Silent Report & Shadow Report

Silent and Shadow Report: RyanAir
Silent Report
&
1
Shadow Report
Alice Hamling, Christopher Kololian, Zoe Lloyd, Zoe Yuill
(Honours Undergraduates, University of St Andrews, 2006/7)
Introduction
By law all UK public companies are required to disclose their year-on-year financial
performance in an accurate and timely manner. Whether or not these companies
disclose their social and environmental performance is a decision left to their
respective management teams. Despite the steadily-increasing popularity of social
and environmental reporting, most large UK firms still avoid the task. Reasons cited
by management teams for a lack of social and environmental reporting include cost,
time, confidentiality and inexperience (Gray et al, Approaches to Practice: The Silent
Accounts Project, 2006). The purpose of this exercise is to paint a more
comprehensive picture of a non-reporting company’s social and environmental
record. This is done through the use of two separate tools, a Silent Account and a
Shadow Account. The Silent Account extracts excerpts from the selected company’s
annual report and other public disclosures to show what a social and environmental
report might look like from the company’s perspective. The Shadow Account is a
compilation of various pieces of information found in the public domain that shows
what the company’s social and environment report might look like from the public’s
perspective.
The choice of the company on which the reports would focus on was a group
decision based on a number of factors. The company had to be a publicly-traded
company, ideally based in the UK or EU, that did not already issue a formal social
and environmental report. It was also decided that the company had to operate in an
industry that was of notable contemporary importance. This would not only facilitate
1
November 2006
Silent and Shadow Report: RyanAir
the process of collecting data, but it would also give the group the opportunity to
potentially contribute valuable work to the field of corporate social responsibility as
well as the industry of the selected company. For these reasons, the company
eventually selected by the group for a Silent Account and Shadow Account report
was the Irish commercial airliner Ryanair. Ryanair is a public company whose
shares are inter-listed on the Irish Stock Exchange and NASDAQ in the United
States. The company issues an annual financial report as well as quarterly financial
updates. It does not issue a formal social and environmental report, but it does
discuss both subject matters in its annual report and on its company website
(www.ryanair.com). The topic of commercial aviation is currently a contentious topic
in regards to its impact on the environment. The combination of carbon dioxide
emissions from aircrafts and the required infrastructural expansion of airports to
support ever-increasing passenger numbers has led many people to seek improved
reporting and accountability on the part of the aviation industry 2 .
For the
aforementioned reasons Ryanair was deemed a suitable company on which to focus
the report.
The purpose of this report is not to show Ryanair in a “good light” or “bad light”, but
merely to organise the existing pool of information on the company’s social and
environmental practices into something that might resemble a formal report. The
Silent Account is somewhat of a cut-and-paste exercise of Ryanair’s public
disclosures, which leaves little room for the inclusion of the researcher’s bias. The
Shadow Account, however, does open itself up to the possibility of editorial influence
simply by its very nature. The impartiality of the Shadow Account depends largely on
the diversity of the researcher’s sources of information. The group has made a
conscious effort to avoid bias in the Shadow Account by seeking data from a large
and diverse group of sources.
2
“Worldwide, passenger traffic is expected to grow by about 5% per annum and air freight by over 6%
per annum. The world fleet of aircraft is expected to double by 2020.”
http://www.aef.org.uk/campaigns
Silent and Shadow Report: RyanAir
Silent Report and Shadow Report
Silent Report
Shadow Social Report
The following silent report has been compiled directly from information provided in
Ryanair’s corporate reports and other documents issued directly from the company if
not stated otherwise. In addition to this, within the environmental section, headings
from British Airways have also been incorporated to highlight areas were one would
expect reporting. British Airways uses the GRI guidelines in compiling
environmental reports and so is considered an appropriate benchmark.
Mission and Policy Statements
Ryanair’s objective is to firmly establish itself as Europe’s leading low-fares
scheduled passenger airline through continued improvements and expanded offerings
of its low-fares service. Ryanair aims to offer low fares that generate increased
passenger traffic while maintaining a continuous focus on cost-containment and
operating efficiencies.
The following shadow report has been compiled with information directly available
on the public domain.
Mission and Policy Statements
N/A
Silent and Shadow Report: RyanAir
Employment Report
On the 31st of March 2006, Ryanair was employing 3,453 people. This number was
an increase from 2,717 the previous year. The increase in staff numbers was
attributed to the expansion of the aircraft fleet and the growth of the company.
Staff Policy
Staff Policy
Ryanair’s cabin crew must complete a 5-week training course costing £1400, which
they must fund themselves. After successfully completing cabin crew training with
one of the three approved training schools, Cabin Crew agencies can offer a fixed
term contract for 3 years with a Cabin Crew agency, whom are contracted to supply
cabin crew to Ryanair. They automatically receive travel benefits upon employment
with Ryanair. After 12 months on an agency contract, high performing cabin crew are
likely to have the opportunity to go on a Ryanair contract. This includes a pay rise,
share options and increased staff travel benefits. Employees are also eligible for
promotion as a Customer Service Supervisor. In this role employees have more
responsibility (managing a team of 3) and receive increased pay.
Dispatches, a channel four documentary programme filmed in 2006, interviewed
Ryanair employees who reported being unhappy with the Cabin crew-training course.
They complained that the training course was all geared towards passing an exam and
not about passenger safety. They were also unhappy about having to pay £25 per
month to wear the Ryanair uniform.
At Ryanair there are no planned overnights. If cabin crew are based at RomeCiampino they will start and end their day at Rome-Ciampino, barring technical
problems or exceptional circumstances.
Ryanair Pilots enjoy a stable 5 on, 4 off roster pattern comprising a week of early
shifts followed by a week of late shifts. This offers Pilots fixed days off and an ability
to plan their time off which is unique in aviation. Rosters are published 4 weeks in
advance.
Pilots are legally only allowed to work 900 hours in a year, and only 100 every
month. Some pilots from Ryanair reported that they are asked to work 99.9 hours a
month and the remaining 0.9 hours are sometimes used for an ‘emergency’ flight
which takes them over the legal requirements (Channel 4, Dispatches, Feb. 2006).
Ryanair requires a 5-year employment history a background check and a reference
from each new employee. In the Dispatches programme some new employees
reported that they had faked references from fellow employees they had only known
for a few weeks. They also reported that it was taking months for background checks
to come through.
Ryanair claims it is not anti-trade union, it is pro-employee. However, employees in
Italy and Spain are striking because Ryanair refuses to talk to their ITF affiliated
union (International Transport Worker’s Federation, Sept, 2004).
"Joint action by unions across Europe is a reaction to the company's appalling
treatment of workers. The O'Leary virus of disrespect for workers and passengers
has spread throughout Europe - and there will be Europe-wide consequences", said
Ingo Marowsky of the International Transport Workers Federation.
Silent and Shadow Report: RyanAir
Remuneration
Remuneration
Outstanding Earnings Potential
Cabin crew work 10 hour shifts providing there are no delays on their flights, 5/6
days in a row. Their pay works out at just £14 one way for a short haul flight and £19
one way for a long haul flight (Channel 4, Dispatches, Feb. 2006). .
Pilots are offered shares in the company after one year of employment with Ryanair
(Channel 4, Dispatches, Feb. 2006). .
Ryanair Pilots are recognised as the best paid short haul pilots in Europe. Senior
pilots in Ryanair have excellent remuneration packages as follows:
UK
Eurozone
Captains
Up to £100,000
Up to €130,000
First Officers (1,500 hrs)
Up to £70,000
Up to €80,000
Cabin Crew: Excellent earnings based on efforts - approx £1,100 / €1,400 net per
month (i.e. after tax)
Ryanair’s average pay rose to €49,612 which is among the highest average pay in
Europe and a higher figure than any other major European airline.
Pensions
Pensions
No information found on pensions, however there is an option of buying shares.
Ryan Air operates a share options scheme which has so far delivered individual gains
of over €250,000 to Ryanair pilots since they floated on the Stock Exchange in 1997.
N/A
Dividend Policy
Since its organization as the holding company for Ryanair in 1996, Ryanair Holdings
has not declared or paid dividends on its Ordinary Shares. Ryanair Holdings
anticipates, for the foreseeable future, that it will retain any future earnings in order
to fund the business operations of the Company, including the acquisition of
additional aircraft needed for Ryanair’s planned entry into new markets and its
expansion of its existing service, as well as replacement aircraft for its current fleet.
Ryanair Holdings does not, therefore, anticipate paying any cash or share dividends
on its Ordinary Shares in the foreseeable future.
Equal Opportunities
Equal Opportunities
Ryanair does not base employment on gender, marital status, race, age or disability.
Of the 3.453 total employees on the 31st of March 2006, these comprised of 25
different nationalities.
N/A
Health and Safety
Health and Safety
Safety Record
Ryanair have not had a single health and safety incident in 20 years. However they
have been surrounded in controversy over certain health and safety breaches.
Ryanair cabin crew have a 25mins turn around on each flight. That means 25 mins to
During its 20-year operating history, Ryanair has not had a single incident involving
major injury to passengers or flight crew. Ryanair’s commitment to safe operations is
Silent and Shadow Report: RyanAir
manifested by its safety training procedures, its investment in safety-related clean the plane, check life-jackets and all security. Cabin crew complained in the
equipment and the adoption of an internal confidential reporting system for safety dispatches documentary that they barely had time to pick up rubbish, let alone carry
issues.
out the required safety checks.
Ryanair’s flight training is oriented towards accident prevention and covers all Cabin crew have reported that during the exam for flight health and safety they were
aspects of flight operations. Ryanair conducts all of its own flight crew training, both allowed to sit it open-book because their instructors had no indication about whether
initial and recurrent, with the approval of the Irish Aviation Authority (the “IAA”), or not the text should be under exam conditions (Channel 4, Dispatches, Feb 2006).
which regularly audits both operation control standards and flight training standards.
In December 2002, Ryanair had to discipline a co-pilot after a flight at Stanstead was
All of the Boeing 737-800s which Ryanair has bought or committed to buy and the ‘flagged down’ on the runway so that he could get home (BBC News, Dec. 2002).
Boeing 737-300’s operated by Buzz Stanstead operate in accordance with the
Category IIIA minimum landing criteria, which require a minimum horizontal
visibility of 200 meters and no vertical visibility.
Ryanair has a comprehensive and documented safety management system.
Management encourages flight crews to report any safety-related issues through the
use of a confidential reporting system which is available through Ryanair’s and Buzz
Stanstead’s Flight Safety Offices.
The confidential reporting system affords flight crews the opportunity to report
directly to senior management any event, error or discrepancy in flight operations
that they do not wish to report through standard channels. The confidential reporting
system is designed to increase management’s awareness of problems that may be
encountered by flight crews in their day-to-day operations. Management uses the
information reported through the system to modify operating procedures and improve
flight operation standards.
Silent and Shadow Report: RyanAir
Customers and Products Report:
Business Policy
Business Policy
Ryanair will conform to all competition and antitrust laws enacted to prevent
interference with a competitive market system. Under these laws, no company /
individual may enter into any formal or informal agreement with another company /
individual, or engage in certain other activities, that unreasonably restrict
competition. Employees are required to report any instance in which a competitor
has suggested collaboration to their department head.
In 2004, the European Commission ruled that a deal between Ryanair and Charleroi
airport, 46 kilometres from Brussels, was illegal and amounted to state aid. The
agreement under scrutiny included the airport paying Ryanair €160,000 (£111,000)
for each of the first 12 routes opened by the airline to Charleroi, the pledging of
€768,000 to fund crew training, the provision of free offices to Ryanair and a total of
€250,000 to cover hotel and subsistence costs while the new facilities were set up
(Clark, 2003). A preferential rate of EUR 1 per passenger was charged for ground
handling services, with normal rates charged to other airlines ranging between EUR
8-13. The airport also offered landing charges about 50% lower than the standard rate
set in a decree of the Walloon Region (Bird & Bird, 2004). While local authorities
claimed they were trying to revive deprived areas, the commission ruled it unlawful
for Belgian taxpayers' money to be used in the deal. They concluded that “the State
aid involved could not be qualified as regional development aid taking the form of
investment in the airport infrastructure, but constituted illegal operational aid” (Bird
et al., 2004).
It is essential that Ryanair understand its competitors and be able to collect legitimate
intelligence about them. Ryanair employees must not obtain, process, use or disclose
confidential information of any third parties without appropriate authorisation from
the applicable third party. Employees must not use any illegal or unethical means of
gathering data about competitors.
Ryanair does not seek competitive advantage through illegal or unethical business
practices. All employees / directors should endeavour to deal fairly with customers,
competitors and employees. No employee / director should take unfair advantage of
anyone through manipulation, concealment, abuse of privileged information,
misrepresentation of material facts, or any unfair dealing practice.
The Commission considered some of the aid granted to Ryanair compatible with the
common market in the context of the transport policy. This includes the aid granted
to the start-up of new routes. “Concerning the other aid measures, in particular the
rebates on airport charges and ground handling fees, which amount to 25-30% of the
EUR 15 million initially given, the Commission asked Ryanair to reimburse them”
(Bird et al., 2004).
Customers
Customers
Customer Care
Customer Care
Ryanair is committed to fulfilling customers’ needs in an honest and fair manner. The
Company is committed to generating sales through price, quality and the ability to
fulfil commitments. In September 2006, less than one complaint (0.36) was received
per 1000 passengers. Of these, Ryanair responded to 99% within 7days.
By the top 20 airlines by number of complaints to Airtransport Users Council (AUC)
(1 April 2001-31 March 2002): Ryanair came third after British Airways and
AirFrance, with the AUC receiving 77 written complaints (BBC News, 2002). With
Ryanair carrying 11 million passengers in this time, complaints averaged at one per
225 000 passengers. BA, who carried 40 million passengers, averaged at one
complaint per 350 000 passengers (BBC NEWS, 2002).
Ryanair has “the lowest fares, the most on-time flights and the best customer service”
(www.ryanair.com, 2006)
In 2006, a poll of 4,000 travellers around the world voted Ryanair the world’s least
favourite airline. Unfriendly staff was cited as the main contributing factor, followed
by delays and poor leg room (Milmo, 2006).
Delayed/cancelled Flights
Ryanair updated passenger treatment in the event of a long day. Passengers are
Delayed/cancelled Flights
In February 2006, the Norwegian consumer protection agency, backed by consumer
Silent and Shadow Report: RyanAir
entitled to meal vouchers and hotel accommodation, which are delayed for reasons groups in Denmark, Finland and Sweden, petitioned Norway's commercial court, the
within Ryanair’s control. If your flight is cancelled or before the date of travel, is Markedsraadet, “over Ryanair's policy of charging high handling fees when
rescheduled so as to depart more than three hours before or after the original refunding unused tickets or transferring tickets between passengers”. Ryanair, failing
departure time then you will be entitled to a travel credit or full refund of all monies to improve on customer care, were subsequently fined 500,000 Norwegian kroner
paid if the alternative flight/s offered are not suitable to you. In September 2006, 79% (76,000 usd, 63,000 eur) for the unfair treatment of passengers (NTB news agency, as
of Ryanair’s flights were on time.
quoted in Nachrichten, 2006). Ryanair, under threat of court action, were given until
mid-March, 2006, to change its policy (Nachrichten, 2006). The carrier was also
criticized for “being unclear towards travellers about liability rights if planes are
delayed or baggage is destroyed, lost or damaged” (Nachrichten, 2006).
Baggage Handling
Baggage Handling
Ryanair's liability for loss, delay or damage to baggage is limited unless a higher
value is declared in advance and additional charges paid. Ryanair do not accept
liability for fragile, valuable, perishable articles or baggage, which is packed in
damaged or unsuitable containers (Ryanair’s Delayed or Damaged baggage). In
September 2006, Ryanair received less than one mislaid bag (0.63) per 1000
passengers (Ryanair customer service).
Many items of sporting equipment, large musical instruments and infant equipment
are considered by Ryanair to be inherently unsuitable for carriage by air. Upon
payment of an additional charge of £17/€25 (or local currency equivalent) per item,
per sector (flight) irrespective of weight, Ryanair is prepared to carry such items on a
‘limited release’ (i.e. entirely ‘at your own risk’ for damage or delay) basis.
Passengers should ensure that you have suitable private insurance cover in force for
such items (ryanair terms and conditions).
A British consumer watchdog ordered Ryanair to change its terms of contract “after
deciding the airline was unfairly turning down claims for lost or damaged luggage”
(Brignall, 2006). The Office of Fair Trading (OFT) has also told the company to
increase awareness in passengers of their rights in the event of delay or cancellation
(Brignall, 2006). The OFT, upon finding that Ryanair's stance on baggage liabilities,
had contravened the Montreal Convention. Ryanair's terms and conditions “excluded
damage to non-standard objects such as pushchairs, sporting equipment and musical
instruments carried in the holds of its planes. It effectively said they were carried at
the customer's own risk” Brignall, 2006). Ryanair has subsequently been ordered to
change its terms and conditions and to pay future claims. Furthermore the airline was
told to “make it easier for passengers to bring these claims” (Brignall, 2006).
Reduced Mobility Passengers and Blind/Partially sighted Passengers
Reduced Mobility Passengers and Blind/Partially sighted Passengers
For safety reasons Ryanair can only carry a maximum of four disabled/reduced
mobility passengers on any flight. This limit was originally agreed with the UK’s
Disability Rights Commission for safety reasons (BBC, 2005).
Requests for assistance must be made through Ryanair Direct on the same day as
your original booking. Failure to advise Ryanair of your requirements on the day of
booking will result in the service being unavailable on your arrival to the airport and
your being refused carriage (Ryanair terms and conditions of travel).
In 2002, Mr Ross, who has cerebral palsy and arthritis causing stamina problems,
was charged £18 for a wheelchair when he flew from Stansted Airport to Perpignan,
France. Supported by the Disability Rights Commission (DRC), Mr Ross brought a
case against Ryanair and Stansted, under Part 3 of the Disability Discrimination Act
1995 and was awarded more than £1,300 (BBC News, 2005). The Appeal Court
overturned the ruling that Ryanair was unlawful in charging Mr Ross for the use of a
wheelchair, however found that both Ryanair and Stansted were responsible for
providing a free wheelchair service for disabled travellers ensuring “disabled people
receive the same standard of service as non disabled travellers”. Thirty similar cases
were reported by the DRC, for whom Stansted Airport and Ryanair are to
compensate the passengers for the wheelchair charge (DRC, 2004).
In 2005, a group of six blind and three partially sighted passengers were ordered off a
flight at bound for Italy from Stansted Airport. After checking in as normal and given
priority boarding, a member of the cabin crew informed the group they had to leave
(BBC News, 2005). This was due to the flight being over its quota for disabled
people. Scope, a leading UK disability charity, has subsequently urged a boycott of
Ryanair (AEBC, 2005).
Silent and Shadow Report: RyanAir
In 2005, Ryanairs nomination for the prestigious Deaf-blind Friendly Corporate
Award was withdrawn by the charities, Sense and Deafblind UK. Ryanair had made
it to the last three in the travel and transport category of the awards. The judges
decided to withdraw the company’s nomination after Ryanair’s blind people incident
(AEBC, 2005).
Suppliers
Suppliers
For suppliers, Ryanair is committed to obtaining the best value on the basis of open
and truthful communication.
Ryanair serves fair trade on the basis of lowering costs. Ryanair considers the fact
that the new tea and coffee supplier is a Fairtrade brand a welcome bonus (Coyle,
2006).
Ryanairs Michael O’Leary recently ordered “his entire fleet to serve only Fairtrade
tea and coffee, which are generally regarded as more expensive than rival brands”
(Coyle, 2006). The fairtrade stamp guarantees “farmers and producers in the
developing world are paid a fair price for their crops (Coyle, 2006).
Silent and Shadow Report: RyanAir
Community Report
Airport Communities
Airport Communities
Ryanair is the European leader in minimising the number of people affected by noise
nuisance and lowering the volume of this nuisance. This has been achieved through:
the application of modern technology (all Ryanair aircraft comply with current noise
requirements and the use of winglets will further reduce the noise affected area at
airports by 6.5%) and the implementation of numerous operational measures; the
remote location of the majority of airports Ryanair operates from; the absence of
night operations; and compliance with all local noise restrictions.
Ryanair has been accused of damaging the charm of some of their smaller
destinations by giving budget travellers an easy way to reach these towns.
“A RyanAir route to Deauville, France may not go ahead as planned due to concerns
by the townspeople that an airlink would result in a flood of foreign tourists and
cheapen the image of their chic town.” (BBC News, 2006)
Ryanair is subject to international, national and, in some cases, local noise
regulations. EU and Irish regulations require that all aircraft operated by Ryanair
comply with Stage 3 noise requirements since April 1, 2002. All of
Ryanair’s aircraft comply with these regulations. Certain airports in the U.K.
(including London Stansted and London Gatwick) and continental Europe have
established local noise restrictions, including limits on the number of hourly or daily
operations or the time of such operations.
Corporate Citizenship
Corporate Citizenship
N/A
N/A
Philanthropy, sponsorship and education
Philanthropy, sponsorship and education
There are many demands being made on a daily basis, for Ryanair's support for
worthy organizations, charities and sponsorship needs. For 2006, Ryanair commit
itself to sponsoring Orbis Flying Eye Hospital. It is thereforeare not accepting any
further requests for the year.
Ryanair selects one charity to donate money to each year. This year Ryanair has
selected ORBIS as their charity of choice. ORBIS is a charity whose main purpose is
to raise money and public awareness on the problem of avoidable blindness in
developing countries. Ryanair set up collection points at Dublin and Stansted
airports during World Sight Day to raise money for ORBIT. (ORBIS, 2006)
Ethics to Customers, Suppliers & Shareholders
Ethics to Customers, Suppliers & Shareholders
Ryanair is committed to fulfilling customer needs in an honest and fair manner. The
Company is committed to generating sales through price, quality and the ability to
fulfil commitments.
Ryanair has been accused of using a levy on wheelchairs to bring in extra revenue.
(Chesshyre, 2006)
For suppliers, see customers and products report.
For shareholders, Ryanair is committed to disclosing the results of operations on a
timely basis and in a fair, accurate and understandable manner. Ryanair is dedicated
Former employees of Ryanair have criticized the company for the unofficial system
of firing employees. The former employees cited reasons such as “landing with too
much fuel” and “being ill” for losing their jobs. (Røed and Ebne, 2003)
Silent and Shadow Report: RyanAir
to providing a reasonable return on investment by pursuing sound growth and
earnings objectives while exercising prudence in the use of assets and resources.
Fair Dealing
Ryanair does not seek competitive advantage through illegal or unethical business
practices. All employees / directors should endeavour to deal fairly with customers,
competitors and employees. No employee / director should take unfair advantage of
anyone through manipulation, concealment, abuse of privileged information,
misrepresentation of material facts, or any unfair dealing practice.
Gifts & Entertainment
No gift, hospitality or other benefit should be accepted or given that could impair, or
appear to impair, an employee’s objectivity or impartiality. Employees are permitted
to accept gifts / entertainment of nominal value (approx. €100) and in a form such
that it cannot be construed as a bribe. Employees are prohibited from accepting
anything that is accompanied by any express or implied understanding that the
recipient is in any way obligated to do something in exchange for the gift.
Accurate Accounts & Records
All company books and records must be true and complete.
Employees must never knowingly create or participate in the creation of records that
are misleading or artificial.
Conflict of Interest
Ryanair respects the employee privacy in the conduct of his/her personal affairs.
However, all employees have a duty to ensure that their personal and financial
interests do not conflict with, or appear to conflict with, their duties on behalf of
Ryanair.
Political Activities
Political Activities
N/A
N/A
Silent and Shadow Report: RyanAir
Environmental Report
Environmental policy
Environmental policy.
Ryanair is currently the industry leader in terms of environmental efficiency. It is
constantly working towards improving its performance in an aim to prove that “air
transport can be environmentally friendly”.
With regard to environmental concerns, Michael O’Leary, Chief Executive of
Ryanair, states “the best thing we can do with environmentalists is shoot them”
(Plane stupid, 2006).
"A lot of lies and misinformation has been put about by eco nuts on the back of a
report by an idiot economist." He also claims that shooting cows would be a more
effective way of combating climate change than banning low cost air travel
(Harrison, 2006).
Climate change
Climate Change
Michael O’Leary, Chief executive, declares his intentions to increase carbon dioxide
emissions and advises those who are concerned about the environment to “Sell your
car and walk” (Clark, A; 2005).
Technology, Operational and commercial characteristics.
Ryanair has the youngest and most fuel-efficient fleet in Europe. Between 1998 and
2006, Ryanair reduced emissions and fuel consumption by almost 52%, which is
substantial compared to British Airways 27% improvement between 1990 and 2005.
Increases in fuel efficiency and reduced emissions have been achieved through
implementing the latest engine technology, for example winglets, efficient seat
configuration, and high load factors.
Between 1999 and December 2005 17billion euros was allocated to the replacement
of Ryanair’s fleet and an expansion programme. The environmental impact has been
significantly reduced with the new aircraft. New Boeing 737-800 “Next generation
aircraft” have replaced the older Boeing 737-200 resulting in a 45% reduction in CO2
emissions and fossil fuel combustion per passenger. The 107 Boeing 737-800 Next
generation fleet has high load factors and higher seat density compared to Boeing
737-800 ”Next Generation” aircraft used by traditional network airlines: Ryanair
aircraft all economy configuration has 189 seats, the Boeing 737-800 ”Next
Generation” aircraft two class configuration has only 162. The Boeing 737-800 is
designed to minimise drag and also has quieter engines. The 103 single aircraft type
fleet has an average age of 2.5 years, this compares with the IATA findings that
average world fleet age is approximately 11 years.
Ryanair takes pride in the use of under utilised secondary and regional airports
resulting in a reduction of emissions and fuel burn via reduced holding patterns and
Technology/ operational and commercial characteristics
Ryanair has the most up to date fleets world wide, during the last 5 years £5 billion
has been spent on renewing its Boeing 7375. Ryanair’s new planes burn 45% less
fuel, have reduced emissions by 50% and make 45% less noise than their
predecessors (Clark, 2005).
Ryanair is the Europe’s largest low fare airline. Under priced air travel, made
possible by the £9 billion in tax breaks, encourage flying instead of supporting
feasible, more environmentally friendly modes of transport. As air travel fares have
decreased by approximately 42% over the last 10 years, bus prices have increased by
42%. (Plane Stupid, 2006) having a disproportionate effect on the poorest in society.
Contradicting Michael O’Learys claims, recent economic studies imply that raising
air fares by 1.5% will result in a decrease in aviation travel. (Scenta nature and
environment news: 2006)
The Department for transport states that 45% of flights within Europe are less than
500km, and 70% within European airspace are less than 1000km, journeys of this
length emit up to 3 times more CO2 per passenger then rail (Plane Stupid, 2006) and
should not be encouraged considering global warming is, as Prime minister Tony
Blair acknowledges “the single biggest long term problem we face”(Friends of the
earth: 31/10/06) Contradicting Michael O’Learys claims, recent economic studies
imply that raising air fares by 1.5% will result in a decrease in aviation travel. (Scenta
nature and environment news, 2006)
Silent and Shadow Report: RyanAir
shorter taxing times. Point to point services reduce fuel burn and emissions: Ryanair There is no mention in Ryanair’s environmental disclosure of Nitrogen Oxides and
claims that the number of take offs and landings per journey are reduced from 4 to 2 water vapour which account for nearly 2/3 of aviation impacts on the atmosphere
as passengers are not required to transfer.
(Friends of the Earth quoted in Plane Stupid, 2006).
Emissions trading and Fuel tax/ emissions levy
Emissions trading and fuel tax/emissions levy.
Ryanair opposes the inclusion of aviation in the European Emissions Trading
Scheme and environmental taxation claiming that both will have a substantial adverse
effect on European Economic growth. Unlike other airlines pressing to join, Ryanair
will not participate in the EU carbon emissions trading scheme (Scenta nature and
environmental news; 2006).
Michael O’Leary considers green taxes “ the usual horseshit that we hear” and
claims, “there is a fundamental misunderstanding about aviation and environmental
taxes” (Scenta nature and environmental news; 2006). “Taxing aviation will not
affect the growth of Ryanair one iota… we will continue to be the gangbusters
because the price differential between Ryanair and Easy Jet and British Airways”
(Scenta nature and environmental news; 2006).
Ryanair believes that aviation is not the main culprit of carbon dioxide emissions and
that the EC should focus on “the real and larger sources of greenhouse gas
emissions”such as road transport, which accounts for 20% of emissions.
ELFAA, of which Ryanair is a member, commissioned a report by frontier
economics which states that aviation while only responsible for 4% of emissions in
the EU 15 supports over 3.1 million jobs and generates over (euros) 221 billion of
GDP. Ryan air calls on the EC to address the real problem areas such as “old gas
guzzling airlines like British Airways” (Michael O’Leary quoted in Scenta nature and
environmental news; 2006), road transport and also air traffic controls were
improvement in services would reduce emissions by 12%.
Ryanair postulates that emissions trading and fuel tax will distort competition if only
implemented in the European union. The repeated failure of environmental taxes to
reduce carbon dioxide emissions from motor vehicles is highlighted. The introduction
of a tax/levy is considered incompatible with international law enabling less
environmentally friendly flag carriers to achieve their goal of reducing competition.
Concern is expressed that in addition to increasing airfares it would also discourage
new entrants into the market resulting in reduced consumer choice.
Ryan air also argues that the Emissions Trading Scheme (ETS) is likely to result in
an “emission levy” being imposed principally on airlines that have no further means
of improving, having already invested in cleaner aircraft technology and participating
in efficient operations.
Ryanair supports the principles advocated by the European Low Fares Airline
Association (ELFAA) including “provisions allowing environmentally sustainable
growth” and claims that environmental responsibilities are taken very seriously and
that the introduction of ETS will not affect this.
Michael O’Leary has done and said much to earn his place as the “environmentalists
public enemy number one” (Clark, 2005). Despite Michael O’Learys claims, there is
a general consensus that aviation is the fastest growing mode of transport and
contributor of global warming gases. If aviation emissions are not curtailed aviation
could account for all the available carbon permits under the EU's emissions trading
system (Harrison, M: 07/11/06), or a ¼ of the UKs carbon emissions, by 2050
(Scenta Nature and Environment News: 2006). Ryanair has not joined others in the
aviation sector in becoming a member of the sustainable aviation group, which
Michael O’Leary regards as “another bunch of lemmings shuffling towards a Cliff
edge” (Clark, 2005)
Ryanair argues that the aviation industry accounts for less than 2% of EU Carbon
Dioxide emissions however this is misleading as the warming effect of aircraft
emissions is 2.7 times greater that the effect of carbon dioxide emissions alone. This
“radiative forcing ratio” when coupled with Carbon dioxide emissions would exceed,
by around 134%, 2050 government targets for greenhouse gases (Monbiot, 2006).
Ryanair opposes environmental taxation and does not comprehend why the
government is considering inclusion of air transport in the European Union
Emissions Trading Scheme (ETS) although acknowledges the limits on reducing
emissions by efficient operations and cleaner technology. The possibilities for
curbing Carbon dioxide emissions are either via technological improvements or
taxation. Tony Blair has accepted the fact that “there is no viable alternative currently
visible to kerosene as an aviation fuel” (Monbiot, 2006)
Ryanair’s contribution to economic growth is also controversial, defence that the
economic loss to the EU would be major if taxes were imposed is considered
fundamentally flawed by many: air travel creates a tourism deficit of £7 billion each
year in the UK (HACAN ClearSkies: 2006) and domestic tourism accounts for 83%
of the UK tourism spending (Friends of the earth, 2005).
Silent and Shadow Report: RyanAir
Local Environment
Airport expansion
N/A
Airport expansion
There have been proposals to expand many of the airports that Ryanair uses such as
Stansted. The House of Commons environmental Audit Committee states that the
growth the government foresees will require “the equivalent of another Heathrows
every 5 years” (Monbiot, 2006). Focusing on expansion is one of the reasons that
Michael O’Leary is not interested in the carbon emission trading scheme: “I am far
too busy doubling Ryanair over the next few years to be joining”
Airport expansion is posing a great threat to biodiversity, Ryanair made no reference
of any contribution to protect biodiversity. The woodland trust fears the
disappearance of hundreds of acres of ancient woodland and in the proximity of
Stansted airport, 60 species of birds are expected to loose their habitats including
many that are on the RSPB’s “red list”. Involvement in the loss of important heritage
site was similarly missing from Ryanairs environmental disclosure. The secretary of
the society for the preservation of Ancient Buildings stated that “This (the
government’s plans for airport expansion) is potentially the biggest single number of
destructions of historical buildings in living memory” (Planestupid)
Water and land quality
Water and land quality.
N/A
An insight into the importance of water is gained from BA’s report. BA consumed
286,000m3 of water at Heathrow and 42,000m3 at Gatwick in 2005. Likewise there
was no mention of levels of air pollution in Ryanairs environmental disclosure.
Noise Pollution
Noise Pollution
See “Community Report”
Although many of the airports that Ryanair operates in are remote in comparison to
BA, noise is still an issue. 14% of people in the UK are moderately or extremely
bothered by aircraft noise and the WHO has expressed concern about the effects on
health.
Waste
Waste
Ryanair does not provide passengers “free” meals, drinks or newspapers therefore
produces substantially less waste than traditional airlines. Noxious or potentially
toxic substances are always stored and handled in line with the relevant regulatory
requirements. Ryanair conducts special waste removal under the “special Waste
Regulations 1998. Normal waste is removed under the Duty of Care Waste
Regulations and the Environmental Protection Act of 1996 in the Glasgow Prestwick
maintenance facility
N/A
Silent and Shadow Report: RyanAir
Conclusion
Ryanair’s objective is to firmly establish itself as Europe’s leading low-fares airline. To do this they focus on
cost-containment and operating efficiencies. This focus is reflected throughout the both the silent and shadow
report. The production of the two reports has helped highlight any disparity and allowed comparison between
company statements and independent sources. Below follows a short analysis of the four sections: employment,
customers and products, community and environment.
Ryanair’s silent report appears to be very complete in regards to the employment section. Areas, such as
training costs and pay, are fully covered. The shadow report highlights employee dissatisfaction with the
present system. For example, the cabin crew training is viewed as being “all geared towards passing an exam”
and employees have to hire their own uniforms. Ryanair do not allow employee to form unions either. This
appears to demonstrate that their goal for profit, and thus low-fares, far outweigh employee satisfaction and
good relations.
The Customers and Products report highlights Ryanair’s reluctance to change policies. For example, after
failing to improve on customer care, Ryanair were fined by the Norwegian consumer protection agency. With
changes in legislation, Ryanair change as appropriate, such as providing entitlements upon long flight delays.
They appear reluctant to change policy, to improve customer care or otherwise, which would increase costs.
Despite a poll of worldwide travellers, quoting Ryanair as the worst airline, Ryanair received less than one
complaint per 1000 passengers in September 2006. This figure varied very little throughout 2006. One
implication is that it is only the minority of unsatisfied customers who give Ryanair an overall impression of a
‘bad’ company. Another possibility is that a lot more customers are unsatisfied yet do not complain, as they
accept that the low cost of Ryanair’s flight come at the sacrifice of good customer service.
Ryanair’s appear a company, who by focusing on efficiency, have as an offset, reduced community impacts.
For example, by using efficient, modern technology, noise has been minimised to within legal requirements.
Airport placement in remote areas, with cheaper costs, has had the duel effect of decreasing community
disturbances. While Ryanair shows admirable ethics, the shadow report suggests that in the bid to lower costs,
Ryanair employ unfair practice. For example, Ryanair employees maintain that the cheap tickets come as a
result of cynical business ethics and dirty tricks. Ryanair’s sponsorship of ORBIS must be mentioned. There is
a slight irony in their choice to raise money and awareness on World Sight Day this year, when they were
withdrawn from a prestigious Deaf-blind Friendly Corporate Award the year before. However their effort
remains admirable.
Increasing efficiency often has the additional bonus of lowering environmental costs. Ryanair’s young and fuelefficient fleet allow them to advertise themselves as “Europe’s greenest airline”. The absence of key
environmental challenges, such as global warming, short and long term targets specifying time scales and
environmental performance indicators, indicates that Ryanair has little concern for environment issues.
Environmental improvements are merely an offset of profit maximisation. To highlight this point, a comparison
with British Airways environmental report was made. Ryanair’s report was short in comparison, comprising of
approximately 1,118 and 1,061 words in “Ryanair Europe’s greenest airline” and in Ryanair’s Annual Report
and financial statement respectively. British airways 2005/ 2006 Corporate Responsibility Report comprised of
approximately 4235 words (British Airways, 2006). Ryanair’s environmental disclosure also fails to provide
any independent verification statements. Lowering of environmental impacts occur because they make financial
sense. Ryanair have never claimed to prioritise the environment in their goals.
One reason Ryanair doesn’t produce a Corporate Social Report may be that it does not make financial sense for
them. Ryanair are a ‘no-frills’ airline and as such do not make an attempt to advertise themselves as anything
else. The best way for Ryanair to provide a low cost flight to customers is to operate an efficient business. The
Silent and Shadow Report: RyanAir
benefits to the environment are views by Ryanair as an added bonus. Ryanair achieves its goal to become a
low-cost airline. When it comes to Ryanair’s business practise, Coyle (2006) summarises Ryanair perfectly:
“It’s all about the bottom line with O’Leary”. If Ryanair wish to become a sustainable company, they surely can
not continue with their single focus on profit.. Their company must, in our view, tackle all the above areas in
the report. A key goal to achieve efficiency within a company is surely to have both good employee and
customer relations and most fundamentally they must tackle long term issues, such as climate change, and the
wider implications this holds for the environment.
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