Ryanair CEO Changing Roles As Group Restructures

Michael O’Leary is the infamous and eclectic CEO of low cost carrier Ryanair, which by passengers carried is the largest airline in Europe (low cost or otherwise).

Here’s a standard image of him at a press conference:

Ryanair CEO Michael O’Leary (Source: European CEO)

Mr. O’Leary has been in the role for a staggering 25 years, which is a huge term for any airline leader. He is now one of Ireland’s richest businessmen, based on the financial success of the airline he has been running for decades.

After a horrible 2018, Ryanair has been restructuring their corporate operations recently by establishing new entities:

  • Ryanair Sun, which is a new Polish subsidiary designed to operate with lower costs, where they are attempting to move aircraft and staff
  • Ryanair UK, which the group is establishing to deal with whatever shape their UK operations face after Brexit; and
  • Laudamotion, which they acquired.

Ryanair has just announced a three month loss of around €20 million, excluding the Laudamotion figures, compared with a profit for the same period last year of around €120 million.

While this might sound unusual for such a profitable airline, admittedly this period was during the European winter, when demand for leisure travel is greatly reduced. Ryanair is still expected to record a full year profit, though it may be lower than previous years given this one quarter loss.

Ryanair has blamed, as usual, rising fuel prices, staff strikes, EU261 and Brexit uncertainty for their financial performance.

Michael O’Leary will now step away from the day to day running of the main Ryanair DAC entity for the first time in 25 years, and focus more on the overall Ryanair Group (with the four entities mentioned above).

It will be interesting to see if Ryanair (DAC at least) changes its passenger experience when Mr. O’Leary finally steps back from the day to day decision making in his expanded, more strategic oversight role.

Mr. O’Leary has explained his new role will be more like that of IAG boss Willie Walsh, than that of British Airways CEO, Alex Cruz. I’m not sure if Willie Walsh would see it this way!

Mr. O’Leary is famously outspoken and hard-line — I read an interview with him once where he proudly said that he does now allow staff working at Ryanair’s head office in Ireland to charge their mobile phones at their desks because that costs electricity.

He insists any cost reductions he can deliver will mean lower fares for his passengers — he’s worth over $1 billion, so those cost reductions are benefiting him too.

As a (previously) regular Ryanair passenger, Ryanair seems to continually change their strategy:

  • first they were all about extracting as much ancillary revenue from their passengers as possible, by having non negotiable obscene charges for just about everything,
  • then they decided they wanted to attract lucrative business travellers, so developed special fares that included all the sorts of benefits they thought business travellers would want (although I pity any business travellers that have to fly Ryanair for work on a regular basis)
  • then they relaxed their hand luggage rules to allow passengers to take a second bag in the cabin for free
  • then they massively complicated their baggage policies by forcing most passengers to pay for priority boarding.

It’s also interesting that Ryanair is being so proactive about Brexit.

There’s so much uncertainty in the UK at the moment about what will happen post-March 29, that most companies seem to be adopting a ‘wait and see’ approach, while perhaps putting long term projects and initiatives on hold until they understand what conditions the UK will have to comply with when doing business in the rest of Europe.

So Ryanair has already set up a new corporate entity based on what they believe will happen after Brexit.

I haven’t written much about Brexit here at OMAAT yet, because there is so much uncertainty and no one really knows what is going to happen. Once there are concrete plans for any changes to travel I will update you, but right now it’s just airlines gazing into their crystal balls and trying to predict what might happen.

Bottom line

Ryanair’s new, very confusing baggage strategy has caused me to largely move away from the airline as my main frustration is that unless you are willing to travel with only a small sized hand luggage bag (that can fit under the seat in front of you), the advertised price is no longer the advertised price, as you need to add the cost of priority baggage.

This makes it difficult to compare different carriers’ advertised prices on the same routes.

I am hoping Mr. O’Leary taking more of a wider strategic role for the entire group will mean someone with fresh ideas can come and run the day to day Ryanair DAC entity. Hopefully that person can introduce some new initiatives that makes the passenger experience affordable, but still simple and bearable, or dare I say even enjoyable.

There are plenty of other low cost airlines in Europe, and around the world, that manage both.

Comments

  1. Easyjet has been absolutely fine, but Ryanair is still a big no-no.

    I think that one of O’Leary’s biggest outbursts was when he was presenting his plans for long-haul TATL flights in Germany, and the incident with the translator (something about bl*wj*bs, it’s still on YouTube). Of course, the LH offer never materialised, but he got lots of attention for it.

  2. Now I’m scared… I bought one leg of Ryanair flight (city pairs and time worked for a month-long family tip in Europe), and it did not seem complicated.

    Paid for flight + one checked baggage and my understanding is I get one small cabin bag (like small laptop bag or less). Did not see any complications in terms of baggage policy, what have I missed? It looked no different than buying economy on AA, and if anything, it was obvious from get-go what is included and what is up-charge.

  3. Shareholders were looking for O’Learys head because of the recent poor performance and union issues. After 25 years many institutional investors also felt it was time for him to step down. This role change allows him to deflect those concerns and plan a gradual handover of control. It’s a smart move. Plus I imagine there is a major acquisition, merger or investment in the offing. Unencumbered by day to day operational a group CEO can focus on those kind of matters.

  4. That’s the first time I’ve ever seen Ryanair referred to as Ryanair DAC!

    And they certainly aren’t the only company preparing for Brexit – have you been living under a rock? Off the top of my head, supermarkets, industry the NHS and Army are stockpiling, ferry companies are preparing emergency sailings, easyJet made an EU subsidiary, IAG is making and trying to justify convoluted ownership schemes to allow them to keep BA and Iberia together… Not only is Ryanair not “leading the pack”, they aren’t even leading the airline industry…

  5. Ryanair is not leading the aviation pack regarding Brexit. They are actually late to the party, just like IAG.
    Leading the aviation pack is easyJet who have been preparing for over two years and even acquired an Austrian AOC for their European operations. Furthermore, over 100 aircraft are now flying around with Austrian registrations.
    IAG and to a lesser extent, Ryanair, are now waking up to the fact that they’re not remotely prepared for Brexit. IAG probably won’t be able to prove they’re a European airline and if a hard Brexit comes which is they way things may go, they may have serious problems with their traffic rights.
    Ryanair won’t have as many difficulties as the majority of their flying is intra-European (excluding the UK) and their aircraft are Irish registered. For the amount of intra-UK flying they do, they won’t have the hassle that either the well prepared easyJet would have had, or the ill prepared IAG will most likely have.

  6. One thing I truly love about the travel industry is the all-in-one marketing aspect and how you can reap healthy financial rewards by partnering with certain airlines enjoining their affiliate programs. I’m a total firm believer that travel blogging and side hustling is today’s new new of stable employment. Agree?

  7. The best thing March 29th is going to provide is the chance to give the Brits who comment shade here about the U.S. a taste of their own. Welcome to chaos. And, well, see, you are just as dysfunctional as the rest of us.

  8. Stuart – Rubbish. I despise Brexit but it is not on the same level as electing a proud and open misogynist, sexist,
    transphobic, xenophobic, racist scum bag sex offender.

    Brexit is going to damage the UK but it will remain a fairly liberal, safe and democratic place. The US will, for the foreseeable future, remain an uncivilised backwater that gives every appearance of being a third world country – just with wealth on top. The fact alone that it’s the richest country in the world yet you refuse to provide adequate healthcare to the poor should make you disgusted to call yourself an American. I’m not going to mince my words here – it’s a wicked and immoral place and you should be ashamed that you just go along with it.

  9. Stuart – Rubbish. I despise Brexit but it is not on the same level as electing a proud and open misogynist, sexist,
    transphobic, xenophobic, racist sex offender.

    Brexit is going to damage the UK but it will remain a fairly liberal, safe and democratic place. The US will, for the foreseeable future, remain an uncivilised backwater that gives every appearance of being a third world country – just with wealth on top. The fact alone that it’s the richest country in the world yet you refuse to provide adequate healthcare to the poor should make you disgusted to call yourself an American. I’m not going to mince my words here – it’s a wicked and immoral place and you should be ashamed that you just go along with it.

  10. Just booked a flight from Treviso to Manchester, no problem whatsoever
    paid for the suitcases up front seats and early access
    In all the flight cost hundreds less for the same service on Jet2.com
    The last Ryanair flight I took was great on a beautiful brand new plane

  11. One of my gloating air passenger prides has been, (is it already 2 decades ago?) to royally screw Ryanair at their own game, travelling round trip between London and Brittany with two suitcases each weighing some 20 kg, and this without spending a penny for the baggage.

    I haven’t flown with them since and frankly have no desire to use a carrier which makes American look and feel like Qatar Airways.

  12. @Callum. Ah friend, you fail to see that I agree with you. I am just as disgusted with our country as you are with it. The difference is I own it (as many do) and do everything in my power to change it for the better in the many ways you speak of. Meanwhile, it’s your group on here that repeatedly judges all Americans for the mistakes of a dysfunctional system that we are trying to make better with repeated snide comments and a “kick your puppy” attitude. You are not so special.

    In the meantime you have the disaster awaiting of Brexit. So we are going to laugh back and let you know how it feels. As well, I will laugh at your comment about health care given the thousands of wealthy Brits that jet their way to Hopkins, Cleveland Clinic, and Duke (etc.) to avoid the mess of NHS and get prompt and world class surgeons.

  13. Often, the biggest advantage that I find in flying Ryanair is that they fly non-stop to many destinations where other carriers would require a stopover. I feel that they have a monopoly over the non-stop option for many routes. I am curious about whether the changes will change this.

    I have found the baggage rules difficult to understand before, and have found it where their middle package included things that their more expensive package did not.

  14. Stuart – No you are not as disgusted as I am, your arrogant gloating proves that. I also highly doubt you’re doing everything you can to change it but granted I don’t know you. And yes, the UK and the rest of the civilised world certainly is special in comparison to the US. It’s a shame that a respect for human well-being is enough to make you special in this world.

    Except the NHS is irrefutably not a mess and also has world class surgeons. Your moronic comment, especially given your system that bankrupts people and leaves them to die, says all I need to know about you.

  15. Spoken like a true smug Brit. See you on the other side, friend. Shall we meet on the Northern Ireland border crossing?

  16. Stuart – There’s absolutely nothing smug about what I’ve written. If I was smug then I wouldn’t be disgusted by America with a desire for it to change, I’d merely be content with being morally superior.

    There’s not going to be a border crossing… You’re not doing much to challenge the stereotype that Americans are rather dim are you! Not that it’s a convenient meeting point for me given I neither live in, not particularly like, the UK.

  17. I think you meant to say NOT, not NOW in context

    “he does now allow staff working at Ryanair’s head office in Ireland to charge their mobile phones at their desks because that costs electricity”

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