Ryanair chief executive Michael O’Leary unveiled plans to step back from the controls of the budget airline on Monday, 25 years after slipping into the cockpit.
The major overhaul sees the motor-mouthed multi-millionaire step upstairs to become chief executive of a group holding company and the creation of four subsidiaries, including Ryanair UK, each with its own CEO and management team.
Ryanair said the decision would “deliver cost and operating efficiencies” as well as allowing the airline to look at small-scale M&A.
Although O’Leary is still committed to the group until 2024, the restructuring will also help form a breeding ground for an eventual successor to the 57-year-old Irishman.
O’Leary stepping away from day-to-day management would also remove him from dealing with the unions, with which the airline has had a fractious relationship for years.
Ryanair was crippled by pilot strikes last year, grounding one in six of its flights. As recently as last month after another dispute, pilots union Balpa accused the company of being “heavy-handed”.
General secretary Brian Strutton said today: “The appointment of O’Leary’s replacement as CEO of Ryanair later this year will be critical.
“will it be someone capable of working with unions and will they be allowed to do so without interference from above? I’m sceptical but I hope I’m wrong, or the industrial unrest will continue.”
The restructuring also sees long-serving chairman David Bonderman step down next year, to be replaced by former Kerry Foods boss Stan McCarthy. Senior independent director Kyran McLaughlin also steps down.
The shake-up came as it slipped to a “disappointing” €20 million (£17.5 million) loss for the third quarter today, blaming overcapacity on European short-haul routes for driving down fares.
Although passenger numbers were 8% ahead of last year at 32.7 million, oil prices spiking higher at the end of last year have added to the airline’s costs. The firm expects the weaker fares picture to eventually shake out more-vulnerable competitors.
Regional airline Flybe is seeking a buyer while Norwegian launched an emergency fundraising last week.
Brexit could also add to the pressure over the weeks ahead as the firm hinted at more potential profit warnings.
