U.S. Markets close in 2 hrs 53 mins

Ryanair Cancels Flights as Cabin Crew Strike Date Approaches

Zacks Equity Research
1 / 2

Ryanair Cancels Flights as Cabin Crew Strike Date Approaches

The persistent labor strife at Ryanair (RYAAY) is hurting the stock massively.

Ryanair Holdings plc RYAAY is expected to face another strike on Friday by cabin crew across Spain, Belgium, Holland, Portugal, Italy and Germany.

The unions representing the respective countries’ cabin crew had pre-decided on the walkout earlier in the month. The unions sent a joint letter to the company, threatening to launch the largest ever protest at month-end in case it does not improve work environment. (Read more: Ryanair Faces Risk of Another Major Strike at Month-End)

The imminent strike prompted Ryanair to cancel approximately 190 flights of the total 2,400, affecting around 30,000 customers. The passengers to board have been informed in advance regarding the cancellations with a three-day’s notice. Similar incidents earlier in the year prompted the carrier to call off several flights during the peak summer season, lowering average fares in turn.

Persistent Labor Agitation Hurting Growth

Notably, the European low-cost carrier has been grappling with labor unrest since the time it acknowledged trade unions last December.

Per the company’s chief marketing officer Kenny Jacobs, the back-to-back strikes especially at a time of soaring crude oil prices are hampering Ryanair’s business and resulting in soft bookings. If this continues unabated, the airline might have to rethink its capacity growth plan for winter and summer 2019. Earlier in July, the carrier planned annual passenger growth of 7% to 139 million in the year to March 2019 and another 9% to 152 million in the year to March 2020.

Amid this pessimism, Ryanair informed about having made a “significant progress” regarding negotiations with labor groups in Ireland, the U.K., Italy and Germany over the past few weeks.

The persistent labor agitation has taken a toll on Ryanair’s shares. The stock has declined 21.8% in the past six months.


Zacks Rank & Key Picks

Ryanair carries a Zacks Rank #5 (Strong Sell).

Some better-ranked stocks in the broader Transportation sector are SkyWest, Inc. SKYW, Trinity Industries, Inc. TRN and Ryder System, Inc. R. While SkyWest sports a Zacks Rank #1 (Strong Buy), Trinity and Ryder hold a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of SkyWest and Trinity have rallied more than 28% and 19%, respectively. Meanwhile, Ryder boasts an impressive earnings history, surpassing the Zacks Consensus Estimate in each of the preceding four quarters with an average beat of 4.5%.

The Hottest Tech Mega-Trend of All

Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.

See Zacks' 3 Best Stocks to Play This Trend >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
SkyWest, Inc. (SKYW) : Free Stock Analysis Report
Ryanair Holdings PLC (RYAAY) : Free Stock Analysis Report
Ryder System, Inc. (R) : Free Stock Analysis Report
Trinity Industries, Inc. (TRN) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research