by Eric J. Lyman
ROME, Sept. 22 (Xinhua) -- Italian competition officials say they will open a probe into the operations of low-cost air carrier Ryanair, the latest development in a situation that seen the Irish company cancel hundreds of flights to and from Italy due to what the airline says are staffing issues.
The issues have come to the surface at a delicate time for Ryanair, which is reported to be one of the leading candidates to buy Italy's struggling flagship airline Alitalia.
"Ryanair has some staffing issues, especially for pilots, after a period in which the company grew very quickly," Andrea Giuricin, an economist and a fellow at the Milan-based Bruno Leone think tank, told Xinhua.
"They will also face some economic problems from cancelling so many flights. But the big problem may be the company's image, which will take a big hit because of this," he said.
In some ways, the Dublin-based airline can be seen as a big success story. Since 2010, the airline has doubled its revenue to 6 billion euros (7.2 billion U.S. dollars), and over the last dozen years the number of passengers it carries has nearly quadrupled to 120 million per year. Giuricin said the company has a 25-percent profit margin, by far the highest among major European air carriers.
But it has done those things by using extreme measures to keep costs low. According to Stefano Denicolai, a professor of innovation and technology management in the business school at the University of Pavia, Ryanair spends around a tenth of its revenue on personnel costs.
On an average flight, Denicolai said in an interview, only five euros (six U.S. dollars) of each passenger's ticket costs goes to pay for the salary of the on-board staff and pilots.
"The company is known for a kind of maniacal efficiency that produced strong financial results of many years," Denicolai said. "But now it had started to produce a crisis situation."
Ryanair officials did not respond to requests for comment from Xinhua, but the Italian media has published reports saying the decision to cancel more than 50 flights a day came as a result of delays from extreme weather in Italy, labor strikes, and a backlog of leave time for pilots.
But Denicolai said the problems come at least in part from stretching staff too thin. "They are trying to do too much with too little and without contingency plans," he said.
"Staff loyalty and moral are very low and under those conditions a company cannot really ask staff to pull together to overcome problems. I don't think this is the only time Ryanair will have these kinds of problems," Denicolai said.
Graziano Delrio, Italy's minister for transportation, called the Ryanair situation in Italy "very serious," and said it did not reflect well on the airline's bid to take over and revive beleaguered Alitalia, which has been operating under bankruptcy protection since May.
"We cannot make allowances for such a large degree of disruption," the minister said in a statement.
The government will accept bids for Alitalia until Oct. 2. It is known that Germany's Lufthansa airlines is also interested in taking over Alitalia.
