Ryanair's investors expect more than belligerence from O'Leary

时间:2019-08-22 责任编辑:鱼捅 来源:合乐888首页 点击:67 次

“We expect more failures this winter,” said Michael O’Leary. Ryanair’s chief executive, thankfully, wasn’t warning of more failures to remove . Nor was he referring to Ryanair’s unacceptable corporate failure to apologise to Delsie Gayle, the customer subjected to the attack.

Rather, he was predicting that some , which seems a reasonable bet. Most of the usual ingredients for a crisis among small European airlines are in place. First, oil prices – and thus the cost of jet fuel – are rising and many airlines haven’t sufficiently hedged the financial risks. Second, interest rates in the US are rising, which is supporting the dollar, the currency in which oil is priced. Third, fares are falling. O’Leary estimates that the European short-haul market expanded by 8% last year, which looks a case of too much, too soon. Ryanair’s own prices fell 3% in the first half of its financial year, and more of the same is expected in the second.

This prophecy of doom for small rivals wasn’t issued for its own sake. O’Leary, after seeing Ryanair’s shares slide by a third of their value in 12 months, wanted to remind investors that the airline he runs can withstand some financial pressure. That’s true enough, of course. Post-tax profits fell 7% in the half to €1.2bn but clearly has a strong balance sheet, firmer fuel hedges than most and an entrenched position in the market. The airline may even be able to pick up some loose pieces if and when third-tier rivals fail.

Yet it’s hard to escape the impression that O’Leary prefers to talk only about issues he regards as safe. One of the big developments at Ryanair in recent months was the vote of almost one third against the re-election of the chairman, David Bonderman. That rebellion flowed from the suspicion that Ryanair’s boardroom is weakly governed and that hard questions have not be asked about last year’s rostering cock-ups and this year’s strikes. Staff at most European airlines are unionised but few have made adoption look as difficult as Ryanair has made it seem.

O’Leary referred to “noise”, by which he presumably meant the strikes and cancellations that contributed to this month’s profits warning and the protest against Bonderman. He should know that a large number of shareholders perceive the quarrels to be more serious than that. By all means boast about the underlying corporate resilience. But, come on, by this stage investors expect more than belligerence.

Dunkerton takes on role of argumentative founder

A scrap between a departed founder and a buttoned-up board can provide years of entertainment, as easyJet’s shareholders will remember. Sir Stelios Haji-Ioannou fires off fewer missives from Monaco these days, but there was a time when he campaigned to unseat the chairman and disputed almost every purchase of a new plane.

Julian Dunkerton left Superdry only in March this year but he’s started promisingly in the role of argumentative founder who thinks his creation is being mismanaged. The retail chain is on “completely wrong path” after “probably the most disastrous eight months you could imagine”, he told the Sunday Times at the weekend.

If Dunkerton were referring only to the share price, the period since his exit does indeed look a catastrophe. Superdry’s stock market value has . Indeed, at 732p, the shares are as low as they’ve been since late-2014 when Dunkerton gave up the job of chief executive to became product and brand director.

Yet more has happened to Superdry than just the founder’s departure. The retail fashion market is plainly weak and, as the company freely admits, the range of products is too concentrated on jackets and hoodies. The latter explains the effort to diversify into womenswear, denim and sportswear. But, if that is what Dunkerton means by the “wrong path,” he may struggle to win independent converts. Aberdeen Standard Life, which holds a 10% stake, describes itself as “a supportive shareholder that supports the board and management in their strategy to improve the business performance.”

Dunkerton owns 18.5%, even after selling a quarter of his stake in July, so he has more voting clout if it ever gets that far. But, if he wants to pursue this dispute, he’ll have to put an alternative strategy on the table, argue for it in detail and explain why he chose to leave rather than fight for his vision from within the boardroom. In the absence of a public plan, his comments read more like a simple cry of pain at the share price.