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On September 14, 2017, it was reported that Ryanair had lost a key ruling in the European Court of Justice that cast doubt on the legality of the Company's use of Irish employment contracts to evade local labor laws throughout Europe. The next day, Ryanair announced that it would need to cancel up to 50 flights a day for the next six weeks due to pilot "schedul[ing]" issues, impacting some 315,000 customers.
Following this news, Ryanair's American depositary receipt ("ADR") price fell $7.09, or 6.21%, over three trading sessions, to close at $107.00 on September 18, 2017.
Soon thereafter, reports began to circulate that the disruption was not due to scheduling issues as the Company had claimed, but rather to widespread defections by disgruntled employees. Then, in the summer of 2018, Ryanair workers in Germany, Belgium, Sweden, Portugal, Italy, the United Kingdom, the Netherlands, and Ireland threatened collective action, resulting in flight cancellations that forced Ryanair to pay millions in compensation costs or to re-route fliers. On July 23, 2018, Ryanair disclosed a 20% decrease in quarterly profits, due in part to a 34% increase in staff costs.
Following this disclosure, Ryanair's ADR price fell $10.00, or 8.57%, to close at $106.70 on July 23, 2018.
Shortly thereafter, on October 1, 2018, the Company revealed that it could not meet its annual profit guidance due to the lost fares and ballooning costs related to the strikes and flight cancellations.
Following this news, Ryanair's ADR price fell $15.11, or 15.73%, to close at $80.93 on October 1, 2018.
The Pomerantz Firm, with offices in New York, Chicago, Los Angeles, and Paris, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 80 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomerantzlaw.com
Robert S. Willoughby