13-Sep-2010 1:03 PM

Ryanair to move away from 'pile it high and sell it cheap' strategy

Ryanair CEO Michael O’Leary stated the carrier plans to move away from its “pile it high and sell it cheap” strategy, stating its average fare of EUR40 is unsustainable due to cost pressures as it moves to airports closer to city centres (The Observer, 12-Sep-2010). Mr O’Leary also commented Ryanair will require a new CEO as growth slows, as his controversial management style would not be suitable in a more mature business. He added the carrier will need to become a more sophisticated business, promoting attributes other than its cheap fares. Mr O’Leary expects to remain at the carrier until it nearly doubles in size.

Ryanair: “We have to move away over the next number of years from being obsessed with having the lowest fares in the market … Growth rates start to slow down significantly and it becomes more about the brand game, telling all the lies that you need to tell to get the fares up … When we are twice the size we are now, at around 400 aircraft, then the growth rate slows down to 2% or 3% per year. The shareholders will want a return. You will need a different management then. We won't need my dog and pony show, which is about generating publicity. Every company has to move from being the high-growth Robin Hood,” Michael O’Leary, CEO. Source: The Observer, 12-Sep-2010.

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