Ryanair to restructure, posts quarterly loss

Ryanair on Monday unveiled plans for an overhaul to create four subsidiaries, as the Irish no-frills airline revealed also a third-quarter loss of 20 million euros and said a no-deal Brexit "remains worryingly high".

Mirroring a set-up by British Airways and Iberia owner IAG, a statement said Ryanair planned to have four distinct operations, each with its own chief executive.

The airline's current chief executive, Michael O'Leary, will head up the overall group, Ryanair said. Under him will be Ryanair DAC overseeing the Irish operations and there will be also Ryanair UK, Laudamotion for its Austrian business and Ryanair Sun, or Polish unit.

"Having agreed to this group strategy as the best way to grow Ryanair, Sun, Lauda and other possible airline brands, Michael O'Leary has agreed a new five-year contract as group CEO," the statement said.

It added: "Over the next 12 months Ryanair Holdings Plc will move to a group structure not dissimilar to that of IAG. 

"A small senior management team will oversee the development of four airline subsidiaries... (focusing) upon efficient capital allocation, cost reductions, aircraft acquisitions, and small scale M&A opportunities," the statement said

On the latest group earnings performance, O'Leary said that while the 20 million euros ($23 million) net loss was "disappointing", the group takes "comfort that this was entirely due to weaker than expected airfares".

Last month, Ryanair cut its annual profit forecast for a second time, blaming lower airfares caused by overcapacity in the European short-haul sector.

Following Monday's update, Ryanair's share price slumped 4.4 per cent to 10.94 euros.

“For all the controversy and success, investors are entitled to at least question if O'Leary is the right man to take the company forward given the patchy recent track record and a stalling share price," said Russ Mould, investment director at AJ Bell.

"A new management structure... will probably put some distance between him and the unions."

Ryanair's recent performance has been hit also by pan-European strikes last year that forced it to cancel flights, affecting thousands of passengers, and offer improved pay deals to staff via landmark deals with unions.

On Monday meanwhile, the Dublin-based airline again spoke out on Brexit.

"The risk of a 'no-deal' Brexit remains worryingly high. While we hope that common sense will prevail and lead to either a delay in Brexit or agreement on the 21-month transition deal currently on the table, we have taken all necessary steps to protect Ryanair’s business in a no-deal environment," the statement said. 

Britain accounts for about one-quarter of revenues at Ryanair, causing the airline to warn frequently about potential fallout from the UK's rocky path to exiting the European Union.

And while the airline sector as a whole took a knock last year from high oil prices, a sharp reduction in fuel costs in recent months has removed such pressures.

But the European short-haul sector remains weighed down by fierce competition despite some consolidation, including Ryanair's purchase of Austrian carrier Laudamotion in 2018.