Ryanair chief executive Michael O’Leary has clashed with rival Norwegian Air after the bombastic airline boss made unsubstantiated claims that the Scandinavian carrier may be financially vulnerable.
Norwegian’s chief executive Bjorn Kjos is understood to have been shocked after O’Leary said the Scandinavian company was ‘scrabbling around daily’ for cash and may not last another year.
Airline industry sources said O’Leary’s remarks were motivated by sour grapes.
Kjos is reluctant to be drawn into an undignified spat with O’Leary, but dismissed his remarks as ‘nonsense’.
‘You’re running out of cash,’ says Ryanair’s O’Leary. ‘Don’t be daft,’ Norwegian’s Kjos hits back
‘There’s nothing in these allegations,’ said Kjos. ‘We are very happy with the financial situation we have. This is Michael O’Leary’s style. He likes to project headlines.’
Ryanair has been mired in a series of public relations scandals after cancelling flights and ruining the travel plans of 715,000 passengers.
Sources said O’Leary was ‘scaremongering’ and the outburst was triggered by his fury over the defection of scores of Ryanair pilots to his Scandinavian rival.
Norwegian, which owns a £300million stake in a bank, has been expanding rapidly and has been busily opening new routes including one from Gatwick to Singapore last week. Plans for the near future involve Argentina, Chicago and Austin in Texas.
Kjos’s firm has recruited 400 pilots this year – including 140 from Ryanair. Airline sources insist Norwegian has not been poaching and said ‘market forces’ prompted the pilots to leave O’Leary’s firm.
O’Leary’s low-cost carrier, now Europe’s biggest airline, was last week locked in a showdown with the Civil Aviation Authority over the cancelled flights farce which Ryanair has blamed on botched holiday rotas. Analysts say the fiasco has wiped as much as £50million off Ryanair’s profits.
The CAA had threatened legal action over the cancellation of 20,000 Ryanair flights. CAA chief executive Andrew Haines said last week he was ‘furious’ that Ryanair had not complied with the law. He said the company should have offered passengers more money.
Take-off: Norwegian has been expanding rapidly and has been busily opening new routes
Ryanair said on Friday it had agreed to the CAA’s demands to clarify the compensation packages being offered to passengers.
The airline also took a swipe at BA and complained that the CAA appeared to have taken no action when that airline suffered a computer meltdown in May.
Market analysts said Ryanair’s expansion plans have been too ambitious and its stretched pilot rota has been put under more strain by the departure of the pilots.
Ryanair has launched roadshows from Brazil to Dubai in a recruitment drive, but sources said O’Leary’s ridiculing of his own pilots was not helping.
The Irishman said ten days ago: ‘I would challenge any pilot to explain how this is a difficult job or how it is they are overworked.’
Pilots still working for O’Leary are understood to be taking advice on the possibility of industrial action to force Ryanair to offer them better contracts. Daniel Röska, a broker at Sanford C Bernstein and also a former executive at Lufthansa, said: ‘The likelihood is that they just don’t have enough pilots to fly their planes.
‘Given their contract frameworks and working conditions, it’s a tough sell. Meanwhile, the US carriers are ramping up and are paying on a vastly different level.’