Passengers board a Ryanair Holdings Plc flight at Dublin Airport, Ireland, on Wednesday, June 6, 2018. Companies are expanding in Dublin rather than the U.K. in a
Ryanair has sufficient pilot numbers to cope with a 30 per cent UK walkout © Bloomberg

Ryanair has always been a somewhat contrary airline. It penalises passengers who can’t print their own boarding passes (as much as €600, according to the Economist). It makes families pay extra to sit together (not always worth the €4, according to this columnist). So it’s perhaps not surprising that it only lands all its flights on time when its pilots are on strike.

At least, that’s how it seemed on Thursday. Despite nearly 30 per cent of Ryanair’s UK pilots taking the first of five days of strike action, the airline reported “97 per cent punctuality . . . without any disruption”. Before the strike, its on-time performance was 90 per cent. At one point, the only plane delayed at Stansted airport was one of rival easyJet’s.

Passengers may have been relieved, but shareholders will have worried about the cost. Before the industrial action, analysts at broker Liberum had warned: “The UK is the largest pilot pool within Ryanair, . . . we would anticipate material levels of disruption.”

RBC’s plane spotters suggested that the cost of this disruption, in lost revenue and extra expenditure, would be €30m over the five days, or 2-4 per cent of net profit.

For Ryanair, the potential hit to its p&l could not have arrived at a worse time — a bit like one in 10 of its flights when there isn’t a strike on.

It has just had to trim some of its full-year revenue guidance and those Bernstein analysts reckon it will need a 6 per cent rise in fares in the second half to achieve that — not easy with fares forecast to be 6 per cent down in the first half, and strikes now in the news. Delays to deliveries of Boeing’s 737 MAX aircraft have already cut summer 2020 revenue growth forecasts from 7 per cent to about 3 per cent, with a knock-on effect on earnings.

However, might the actual disruption to Ryanair’s profits prove as limited as the disruption to passengers? Two factors suggest it could.

First, the airline has the pilot numbers, and the pilot mobility, to cope with a 30 per cent UK walkout. It recently said it had 500 more pilots that it needs, partly because of the 747 MAX delays, and ironically because other union pay deals have cut resignations to “zero”, in effect. Nor are its pilots, unlike its passengers, likely to be going anywhere. RBC analysts doubt that 737-qualified pilots could find alternative employment right now as no major operators are hiring — Norwegian is overstaffed, KLM is fleet constrained and SAS is exiting the 737.

Second, revenue may yet surprise on the upside. While fares were down 6 per cent in the first half ancillaries were up 27 per cent (all those charges) and are expected to support overall revenue growth. Tighter capacity in the European market, exacerbated by the 737 MAX delays, may even help fares in the short term.

Buying Ryanair’s shares — 10 per cent cheaper since the UK strike ballot — might not be so different to buying (and printing) a ticket: a contrarian gamble that actually takes off.

A Rank recipe?

Casino Royale, scene 166.

James Bond, having defeated Le Chiffre at the poker table, retires to the restaurant to celebrate with Vesper Lynd.

Bond: I’ll have a dry martini: three measures of Gordon’s, one of vodka, half a measure of Kina Lillet, shake it over ice, then add a slice of lemon peel.

Vesper: Make that two.

Bond: And bring us some beluga caviar, then the lobster . . .

Head waiter: Yes sir, but I am afraid there may be a slight delay.

Bond: Why?

Head waiter: Well, the kitchen has just taken some rather large orders from Uber Eats and Deliveroo . . .

It is perhaps unlikely that Agent 007 would be building up an appetite over $10m poker hands at one of Rank Group’s Grosvenor casinos. Were he to do so, however, this is what he might find.

As part of chief executive John O’Reilly’s turnround plan, the company is seeking extra revenue streams from its assets — and casino chefs who are paid to work all night, but generally don’t, are an obvious place to start. So, now, their skills are for hire via fast food apps, and Rank is also trying new leisure-led casino formats.

It is equally doubtful that Vesper Lynd would frequent a Mecca bingo hall. Were she to do so, however, she would find attempts to appeal to her demographic. Rank is trying younger “night out” entertainment formats.

Some of these measures are working: the casino initiatives and cost cuts turned a 35 per cent fall in first-half operating profit into a 40 per cent rise in the second half. But with bingo footfall down and profit flat, group pre-tax profit fell 6 per cent to £70m.

What Rank needs is would-be Bonds skipping the restaurant altogether, and going home to play its virtual casino games. It regards its multichannel “wallet”, which lets punters play in its casinos and online, as key to catching up with digital rivals.

But with only 80,000 signed up so far, and marketing spend essential to winning clients from established players, it’s going to need pockets as deep as those of MI6.

matthew.vincent@ft.com

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