US court allows shareholders to sue Ryanair over claims during dispute

A US court has allowed shareholders to sue Ryanair and chief executive Michael O'Leary for making "false and misleading statements" about its industrial relations woes in 2018, but has dismissed some of the claims made in the case.

A group of shareholders, led by City of Birmingham Firemen’s and Policemen’s Supplemental Pension System, are seeking damages against the airline and Mr O’Leary in the US federal courts.

US district judge Paul Oetken ruled this week that shareholders could pursue the claim against Ryanair and Mr O'Leary on the grounds that they appeared to rule out recognising trade unions in September 2017, three months before backtracking on this policy.

The shareholders argue that Ryanair’s stock fell sharply following a profit warning in October 2018 which showed that costs had increased following unionisation.

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The judge dismissed some claims concerning statements about Ryanair’s industrial relations, profitability and growth targets, finding no proof that they were false.

Ryanair has vowed to defend the action vigorously. The airline said on Wednesday that it does not comment on pending legal matters.

Class action

The lawsuit is a class action, where a plaintiff sues on behalf of a group of people with a common claim against the same defendant. The City of Birmingham pension fund filed the action in the US courts in November 2018, following Ryanair’s profit warning.

Ryanair historically refused to deal with unions, although it did not prevent staff from joining them.

The Irish airline reversed this policy in December 2017 and agreed to recognise pilot and cabin-crew unions to avert threatened strikes in the run-up to Christmas that year.

A number of unions, including the Irish Airline Pilots’ Association, held a series of one-day strikes at Ryanair during the summer of 2018. However, the airline said these caused only minimal disruption to its flights.

Covid-19 travel restrictions have largely grounded Ryanair’s fleet. The airline hopes to restart flying part of its schedules from the start of next month.