O'Leary's Wealth Soars on Ryanair Charm Offensive
For Ryanair Chief Executive Officer Michael O’Leary, being nice has its rewards.
The Irish billionaire who in the past has derided passengers as “stupid” and environmentalists as “lying wankers” has become almost $500 million richer since the notoriously gruff airline embarked on a charm offensive last year.
O’Leary, 54, has a 3.8 per cent stake in Ryanair, which closed at a record high of €14.66 on Wednesday, rising five per cent since the beginning of the week. His $1.3 billion fortune has risen 26 per cent in 2015, according to the Bloomberg Billionaires Index.
“Every time you’re flying Ryanair, you’re adding to my share price, you’re adding to my profitability,” the billionaire said at a lunch hosted by the Institute of Directors in Dublin in September. “I need to keep being wealthy. Because if I’m to support one of Ireland’s biggest loss-making cattle breeding operations, and Ireland’s biggest loss-making national stud horse operation, I need everyone in this room to fly Ryanair.”
Robin Kiely, a Ryanair spokesman, said the company doesn’t comment on personal affairs and that O’Leary wasn’t available to comment.
The budget airline’s share price has more than doubled since January 2014 when it began a concerted effort to improve customer service by giving passengers the ability to choose seats and building a new, more user-friendly website. More recently, O’Leary has even extended his benevolence to competitors, offering to feed connecting traffic to long-haul rivals.
O’Leary was handed the reins of the business in the early 1990s by aircraft leasing magnate Tony Ryan, himself a self-made billionaire. The protégé sought to build Ryanair into a European model of Southwest Airlines with an obsessive focus on costs and fast turnaround times, and by using a single aircraft type to simplify maintenance and training.
Ryanair has grown from a fleet of one in 1985 into Europe’s biggest discount carrier. The company aims to carry 105 million people in the fiscal year ending in March, more than the combined passenger total carried by its low-cost rivals EasyJet Plc and Air Berlin Plc in the 12 months ending in September.
O’Leary has also become the public face of Ryanair. His brash persona and media stunts - such as getting a taxi license to speed his journey to work and driving the Batmobile to a press conference dressed as Robin - have helped boost the carrier’s no-frills brand.
Along the way, O’Leary raised eyebrows for publicly rebuking customers who failed to print their boarding passes and scorning environmentalists amid moves by the government to raise taxes on airfare to curb emissions. Criticism of the indifferent attitude towards customer service was shrugged off as its passenger numbers continued to grow.
Pressured by EasyJet’s successful business-oriented brand makeover, the airline hired a marketing guru, instructed its staff to be more courteous and began dropping practices customers hated, such as baggage charges and random seating.
They called it the "Always Getting Better" plan, and since its adoption, Ryanair’s monthly passenger loads have steadily risen, hovering above 90 per cent since the start of its fiscal year in April. Last year, the airline boosted profit guidance five times and in September raised its full-year profit target 25 per cent.
News by Bloomberg, edited by Hospitality Ireland