The real challenge for Ryanair will be to replace Michael O’Leary

One could mistakenly think that, with his successes to date, Ryanair chief executive, Michael O’Leary, might be kicking his heels a little. After all, he runs the biggest airline in Europe. It is highly profitable and Mr O’Leary’s success has been well-rewarded.

The real challenge for Ryanair will be to replace Michael O’Leary

However, he’s not one to let the grass grow under his feet.

On the back of much talk of fear and flight cancellations, following recent accidents and terrorist incidents, many airlines are considering scaling back their operations, particularly to perceived hot-spot destinations.

Fresh from Mr O’Leary’s advice to the British to stay in the EU, Ryanair sees what’s happening in the industry as a major business opportunity.

Its simple response is to reduce its prices and its belief is that flights will be filled. It’s only a question of finding the right price to get people over their fears.

After all, despite terrorist threats, flying is still one of the safest modes of transport.

Happily for Mr O’Leary, given his recent focus on a more customer-focused company and on targeting business travellers, he is no longer reliant on holiday or leisure travellers.

Nevertheless, low-cost travellers still form the major element of Ryanair’s customer base.

When we spend our own money, rather than when we are on expenses, we are inclined to go the cheaper option — particularly for leisure.

It gives us a few more bob in our pockets. Ryanair is firmly focused on our itchy feet and everyone having a price. Even risk-averse people take risks every day.

Other airlines have warned of rising competition from low fares, and analysts feel that all of them, the legacy airlines included, will have to follow Ryanair’s lead.

As was reported on Tuesday, Ryanair has thrown down the gauntlet to its budget-airline rivals.

O’Leary is an extremely shrewd businessman. Earlier this week, Ryanair reported annual profits of €1.24bn; up by a whopping 43%.

Not bad for a company that very nearly never got off the ground, 30 years ago. It’s clearly better to be lucky than smart, but, to sustain, you need to be smart, too. Despite the begrudgers, Ryanair is an Irish success story.

But Mr O’Leary is not without his idiosyncrasies. Besides throwing down the gauntlet to its rivals, Ryanair also announced that its senior and middle management had agreed a 12-month pay freeze.

Lest we forget, Ryanair has just reduced its costs by 2% and is targeting another 1% in the coming financial year. Strange that the lads and lassies who helped make it happen get hit with a pay freeze.

I am reminded of a story I heard more than 10 years ago, from someone who worked, at the time, in Ryanair’s head office.

O’Leary had called all of the staff to the top floor of the office at Dublin Airport to announce, and celebrate, the achievement of another major milestone.

This was a time of success and celebration. It was a company on the move, and the move was upwards.

Its celebration lasted less than 24 hours, as, on the following morning, staff, the story goes, learned that coffee, which had been hitherto free, would now have to be paid for.

And a decision was taken some time later to ban the recharging of personal mobile phones in Ryanair’s offices.

Given the number of employees and the cost of electricity, it was a large cost. It could have been worse. O’Leary could have suggested that they bring their own toilet paper with them.

Funnily, ‘spending a penny’ was also suggested for the airline itself, but that was before O’Leary became customer-focused.

Urban legend, maybe, but I see no reason not to believe it. It could just be a case of keeping the boys and girls on their toes, so that they’ll take nothing for granted. Harsh, but it makes sense.

Complacency is one of the biggest problems most successful companies face. Michael O’Leary is not going to allow that to happen. He’s brought the airline a long way, but he’s done it his way.

Getting a successful successor will be no easy job.

More in this section

Lunchtime News Wrap

A lunchtime summary of content highlights on the Irish Examiner website. Delivered at 1pm each day.

Sign up
Revoiced
Newsletter

Our Covid-free newsletter brings together some of the best bits from irishexaminer.com, as chosen by our editor, direct to your inbox every Monday.

Sign up