“He’s a great PR man, though,” muttered one shareholder admiringly as Michael O’Leary strode past in full verbal flow. Pacing up and down the aisle at Ryanair’s annual general meeting in the company’s north Co Dublin headquarters, the chief executive was speaking without a microphone (“because we’re a low-cost airline”) as he fielded questions about what he himself described as the “serious management failure” of recent days, which has led to the cancellation of hundreds of thousands of passenger bookings.
Despite that crisis, and the resulting large media presence, proceedings went smoothly at the agm. The order of business was briskly disposed of by chairman David Bonderman, with the Ryanair board comfortably re-elected and all requisite motions passed. Everyone then seemed content to sit back for another episode of The Michael Show.
O'Leary leapt to his feet and got to work with a quick flip through a slideshow reporting continuing growth in all the important metrics. Share price up 14 per cent. Fares down 13 per cent. Then a repeat of his apocalyptic warning that a hard Brexit could see British holidaymakers confined to choosing between Ireland and Scotland in 2019. And the main event: another version of the mea maxima culpa he'd offered to the media three days earlier for the rostering meltdown that led to last Friday's initial announcement of six weeks of cancellations, and the botched way the company had handled the news.
“It was the right operational decision but was badly handled,” he said. “I genuinely regret we upset and worried millions of our customers over last weekend because they weren’t sure if their flight was going to be cancelled.”
Winning back faith
Shareholders were quick off the mark with follow-up questions, though most were also keen to sing the praises of the Ryanair miracle and O’Leary’s own track record.
But why had the problem not been foreseen earlier? “Every month for the last six months we’d been asking did we have enough cover for this roster,” said the chief executive. “But as we got into the weeds over this last week, it transpired that, yes, we were fully covered on the roster but instead of having about 150 standby pilots we had maybe 20 or 30.”
Shareholder Michael O’Neill said he had held off on booking eight flights because of uncertainty and asked whether O’Leary would guarantee no future cancellations. The answer was a blunt no; cancellations were always a possibility.
“I could certainly give a guarantee they won’t happen because of the rostering mess-up. There will not be a management screw-up in dealing with this over the next number of weeks. We will try to win back your business and your faith in our schedules and our rosters.”
Business as usual
Some shareholders seemed surprised by O’Leary’s assertion that the crisis had had little or no impact on business this week. Forward bookings were running a couple of percentage points ahead of the same time last year, he claimed. But not all were convinced and some warned of reputational damage.
“I spoke four years ago about the widespread perception that flying with Ryanair was not an enjoyable experience,” said Brian Graham to O’Leary. “You took it on the chin and you changed it – wonderful. But the gung ho aspect seems to have crept back into the company and the way that you did not see this coming. Surely that’s got something to do with the way that you deal with your pilots. It’s not good enough, and I feel it’s being done in my name.”
“We have upset people entirely unnecessarily,” O’Leary acknowledged. “So yes, we make mistakes. But we are not gung ho, I promise you.”
He also denied suggestions that there was a bad relationship between Ryanair and its pilots. “One hundred pilots will join our ranks in the next eight or 10 days. We are the airline of choice for young pilots. We have very good pay, we have fixed rosters. We do work hard and we expect everyone around here to work hard.”
Extra money was being allocated to certain bases – in Frankfurt, Berlin, Stansted and possibly Dublin – to address a shortage of pilots in those regions. But there would be no overall pay increases for pilots. And he was adamant that Ryanair pilots did not want unionisation. “That may surprise the unions and some of the journalists here, but we don’t expect that to change.”
Deeper problems
Talking to the same journalists at a media briefing later, O’Leary derided suggestions that the roster crisis was the result of deeper problems with pilots. “Business here continues to operate very well,” he said. “We made a mess of it over the last week. Fine – we have our hands up. You guys are all excited: ‘Oh the end of the world is nigh, the Ryanair model is falling asunder.’ We’ll just get back to running a business and you guys will go to find something else.”
But he couldn’t resist a jab at the pilots.
“I respect pilots,” he said. “If you sit in the cockpit of a plane flying four or five hundred miles an hour and landing in 40ft or 50ft of visibility, you have total respect. That doesn’t mean they don’t get very well paid for doing what is a very easy job. We are in an era now where the computer does most of the flying. They are very skilled professionals. But are they hard-worked? No.”
