Ryanair chief flying high as he prepares for new role in the boardroom

A giant chess board; an artificial putting green; staff playing a lunchtime game of air hockey. For an airline that built its success on having zero frills – unless you were prepared to pay for them – Ryanair’s new headquarters in a business park five minutes away from Dublin Airport is, well, very full of frills.

Upstairs, trendy technology types are drawing on the walls (in non-permanent ink), in an area that has been devoted to Ryanair Labs, a new department working on features such as a TripAdvisor-style feedback forum for the airline’s website, which once took you through so many stages before you could book that it was difficult not to lose the will to live.

This is all a far cry from the dusty, cramped “rat hole” the airline inhabited for decades before its move earlier this year, according to Howard Millar, its deputy chief executive and chief financial officer, who steps down this month after nearly 23 years.

Of course, there are a few signs that this is still the same controversial budget carrier, whose colourful chief executive, Michael O’Leary, once called passengers “stupid” if they didn’t print off boarding passes before arriving at the airport. A sign above a slide linking the first and ground floors warns that it is not suitable for pregnant women, people with injuries or “gobs-----”.

Even so, it is a very different company from the one Millar joined in April 1992. He took a role at Ryanair – first as financial controller – as a way back to Ireland from Saudi Arabia, where he had been working for an Irish farming business.

“I was in the Middle East for four years. I was shot at by Saddam – a bit of Scud missile landed in my house in 1991,” recalls Millar.

As it turned out, such experiences were good preparation for life at Ryanair in the early days, when it had just six planes and was living hand to mouth. Millar thought he would be lucky if his new job lasted six months. “When I arrived at Ryanair, instead of the Gulf War, it was an Irish war,” he jokes. “The business was in a terrible state, no financial systems, no money, competing with Aer Lingus. It was a tiny business, six aircraft, and less than 900,000 passengers.”

Millar, who will join Ryanair’s board as a non executive director next year after a six-month “decontamination period”, is one of the three hard-nosed executives who transformed the airline from one that was flirting with collapse into a European powerhouse that expects to grow to 114m passengers a year by 2019. The other two are, of course, O’Leary himself and Michael Cawley, who also retired this year as deputy chief executive and chief operating officer and joined the board as a non-executive in August.

Millar had wanted to succeed O’Leary after two decades waiting in the wings but announced his departure in the summer after finally acknowledging O’Leary was never going to move aside.

Although he makes no secret of the fact he would like to be a chief executive elsewhere – or at least take on another hefty CFO role – for the moment he is settling for a portfolio career to avoid having to work away from Ireland while the youngest of his four children is still finishing school. “Obviously, would I have liked to be chief executive of Ryanair?” says Millar. “Yes. Is that option open to me? No. We are in a five- year [incentive] programme. Michael has signed off for another five years, I would have had to sign off for another five years as well, which would have put me at nearly 59. You know [at that age] you’re really kind of moving towards retirement age in terms of being a frontline manager.”

Millar will step up to the board during what has been one of the tumultuous periods in the history of Ryanair.

Looking back over his career, the aviation veteran reels off a volley of landmark events that he believes transformed the company from a no-hoper into arguably the most formidable force in European aviation. These include the decision to start flying to Stansted airport in 1991 and Ryanair launching its first low fare – £59 from Dublin to London – the following year. Then there was its first deal with Boeing for six 737s to replace its previous, “appallingly unreliable” BAC 1-11s.

Ryanair’s initial public offering in 1997 coincided with the deregulation of the European aviation market, effectively giving new airlines a green light to expand anywhere they liked on the Continent.

But were he to look back at the history of Ryanair in a decade’s time, Milllar says the events of the last 12 months will also prove to be a major turning point, even though they began with two unhappy events – two shock profit warnings in the autumn of 2013.

The warnings were a rare dent in Ryanair’s once chink-proof armour. A media frenzy ensued and pages of newsprint were devoted to analysing whether the cocky Irish airline was finally getting its comeuppance. Ryanair promised to change. A new “warm, cuddly” approach was announced.

The airline rolled out a stream of improvements, including fully allocated seating, a simplified website and a more flexible baggage policy. Unpopular fees were reduced and Ryanair introduced new products such as business fares.

The charm offensive paid off. In the first half of its current financial year, Ryanair saw profit after tax soar by 32pc to €795m and upgraded its guidance for the full-year for the third time in the space of just four months.

Millar says that despite the drubbing Ryanair received in those first months following the profit warnings, he has learned more in the past 12 months than he has in years. “I think this is going to completely change the airline, even from a stock market valuation,” he says.

However, he puts the main turnaround not down to Ryanair’s change of heart in how it treats passengers but to a critical change in advanced bookings to offer cheaper fares much earlier.

“We typically had a 20-week horizon,” he says. “When we did a sample of flights, say six months away, it turned out our fares were sometimes at the same price, sometimes fractionally lower and in some cases actually higher than the competitors.” This year Ryanair launched its summer schedule (for 2015) in September, three months earlier than normal, offering passengers prepared to book far in advance the cheapest fares. The model avoids having to slash fares at the last minute to fill flights.

The customer service changes, he says, are “veneers”. Many of the reputational improvements were also in the pipeline long before last year’s profit warnings, Millar points out. Ryanair had planned to use Aer Lingus – for which it made a third takeover bid in 2012, only to be thwarted by regulators – to take on easyJet in Europe. Aer Lingus would have been a more upmarket brand that could have appealed to the type of passengers easyJet was hoovering up.

“We would have had the more primary airport-focused upmarket brand, which would have been Aer Lingus. Then we would have had Ryanair – that was going to be the Tesco Value product,” he says.

Millar may not have got his stab at the airline’s top job and his role in helping to build Ryanair may often be overlooked amid the media circus surrounding O’Leary.

But he is able to remain philosophical. “There is a price for all of this,” he says of O’Leary’s high profile. “I can go down to my local pub and have a pint, or I can walk into the local village here and nobody knows who the hell I am. Michael cannot go into any pub or restaurant, he doesn’t have that.”