Pilot union BALPA urges Ryanair to improve working conditions

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The airline made the offer after pilots threatened strike action. The last of these is key to its appeal: many businessmen chose Ryanair more for its punctuality than its cheapness.

However, passengers are reporting problems with the process of refunds or compensation for cancelled flights, saying the information supplied by Ryanair is incorrect and calls are going unanswered.

Shares in Ryanair were down 0.6 percent at 16.42 euros at 1334 GMT, having briefly dropped below 16 euros while O'Leary addressed the meeting.

The cancellations translate into 40-50 Ryanair flights per day and affect 315,000 passengers. The holiday year used to run from April to March, but under pressure from the Irish Aviation Authority Ryanair is adopting the calendar year, as new European Union rules require. The number of passengers affected is less than the initially announced 390,000, because September's preliminary reservations were 90%, compared with 70% in October, the company said. So many are taking their holiday after the summer rush that not enough are available to maintain a full schedule.

The announcement comes just hours after a group of Ryanair pilots rejected the company's offer of a tax-free £12,000 bonus in exchange for agreeing to work on their days off over the upcoming months. "I say we want to put our hands up, which is what we do when we make a mess", O'Leary told a news conference.

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"We have some goodies to discuss with pilots, but if pilots misbehave, that would be the end of the discussion of the goodies".

But O'Leary appeared unwilling to give any ground in the standoff, instead threatening to cancel pilots' time off and questioning the extent of their talents.

He also said the airline is considering forcing 500 pilots to change their holiday plans to avoid risking additional flight delays.

The low-priced Irish airline is forced to cancel up to 50 flights every day from today until October 28 because they "messed up" plotting their pilots' schedules and holidays, BBC confirmed. Analysts say the firm's costs may rise by around 5% as a result.