Ryanair (FR, Dublin International) says it will transfer its sole Copenhagen Kastrup-based B737-800 to Lithuania with effect from July 14 in retaliation for last week's Danish Labour Court (Arbejdsretten) ruling which allows the Danish Confederation of Trade Unions (Landsorganisationen i Danmark - LO) to take industrial action against the budget carrier. Defiant, the airline maintains that it will continue with its normal Copenhagen operations as its non-based aircraft cannot be blockaded or interfered with by SAS Scandinavian Airlines (SK, Copenhagen Kastrup) unions.

“Ryanair will now switch its one based aircraft from Copenhagen to Kaunas International as a result of this week’s bizarre Labour Court ruling which allows competitor airline unions to blockade Ryanair based aircraft at Copenhagen even though these unions do not represent any Ryanair pilots or cabin crew," Ryanair CEO Michael O'Leary said. "Sadly, Copenhagen will lose out on these high paid Ryanair jobs as we move our pilots and cabin crew to other Ryanair airports elsewhere in Europe."

The LO took Ryanair to the Arbejdsretten after the Irish LCC refused to enter into negotiations on a Collective Labour Agreement (CLA) with the Services Union which, via the Danish Flight Personnel Union (FPU), organises pilots and cabin crew. The Arbejdsretten as such agreed with LO claims that if an airline has a base in Copenhagen, Danish law therefore applies and taxes are due in Denmark.

Ryanair has in the past argued that such country-specific agreements are not necessary as EU Regulations governing mobile transport workers and the Denmark-Ireland double taxation treaty permit it to employ its staff under Irish contracts. It argues that as its employees work on-board Irish registered aircraft (defined as Irish territory) and pay their taxes in Ireland, they are therefore, in this instance, not subject to Danish labour law.

The LO has warned that should Ryanair fail to sign a CLA within five days of the Arbejdsretten's ruling, affiliated unions may boycott the airline at Kastrup airport by depriving it of fuel, baggage handling and security among other services.

"If Ryanair refuses to negotiate a collective agreement, the principal conflict may later be backed by secondary action from members of LO's affiliated unions," the LO said in a statement. "This means that members of a union affiliated to LO will not perform tasks that originate from or are designated for the employer which is targeted by the conflict."

The LCC has faced several similar labour disputes in the past the most drastic of which resulted in the closure of its Marseilles, France base and MRO hub in early 2011.