The King is dead, long live the King(s). Ryanair’s boss Michael O’Leary has been replaced as chief executive of the Irish low-cost carrier. According to media reports, the airline’s chief people officer Eddie Wilson has been appointed to the position of CEO effective September 1, 2019, while O’Leary steps up to being the overall chief of Ryanair Holdings.
A three-month transition period will see Eddie Wilson fully assume his new role as CEO of Ryanair, succeeding a rather controversial figure, Michael O’Leary, as the new public face of the budget airline. As of September 1, 2019, Wilson, alongside the heads of Ryanair Group’s smaller subsidiary airlines, will report to O’Leary, who will remain the overall chief executive of the holding group company, The Irish Times reported on August 30, 2019.
In a restructuring move, initiated after the company reported a €20 million loss in the third quarter of its financial year on February 4, 2019, Ryanair has become a holding group company comprising several airlines: the mainline, Ryanair, as well as smaller carriers – Poland’s Buzz (formerly Ryanair Sun), Austria’s Lauda and Malta Air.
“Over the next 12 months Ryanair Holdings Plc will move to a group structure not dissimilar to that of IAG,” the company stated in its Q3 FY19 report, taking a page from IAG’s book. According to Ryanair, the new company structure will allow to “focus upon efficient capital allocation, cost reductions, aircraft acquisitions and small scale M&A opportunities,” such as Ryanair’s takeover of Laudamotion back in 2018.
With the company structure overhaul, an executive reshuffle has also been in the works. Ryanair announced in February 2019 that O’Leary, whose five-year contract is due to come to an end this year, would remain on board for another five years, eventually stepping down as CEO of the airline and moving into the role of chief of Ryanair Holdings: “a role in which he will concentrate on the development of the group,” the company’s financial statement read.
At first, Peter Bellew, who had returned to Ryanair as chief operating officer, was tipped to take over the helm of the Irish low-cost carrier. But the succession plans were disrupted when, in July 2019, O’Leary made a surprise announcement of Bellew’s departure at the end of this year. One week later, rival carrier EasyJet disclosed that Bellew is set become its chief operating officer, the Irish Examiner writes. Ryanair has since launched legal proceedings in the Irish High Court against its outgoing COO.
New face, old problems
“Difficult times” is what awaits ahead, as the now-former Ryanair chief O’Leary states in an internal note to staff announcing Wilson’s appointment, TheJournal.ie reported on August 30, 2019. The executive reshuffle comes at a time as the airline prepares to cut up to 900 staff across the group.
Recently, Ryanair has had to curb its growth plans: in the first quarter of FY20, the group reported a 21% drop in profit, citing lower fares and higher expenses. An intense price war in the market has also put further strain on the company’s finances, which now expects less profit compared to FY19.
A major headache for the company has been the potential fallout from Brexit as well as the ongoing Boeing 737 MAX crisis. Ryanair has already grounded the five 737 MAX that were in its fleet and is now looking to take delivery of only around half, 30 out of 58 of planned jet deliveries in time for summer 2020 schedule.
Aside from Brexit and the MAX crisis, Ryanair has another problem on its plate: in the past few weeks, the carrier has faced industrial action from unions in the UK, Spain and Portugal. Interestingly, the airline’s new boss and former HR chief had previously been in charge of negotiations with trade unions.