June 2011: Michael O’Leary, CEO, Ryanair

The key to why Ryanair continues to flourish, O’Leary has steered the airline to a 26% profit increase in the most  turbulent of conditions.

Because

In the difficult aviation market that was 2010, Ryanair announced a 26% rise in profits for the year ending March 2011, despite the adverse effects of Icelandic volcano eruptions, snow disruptions and a general lack of consumer confidence.

Michael O’Leary is the face of Ryanair, its CEO, decision-maker and the key player in the Irish aviation success story. Driving the company forward in an ever more challenging market, O’Leary is the innovative, and sometimes controversial, key to why Ryanair continues to flourish.

Moving up

Ryanair’s profit for the year was €401 million, up from €319 million the previous year. In all other areas, the airline showed gains, with revenues going up 21% to €3.63 billion, and passenger numbers up 8% to 72 million.

However, the market looks challenging for the next year, with rising fuel prices a constant worry for the whole aviation industry. A rising cost base for all airlines means higher air fares for passengers across the board. Fuel costs were up 37% compared to the previous year, standing at €1.2 billion.

Looking ahead

2011 promises to be another tough year for the airline, and Ryanair announced in a statement that fares will, on average, be up by 12% this year, “we cautiously expect that our average fares will rise by up to 12% this year due to a better mix of new routes and bases, slower traffic growth, and higher competitor fuel surcharges. However, these higher fares will only help us to finance higher fuel and rising sector length related costs, and accordingly, we expect profit after tax for fiscal year 2012 to be similar to the fiscal year 2011 result of €400 million.”

The airline is planning to ground 80 aircraft over the winter, as it scales down operations in numerous markets due to a lack of demand.

Jobs initiative

The jobs initiative announced by the Government in May focused much of its energies on the tourism sector, and introduced a measure that both Ryanair and O’Leary have been vocal on over the years. The Government took away the €3 tax on flights departing the country – the so-called “tourist tax” – and opened the way for a more competitive pricing policy from airlines like Ryanair.

Aer Lingus

In recent years, O’Leary has made more than one attempt to take over the partially privatised Aer Lingus. He purchased over 26% of the former State-owned airline in 2006, having mounted a takeover attempt worth approximately €1.5 billion. His offer was not accepted, although his share has increased to just under 30%. In 2008, he tried yet again, in a €750 million bid, to purchase the airline, insisting that he would operate Aer Lingus and Ryanair as two completely separate companies, but again was foiled.

History

O’Leary is originally from Mullingar and was educated at Clongowes Wood College, Co Kildare. He studied business at Trinity College Dublin, graduating in 1983 with a second class honours degree. He worked as a tax consultant with KPMG (Stokes Kennedy Crowley at the time) and ran two small retail outlets before becoming financial advisor to Tony Ryan at his small and troubled airline Ryanair.  He worked as deputy chief executive of the airline between 1991 and 1994, and was then promoted to chief executive.  O’Leary lives near Mullingar and is married with two children.

Fare play

• Ryanair reports 26% increase in profit for the year, despite volcanic ash and the adverse winter weather.
• Passenger numbers for the year were up 8%, with the airline carrying 72 million people