Change seems to be the order of the day at Ryanair. This week chief financial officer Howard Millar announced that he is leaving the airline where he has worked for more than two decades at the end of this year. His right-hand man, current finance director, Neil Sorahan, will succeed him.
His move follows deputy chief executive Michael Cawley’s decision to leave the company earlier this year, also after two decades.
Since he left, he has taken on a number of directorships, one at his old employer and the chairmanship of State tourist body, Fáilte Ireland.
In a change of a different kind, last February, Ryanair appointed its first-ever chief marketing officer, Kenny Jacobs, who has taken charge of marketing, public relations and communications, allowing O’Leary to step back from his front-and-centre role in these areas.
Given how playing that role has led to him being closely identified with the company he runs, it is not surprising that speculation about his future intentions flares up regularly.
However, instead of fanning those flames, Millar’s announcement seems to have had the opposite effect.
The general consensus is that he is leaving because the top job is not likely to become available for some time and, if he were to stay at the airline, he could possibly miss opportunities to take on such a role somewhere else.
In short, industry sources say O’Leary has signalled that he intends to stay on as Ryanair gears up for further expansion on the back of its purchase of 180 new craft.
One observer says that Cawley and Millar would have been regarded as internal candidates for the top position, but given that it is not going to become available in the near future, they decided to move on.
There is no suggestion of rancour in either departure. Cawley has already joined the board as a non-executive director and Millar is set to do the same next year, after he has left his full-time job at the company at the end of December.
David Holohan, an analyst with Irish firm Merrion Stockbrokers, says the timing of Millar’s announcement might have taken some by surprise. “But it’s a clear indication that Michael O’Leary is going to be CEO through the next growth phase into 2019,” he adds.
Ambitious plans
That growth phase involves ambitious plans to increase passenger numbers by close to 40 per cent from the current level of 80 million a year to more than 110 million.
While O’Leary has hinted in the past that he was considering leaving in the medium term, it looks like the temptation to stay on and oversee this was too much.
However, he will be doing that without two people who worked closely with him over the past two decades on implementing the strategy that has brought the airline to point at which it is at today.
Both are acknowledged to have brought particular skills to the table, Cawley at the operations side, where he brokered a lot of Ryanair’s deals with individual airports and Miller in finance, where he helped to develop the airline’s pared down, low-cost model.
He recently oversaw the airline’s first bond issue, through which it borrowed €850 million from the capital markets to help fund the purchase of the new craft, the first of which are due to start arriving in the company’s hangars this autumn.
Sources suggest that both he and Cawley have helped to counterbalance or even rein O’Leary in at times and their absence could see things at the airline become a bit more volatile.
However, another industry watcher, Oliver Sleath at Barclays in London, does not believe that there is much cause for concern on this front.
“Michael O’Leary himself knows that he needs to be reined in a bit,” he says.
Image change
Sleath points out that Ryanair has effectively hired a new frontman in Kenny Jacobs, who has taken charge of its communications. At the same time, he argues that it appears to be managing its image change and the transition to the new strategy announced last autumn very well.
On top of that, he says that the markets regard Sorahan, Millar’s successor, as very safe pair of hands who already has more than a decade at Ryanair behind him and therefore knows the business well.
Jack Diskin of Dublin firm, Goodbody Stockbrokers, agrees that is how the incoming incoming finance chief is seen.
Investor reaction to Monday's news was muted, he says, indicating that the markets are not concerned at the change or the fact that O'Leary remains at the helm. High-fliers: Ryanair appointments Neil Sorahan, chief financial officer designate
Joined Ryanair almost 12 years ago as treasurer from building materials group, CRH, where he had worked for 11 years. He became finance director in June 2006, making him Howard Miller’s deputy. He has managed its treasury function, taken part in investor roadshows and was most recently closely involved in its €850 million bond issue.
Kenny Jacobs, chief marketing officer
Joined Ryanair in February from financial services website operator, Moneysupermarket plc, where he held the same title. He has spent most of his career in retail, working as marketing director for Tesco Ireland and then brand director for Tesco UK. Before that he worked for German retailer Metro Group in a number of roles in Europe and Asia.
