O’Leary to remain at Ryanair for five more years
Ryanair chief to boost fleet to more than 400 jets by 2018
Michael O’Leary has said he will stay on as Ryanair CEO for another five years. Photographer: Dara Mac Dónaill/The Irish Times
Michael O’Leary, who built Ryanair into Europe’s biggest discount airline over two decades, pledged to stay another five years and render its dominance complete as competitors exit short-haul flying.
Dublin-based Ryanair will seize on the likely failure of major carriers such as Air France-KLM Group to earn profits on short routes and the withering of networks at Alitalia in Italy, Iberia in Spain and SAS in Scandinavia, the 52-year- old chief executive officer said in an interview in London.
Mr O’Leary, who has regularly promised to quit Ryanair “in a couple of years,” will boost the fleet to more than 400 jets by 2018 and aims to double the company’s €8.65 billion market value over the same period.
That could pave the way for a shift into low-cost trans-Atlantic flying as demand for wide-body planes eases, making them cheaper, he said.
“There’s going to be a push for the legacy carriers to walk away from the loss-making, short-haul business, handing over more and more market share,” Mr O’Leary said.
“The rate of change is going to speed up. The next five years look very interesting and exciting and therefore there is no reason for me to leave.”
Shares of Ryanair have posted a 110 per cent price gain since May 2008 and traded at €6.04 as of 10.21 am in Dublin.
Air France-KLM, Europe’s biggest airline, has slumped 63 per cent over the past five years and Deutsche Lufthansa, the second largest, has declined 6.1 per cent.
Former national carriers including Air France, Lufthansa and British Airways parent International Consolidated Airlines Group are part-way through the latest revamp of short-haul flights that are unprofitable and becoming less sustainable as low-cost airlines expand operations.
Mr O’Leary said that the experiment - which has seen IAG set up a discount unit, Iberia Express, in Spain and Lufthansa develop plans to transfer European flights outside its hubs to low-cost division Germanwings - won’t succeed.
“The problem with all the flag-carrier airlines is they’re ultimately doomed to failure,” he said.
“They are doomed to fail because they’re not really committed to low fares.”
Only a handful of short-haul routes feeding profitable long-haul services will survive even at the biggest operators, while the likes of SAS and LOT Polish Airlines may be forced into a deeper retrenchment or collapse, Mr O’Leary said.
Under Mr O’Leary, Ryanair’s strategy of offering bargain- basement fares rendered profitable through the use of secondary airports and a minimum level of customer service has propelled it from 1.7 million passengers in 1994 to 79 million last year, with the company targeting 100 million by March 2019.
“We’ve re-invented the European airline industry away from this failed ‘50s and ‘60s model where you had to be rich to fly,” he said in the interview.
“And what we’re going to do in the next five years is going to be even more revolutionary.”