationships with employees and relationships with customers?

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