Ryanair has reached a settlement of a US lawsuit accusing the airline of defrauding shareholders by downplaying its willingness to recognise unions.
The budget carrier confirmed that the US class action, launched by the City of Birmingham Pension Fund in November 2018, has been settled following recent mediation between the parties.
“This settlement came after the US District Court in 2020 dismissed many of the claims made by the plaintiff, considerably narrowing the grounds for action,” said Ryanair.
The Ryanair statement it welcomed this settlement, adding: “The total settlement amount is $5m, which is considerably less than the legal costs that would have been incurred had this action gone all the way to trial.
“Ryanair contends there was no lawful basis for this claim, but that the settlement is in the interest of all shareholders due to the very modest settlement amount.”
More: Ryanair makes market share gains and predicts ‘enormous growth opportunities’
Ryanair sees May passengers numbers rise 10% to 17m
The final settlement agreement will be subject to approval by the court.
RTE in Ireland reported that shareholders accused Ryanair and chief executive Michael O’Leary of inflating the carrier’s stock price by trying to mislead them into believing they would not welcome unions, the recognition of which could boost costs and reduce profits.
“The lawsuit cited, among other statements, Mr O’Leary’s comment at Ryanair’s 2017 annual general meeting that hell would ‘freeze over’ before the Dublin-based carrier accepted unions,” reported RTE.
“Shareholders also challenged Ryanair’s claims that it had enough pilots and maintained excellent labour relations, when it actually faced a pilot shortage and offered in December 2017 to recognise pilot unions to avert a possible strike.”
More: Ryanair makes market share gains and predicts ‘enormous growth opportunities’