ANALYSIS:AIRLINE PASSENGERS know all about delays, but Ryanair's shareholders have had to endure a different kind of patience. It's been a 13-year wait, but finally there is a dividend to divvy up.
Over that period, European airlines have felt obliged to mimic Ryanair’s low-cost model, while disgruntled investors wanted Ryanair to be more like other companies in one respect: they wanted a return. Now the airline’s no-dividend policy has been abandoned – not that there was any pressure from shareholders, Ryanair was keen to stress.
“I think this is a complete surprise to them,” said Ryanair deputy chief executive Michael Cawley, holding down the fort in Dublin while chief executive Michael O’Leary took London.
But what else could they do with its “obscene” level of cash? Lift its pay freeze, perhaps?
Cawley wasn’t having much of that. In any case, wasn’t it enough that Ryanair had avoided redundancies and created jobs?
“We put it to the board that they should have a generous management bonus, but they rejected that,” he laughed.
There are not many Irish companies who can make this joke – if only because many Irish companies seem to approve generous management bonuses automatically despite being considerably less successful than Ryanair.
This year, there’s no need for the remuneration committee to do anything in order for O’Leary to cash in. His €20 million share of the €500 million dividend payout is not at all bad when you consider that the reason Ryanair has so much cash to spare is O’Leary’s failure to bag a new fleet of Boeing aircraft at a price he liked.
Talks with Boeing to buy 200 aircraft ended late last year.
Ryanair is “absolutely not actively pursuing negotiations with Boeing”, Cawley said. “They know our price,” he added, seconds later.
Of course, blowing its cash in special dividends may convince aircraft manufacturers that Ryanair is not bluffing on its final offer.
So, then, to Aer Lingus. A third- time-lucky bid? No, says Cawley. So why not sell Ryanair’s stake then? “If the price is right, everything is for sale,” said Cawley. He had “no comment at all” on the performance of Aer Lingus chief executive Christoph Mueller, except to say that, even if Mueller was getting it right, it was no substitute for having Ryanair as its owner. “They’re right back into Fortress Dublin now,” noted Cawley of Aer Lingus’s ambitions, before feigning to forget the name of its latest strategic partner.
“Who cares, like?”
Arguably, the side issue of Aer Lingus’s and Ryanair’s long-term unhappiness about Dublin Airport Authority charges, aviation taxes and EU compensation rules are distractions. Ryanair is taxiing down the runway, destined to become the fifth-biggest airline in the world, but it is still waiting to be cleared for take-off.
Yesterday, it emphasised that even without a Boeing deal, the airline would continue to expand as flag carriers falter and clear the airfield. But its inability – this time around – to snap up aircraft at bargain basement prices means it now has to look beyond the audacious manoeuvres that made it the transport behemoth it is today.
