BUZZ-Ryanair: Recognizes unions, could hurt in long term - Bernstein

** Low-cost carrier's shares extend steady decline since start of trading, now down 4% and on track for worst day in nearly 1-1/2 yrs

** Ryanair has offered to recognize pilot unions in historic shift to stop strikes

** Pilots from Ireland (Other OTC: IRLD - news) , the UK, Germany, Italy, Spain and Portugal had been set to strike on Dec (Shanghai: 600875.SS - news) . 20

** "Whilst the move is primarily designed to prevent disruption over the Christmas period, it is likely to be very difficult for Ryanair to retreat from this", Bernstein analysts say

** They estimate around 80% of Ryanair's pilots are employed in these countries

** Ryanair has largely avoided the kind of labour unrest seen at traditional rivals such as Air France KLM and Lufthansa (Xetra: LHAB.DE - news) during a break-neck, two decade expansion.

** Its cash generating power has given it a p/e ratio far higher than many sector peers.

** Bernstein expects that after today's move all remaining countries will unionize quickly. In the longer term, it says, the consequences could be profound

** "If Ryanair's workforce does become more unionized, it is likely to lead to greater labour cost inflation and reduced flexibility in employment terms, both of which would be negative outcomes for Ryanair"