O'Leary to remain with Ryanair until at least 2024, as airline reports €20m loss
- Stan McCarthy to become chairman of the airline next year
- Michael O'Leary signs new five year contract
Ryanair has reported a €20m loss for the three months to 31 December 2018.
The loss was driven by a 6pc decline in average fares, according to a trading update from the group. During the period the low-fares airline also experienced higher fuel, staff and EU261 costs.
However ancillary revenue, that is revenue from non-ticket items such as baggage fees and in-flight sales, grew 26pc during the three months.
Meanwhile, Michael O'Leary has agreed a new five year contract with the airline, which will see him remain as chief executive until at least 2024.
Under a new group structure Mr O'Leary will oversee the development of Ryanair Holdings, and its four airline subsidiaries, Ryanair DAC, Laudamotion, Ryanair Sun and Ryanair UK.
Both Ryanair's chairman, David Bonderman, and independent director Kyran McLaughlin will spent down at the group's AGM next year.
Former Kerry Group CEO Stan McCarthy, who joined the board in May 2017, is to take up the position of deputy chairman from April 2019, and will transition to chairman of the board in summer 2020.
Overall and revenue was up 9pc to €1.53bn, equating to a revenue increase of 1pc per passenger.
Ryanair’s Michael O’Leary said: "While a €20m loss in Q3 was disappointing, we take comfort that this was entirely due to weaker than expected air fares so our customers are enjoying record low prices, which is good for current and future traffic growth."
"While ancillary revenues performed strongly, up 26pc in Q3, this was offset by higher fuel, staff and EU261 costs."
Passenger growth increased 8pc during the period, while the airline's load factor was 96pc.
The airline added that priority boarding and reserved seating grew strongly during the three months.
Elsewhere, it said that a "transformational improvement" to its digital platform is underway and would be completed before year-end.
"This will further improve personalisation, and triple capacity, as we grow to 200 million guests per annum and welcome over 1bn platform visits each year."
In an analyst call this morning, Mr O’Leary said the new company structure would see a small senior management team oversee the development of four airline subsidiaries; Ryanair DAC, based in Ireland, Laudamotion, Ryanair Sun and Ryanair UK.
This senior management team will consist of him, group legal, and group finance, with the structure evolving over the next 12 months.
Meanwhile, the four airlines will each compete against each other in areas such as airline allocation and cost cutting.
The key challenge, Mr O’Leary said, would be to get the right CEO in Ryanir and “hold his or her hand over the next 12 months.”
A “lot” of group services, such as Ryanair Laboratories, would continue to be operated out of Ryanair DAC, however procurement would be moving to Ryanair Sun in Poland.
He added that Ryanair would be encouraging more Eastern and Central European pilot recruitment.
Elsewhere, and he said he was “taken aback” by recent comments from competitors, which he said “brushed over poor results.”
He urged caution in respect of ticket pricing this summer.
Confirming Ryanair had sold 18pc of summer seats so far this year, at an average price 1pc lower than last year, he said it was “far too early” to be guiding optimistically.
Mr O’Leary added that airlines should be more cautious that Easyjet and Wizz were on their analyst calls.
“It’s not that I’m pessimist for pricing this summer, but I am more conservative than competitor airlines,” Mr O’Leary said.
On the subject of a share buyback programme, Mr O’Leary said the airline would like to do another buyback, however this would depend on how Brexit played out over the next few months.