Buzz staff launch appeals over Ryanair demands

UNIONS representing staff at the Ryanair-acquired airline Buzz yesterday outlined their concerns to management about the deal.

Workers at the former KLM company are worried at what they see as an ultimatum by Ryanair chief Michael O'Leary to work his way or lose their jobs.

Ryanair recently bought the cheap flights airline for a the net bargain basement sum of around 5 million, when cash reserves at Buzz are taken into account.

O'Leary quickly signalled his intention to streamline the mostly Stansted-based staff by around 100 from its current 570.

He has attempted to clarify his remarks by stating that he meant Buzz would be closed unless the Ryanair "formula" could turn its ailing fortunes around over the next couple of years. Buzz has lost around 30m in each of the last two years.

Buzz head office could not be reached for comment or an update on the meetings last night.

Meanwhile, the latest research by Goodbody says Ryanair will emerge as the "gorilla" in the low-cost space of European air travel.

Rating the stock a buy with a price target of 8.50, Goodbody said passenger numbers would grow by 20% over the next seven years on foot of fleet and network expansion across Europe.

Dubbing European airspace "the Zoo", the stockbroker said some 410 million air passengers were carried in the space last year, alone.

They spending a combined 40m on airline tickets.

Ryanair accounts for just over 3.5% of the passengers carried, yet Goodbody predicted it could become the largest airline in passenger numbers in the next 10 years as the "low-cost revolution" evolves.

Goodbody also stated that Ryanair's management team operates a business model more rigorously and efficiently than any of its competitor "That focus will deliver an earnings stream capable of sustaining a premium rating over the longer term," Goodbody said. It also states that the move to an entirely new fleet and the introduction of a customer charter by Ryanair signals a relative upgrade in service levels. Concerns about the business include the European Commission inquiry on Charleroi airport amid claims that Ryanair benefits from state aid at the Brussels base. Other factors, such as a war in the Gulf, would also depress international air traffic in the short-term. But the effect could also tip some "financially stretched" European carriers over the edge and create a space for low-cost airlines.