IAA threatened to ground 162 Ryanair aircraft in early 2018

O’Leary tells High Court that COO Bellew handled certification issue ‘very well’

Regulators threatened to ground 162 Ryanair aircraft after hearing that maintenance certificates had not been updated in early 2018, the High Court was told yesterday.

It emerged in court that safety watchdog, the Irish Aviation Authority (IAA), did not carry out the threat when chief operating officer Peter Bellew gave his word that the craft had undergone the proper maintenance checks.

Ryanair chief executive, Michael O'Leary, confirmed that the airline subsequently produced the documents, known as Airworthiness Review Certificates, within a deadline set by the authority.

He agreed with Mr Bellew's senior counsel, John Rogers, that the chief operating officer handled a potentially serious issue for Ryanair "very well".

Mr Rogers was challenging Mr O’Leary’s claims that there were problems with Mr Bellew’s performance.

Mr Bellew found in February 2018 that certificates relating to 162 craft, one third of Ryanair’s fleet, had not been properly updated, even though the required maintenance checks had been done. He told Mr O’Leary and brought it to the IAA’s attention. Mr O’Leary told the court that he had given Mr Bellew credit for this at the chief operating officer’s review in March 2018.

Following that review, Ryanair granted Mr Bellew 100,000 share options, priced at €14.40, part of an overall scheme to retain the company's senior managers.

The airline argues that when he accepted this, Mr Bellew signed an agreement barring him from joining rival carriers for 12 months after leaving the company.

Ryanair is taking legal action to prevent the chief operating officer, who is leaving the airline, from joining competitor, Easyjet, next month.

Mr Bellew says that the agreement is null and void and has pledged to honour confidentiality obligations to Ryanair after he leaves.

Mr O'Leary said he brought Mr Bellew back to Ryanair in 2017 from Malaysia Air, where he was chief executive, to quell unrest amongst pilots that followed a rostering mix-up that forced the cancellation of thousands of flights.

“I specifically wanted to get him back because he was was well known amongst pilots, I tried to get him to try to head off unionisation,” Mr O’Leary said.

Ryanair agreed to recognise trade unions to avoid strikes in Christmas week 2017. Mr Bellew opposed this decision at a management meeting.

Not qualify

To entice Mr Bellew back, Mr O’Leary offered him €550,000 a-year, a bonus of up to €500,000 and a €1.13 million payment to compensate him for losing out on share options when he first left the airline in 2015.

Mr O'Leary compared it to signing Manchester City star forward Sergio Aguero, but added that he did not expect to have to tell his "goalscorer" what part of the goal to score in.

He agreed he had stopped Mr Bellew from dealing directly with unions following a meeting with a German union because Mr Bellew had “basically given them everything that they wanted”.

Mr O’Leary denied describing Mr Bellew as being “too nice for Ryanair” and that the COO “was a lover and not a fighter”.

He told Mr Bellew in November 2018 and again in March this year that he was unhappy with the chief operating officer’s performance in key areas.

As a result, Mr O’Leary told him in March that he would not qualify for the airline’s 2019 share option scheme, but that if he improved his performance over coming months, this would be reviewed.

Mr Bellew informed Mr O’Leary in early July that he was leaving Ryanair. Mr O’Leary said Mr Bellew informed him last July he was resigning from his role as COO, citing lack of sleep and stress, and “would probably go travelling”.

The executive subsequently confirmed on July 17th that he was joining Easyjet in January 2020.

Mr O’Leary told the court that, immediately on hearing this, he reminded Mr Bellew of the non-compete clause. Mr Bellew subsequently told Mr O’Leary that his advice was that he was not bound by this.

The court heard that the clause states that Mr Bellew cannot join “any business” providing air passenger services “wholly or partly” in competition with Ryanair.