Ryanair restructures, Micheal O’Leary moves around

Ryanair today announced its results, as well as a new plan on how the airline will organise itself.

Ryanair Boeing 737-800 coming into land at Dublin Airport – Image, Economy Class and Beyond

If imitation is the biggest form of flattery, then the  is lifting a page from International Airlines Group (IAG) on how the group will operating in the next two months. The top of the airline will consist of a small management team to oversee the four Ryanair-owned airlines.

Four Ryanair airlines? Yes – there’s four of them out there. The group is made up of

• Ryanair DAC (the Irish arm)
• Ryanair Sun (the Polish arm that originally was a charter airline, but now operates as its own operation)
• Laudamotion (the Austrian Arm, ex Niki)
• Ryanair UK (the UK AOC)

Each of the airlines will have their own CEO’s and management teams, whilst the holding company will focus on efficient capital allocation, cost reductions, aircraft acquisitions and “small-scale Merger and Acquisition opportunities.”

So where does this leave firebrand Michael O’Leary?

Well, the new structure needs a leader – with Michael O’Leary becoming Group CEO, a role in which he will concentrate on the development of the group. He will take this role after agreeing on a new five-year contract with the airline (leading him in the post until 2024).

This will leave a spot open for a new Ryanair DAC CEO, who will work alongside the alongside the CEOs of Laudamotion and Ryanair Sun – who  will be appointed later this year
Michael won’t be alone – he’ll be supported by a small group of legal and finance teams

Ryanair believes that this group structure will deliver cost and operating efficiencies, and chances to look at acquiring other operations if appropriate. With over 200 Boeing 737 MAX for the main fleet, and additional Airbus A320 family for the Lauda fleet – there will be challenges ahead.

And the numbers?

Not the best – with €20 million loss, due to overcapacity in Europe and a 6% decline in fares. The stronger ancillary revenue growth was offset by higher fuel, staff and EU261 costs according to the airline.

Imitation is the sincerest form of flattery…

Whilst the numbers today can’t be described as great, the path of separating the units out and operating them as an orchestrated model works well for IAG Group might work well for Ryanair Group – as it allows the individual units to focus as needed – whilst having big power backup in the reserve.

And as for acquisitions? With competitors falling by the wayside, there may be more room at the Ryanair inn..

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