The political establishment are trying to gag pilots from giving evidence to a Dail Committee over the alleged unhealthy relationship that exists between the Irish Aviation Authority and Ryanair. But the pilots are back soon and will give evidence then.
Evan Cullen, the President of the Irish Airline Pilots Association was invited to address the Transport Committee on October 4th to address the underlying reasons why Ryanair had cancelled 50 flights a day, affecting the travel plans of tens of thousands of passengers.
However the day before Captain Cullen was due to speak, a solicitor’s letter arrived from a firm representing Ryanair. The committee met in private and decided that, despite the letter, they would hear from IALPA.
However after Captain Cullen started speaking there was an immediate kerfuffle about what he was saying and the chairperson decided that the IAA must be there to answer the charges. Captain Cullen was due to re-appear before the Transport Committee just over a week later.
But 24 hours before he was due to speak the meeting was cancelled without proper explanation. The question that arises is: what are the right wing parties trying to hide?
The Transport Committee is a public forum and the pilots were invited to address TDs about crucial problems in the aviation industry.
It is common for the committees to meet in private session as well before hearing from invited speakers. But the authorities seem to show a distinct nervousness about their testimony.
Are they nervous that the pilots’ evidence will shine a light on Ireland’s dysfunctional aviation regulatory system? Or might it help explain why Ryanair cancelled flights that affect up to 700,000 bookings.
THE IRISH AVIATION AUTHORITY
The IAA is a state agency with a dual mandate. These two mandates are directly in conflict with each other.
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It is charged with the regulation of safety and security.
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It also has a for-profit mandate based on charges for inspecting airlines.
As part of its commercial mandate, the IAA oversees 14 air operators, the largest of which is Ryanair, with over 400 planes.
It also holds a register for aircraft which are operated by airlines in countries other than Ireland. This unusual activity is closely related to Ireland’s role as a tax haven for the aircraft leasing industry.
In technical terms, the IAA is an Aeronautical Service Provider which means that it is an organisation that provides the service of managing the aircraft in flight or on the manoeuvring area. It provides Air Traffic Control in Irish Airspace and, in conjunction with the British NATS, controls North Atlantic traffic.
The IAA derives charges from these activities and in 2016 recorded a profit of €39,490,000 and paid its CEO, Eamonn Brennan a salary package of €344,000.
However at the same time as developing a partnership-for-profit relationship with airline operators, the IAA is also supposed to monitor their activities for security and safety.
The same CEO and the same board that derives income from services to key operators are also supposed to monitor the safety record of those same operators.
With one airline in particular, it appears to have an uncritical relationship.
RYANAIR
Ryanair operates a most peculiar model for hiring pilots.
Pilots are asked to join into companies which are registered in Ireland. The pilots did not form these companies. These companies then contract out their ‘services’ to pilot employment agencies, Brookfield International Aviation and McGinley Aviation.
The pilots are required to choose a firm of particular Irish accountants who set up the service companies of which the pilots become directors but minority shareholders.
After being contracted to Brookfield International Aviation or McGinley Aviation, the pilots are contracted to Ryanair. About half of Ryanair’s 4,200 pilots come through these agencies.
The airline pays the agencies based on block (flying) hours scheduled by Ryanair. The agencies offered to pay the pilots in any bank account outside the UK. The pilots’ contract also means that they are responsible for tax and social charges.
This system allowed Ryanair to pay pilots only for hours scheduled by Ryanair. Ryanair does not have to pay welfare payments, holiday pay, maternity pay or sick pay for these pilots.
A court case in Britain in 2013[1] heard that this was an elaborate mechanism to allow Ryanair to avoid giving pilots some of the protections of employment law.
The pilots’ contract designated them specifically as ‘self employed’ and they are in breach of their contract if they reveal any confidential information about Ryanair.
This form of employment is illegal in many EU countries. A form of bogus self employment to evade protections that should cover workers rights.
The use of Irish limited companies to employ pilots based in the UK and elsewhere has led to pilots with limited experience of the tax or social obligations of a company falling foul of different jurisdictions fraud investigators.
In Germany and the UK raids were staged on the offices of both Brookfield and McGinley in an effort to find evidence of tax evasion.
Seven weeks after these raids, Ryanair changed tack and began to use a new firm, BlueSky Resources Ltd, to hire German pilots. BlueSky Ltd will reportedly employ pilots who fly Ryanair aircraft on five-year contracts, deducting income tax at source.
The pilots who are based in Germany will pay German social welfare contributions. The status of pilots in other countries remains to be seen.
The overall result is that a considerable proportion of Ryanair pilots are in a vulnerable, precarious position where there is considerable uncertainty about their current tax and social insurance compliance, and little certainty about their future careers – particularly if they join a union or seek better pay.
THE PRESSURE ZONE
Ryanair have used this situation to subject many of these pilots to pressure – and the IAA has turned a blind eye. Here are some of its practices.
Fuel Loads: Ryanair set up a system to benchmark pilots against each other on their use of fuel. A twenty page table was produced with the pilots’ names, base, fuel burn, fuel target and percentage of use above or below the target.
The effect was like reading out school scores of children to pressurise them into competing with each other.
Pilots who were on precarious self–employed contracts felt the most pressure.
At a later stage Ryanair modified its system but pilots are informed when they burn more fuel than their targets and whether or not they are in the group that is considered to be burning too much.
Pilot Hours: Pilots are only supposed to fly 900 hours in any one year due to safety concerns that might result from fatigue. But Ryanair and Aer Lingus calculated these hours from the year as starting April 1st rather than the calendar year from January 1st.
This allowed them to get the maximum number of hours out of pilots during the busy summer season rather than spread evenly across the full year as required to minimise cumulative fatigue.
This caused difficulties when pilots transferred to another airline – as they had used up their legal quota of hours with Ryanair, using a different calendar year to their new employer.
They also had a tendency to greater use of 5/3 rosters – five days on three days off rather than 5/4 rosters in bases where pilots did not accept the base deals offered by Ryanair.
Sickness record Meetings: Brookfield International Aviation International convenes regular meetings with pilots to discuss their sick leave record in the preceding six to 12 months.
These meetings are attended by Ryanair managers. Pilots reported feeling intimidated before and after such meetings. There is therefore a danger of pilots not declaring themselves unfit to fly from the fear induced by these meetings.
COLLUSION BY IAA
Some of the above points can have implications for aircraft safety.
If a pilot is worried that Revenue authorities are investigating their tax affairs, this adds to stress.
If a pilot feels pressure to reduce use of fuel, this has potential safety implications in certain circumstances.
If a pilot is flying the maximum number of hours in summer and then goes on to a different company for the remainder of that calendar year, this had potential implications for safety.
If a pilot has a fear of reporting themselves unfit for flying, this has potential implications for safety.
Despite this the IAA, which is supposed to be the safety regulator, has systematically avoided addressing these issues.
· The IAA has delayed responding to pilot organisations when they have raised safety concerns. In the words of the Ryanair Pilot Group, their interactions with the IAA have been described as ‘aggressive, dismissive, unprofessional’ and bizarre.
· They have not properly dealt with repeated compliance failures on Flight Time Limitations.
· They have not dealt with complaints that crews encountered working days of up to 15 and half hours duration.
· The IAA was the only regulator in Europe to allow Ryanair and Aer Lingus to calculate their 900 hour limit from April 1st. The EU regulation that it should be calculated from Jan to Dec was meant to be enforced in July 2008. This was confirmed in Flight Time Limitations’ legislation (Reg. 83/2014), which entered into force on 18 Feb. 2014 and applies since 18 Feb. 2016.
· The IAA has known that Ryanair used a benchmark system on fuel usage that could pressurise pilots but despite potential safety implications did not stop them.
· The IAA has not intervened to deal with possible issues on the mental well being of pilots that arise from raids by German police and tax authorities on four Ryanair bases
· Unlike the British safety regulator, the IAA has not given clear and precise answers in a timely fashion to a query on carrying undocumented bags. The query arose because a Captain was disciplined for refusing to carry such bags.
· The IAA has not dealt with the implications of paying pilots for ‘scheduled block hours’. They have not examined the consequences of pilots reporting for work when unfit either from fear of punishment or not having sufficient funds at the end of the month.
· The IAA has not addressed the implications of a London School of Economics report on Airline Safety Culture. This found that:
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pilots of self-employed, temporary contracts report significantly lower safety scores than those on direct contracts.
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That only 57% of pilots on low cost airlines considered that safety related reports are treated in a just and fair manner
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That 76% of pilots on low cost airlines are often tired at work but that only 42% would make a fatigue report.
DEPARTMENT OF TRANSPORT
Under the IAA Act 1993 the Minister of Transport was legally obliged to ‘appoint a person to carry out an examination of the performance by the company (IAA) of its function in so far as they relate to the application of technical and safety standards’
Despite a legal obligation to conduct these examinations every three years, no examinations were conducted in 2007, 2010 and 2013.
Following repeated requests from the pilots union, IALPA, to comply with the law, an examination was conducted in 2014.
The full body of this report has not been made available to the public, and was only made available to the pilots association following lengthy and unnecessary challenges through the Data Protection Commissioner.
The Minister for Transport has also been made aware of the fuel league tables used by Ryanair but has not instructed the IAA to stop this practice.
REVENUE COMMISSIONERS
Pilots who question the practice of being contracted to work on a self employed/sole trader basis have been informed that this practice is approved by Irish Revenue.
They have no power to change the system and are given it on a ‘take it or leave it’ basis.
This is despite the fact that these pilots are not free to genuinely subcontract their work and all statutory training and checking is provided by the airline.
CONCLUSION
Irish law is being used by Ryanair to set up a precarious system of questionable self employment which has led to investigations by other countries.
There is ‘light touch’ regulation in the Irish aviation industry, which works to the detriment of workers in that industry. . It even showed up in how passengers were treated after Ryanair cancelled flights.
The Irish body that is meant to regulate for passengers rights , the Civil Aviation Authority (CAR) actually supported the actions that Ryanair took. It was only when the British equivalent threatened the company with court action that Ryanair agreed they would reroute passengers on other airlines.
The Irish Authority said little about how Ryanair were treating passengers whose flights were cancelled or about their rights to be re-routed on other airlines.
The chickens are now coming home to roost as some pilots either desert Ryanair or do not sign up for their precarious model of employment.
This is the real story that lies behind Ryanair flight cancellations. It is one that the establishment and a quiescent media want to hide. The next scandal may well be revelations of why these details have been so well hidden.