Another difficult week for O'Leary

IT HAS been a difficult few weeks for Michael O’Leary and Ryanair for a variety of reasons. Last month, the outspoken airline boss was forced to apologise to Mr Justice Peter Kelly in the High Court for misrepresenting him in a letter sent to transport minister Noel Dempsey.

A letter of apology was subsequently despatched to the minister but not before the judge had signed off on it. The judge warned O’Leary at the time that he was in danger of being held in contempt of court and had some harsh words for the businessman in his ruling.

Then, last week, Ryanair was forced to apologise in court again for repeating this misrepresentation to the Minister in a separate letter.

Yesterday, O’Leary did a U-turn on the payment of compensation to passengers left stranded by the volcanic ash crisis.

Ryanair would have faced legal proceedings had it stuck to its original course and O’Leary, wisely, decided to back off rather than break EU law.

O’Leary might have a point about the compensation required of airlines in the event of flights being cancelled, particularly for something as unpredictable as volcanic ash, but he went about it the wrong way.

Is the great man losing his touch?

O’Leary’s personality dominates at Ryanair and he is widely recognised as the force behind its success. But the airline’s board, particularly its non-executive members, has a duty to shareholders to make sure the company is properly run.

So what does the board of Ryanair make of his actions in both these cases?

On March 30th I submitted questions to Ryanair for chairman David Bonderman relating to the High Court ruling against O’Leary.

Given that the second highest court in the land had given the airline and its chief executive a public slapping, I asked if O’Leary would be called to account for his conduct and if he had contravened the company’s code of business conduct and ethics.

“It would not be appropriate for me to comment on these issues,” was the reply from Bonderman.

It will be interesting to see if Ryanair’s shareholders demand more measured answers at the airline’s annual meeting this summer.