Ryanair’s O’Leary: Who Knew Being Nice Could Be so Profitable?

Ryanair CEO: Improved Service 'Paying Off in Droves'

For the first 20 years of his career in the airline business, Ryanair CEO Michael O’Leary liked to think that he was always right and his customers always wrong.

Now with a 66 percent jump in full-year profit, nine million additional passengers, and the outlook for the next 12 months looking similarly rosy, European aviation’s enfant terrible is singing a different tune.

Read More: Ryanair Full-Year Results

“If I’d only known that being nice to customers was going to be so good for my business I would have done it years ago,” the Irish executive said in an interview this month.

With an eye on the successful marketing strategy of discount retailers like Aldi or Ikea, Ryanair has pursued a full-fledged image revamp. Out with irritants ranging from excessive baggage charges to its ebullient on-time arrival trumpet. In with business-friendly perks like reserved seating and serving primary airports instead of dusty airstrips in the countryside.

The aim is to turn a brand once known for being “cheap and nasty” into one offering good value, O’Leary has said. Gone are the days when offering the lowest fare alone pulled in the public. With full-service carriers like Lufthansa or Air France rolling out their own versions of no-frills airlines, competition in the sky for cheap tickets has heated up.

The good news for Ryanair shareholders is that cuddling puppies and eating one’s words appears to be good for business. Ryanair shares have risen 85 percent since the beginning of last year when it started introducing changes, and profits are at an all-time high after falling for the first time in five years in fiscal year 2014.

“Everybody loves a converted sinner,” O’Leary said. “We have learned humility, which when you’re Irish that’s a tough lesson to learn -- humility doesn’t come easy to us -- and that we have to keep learning and listening to our customers.”

Before it's here, it's on the Bloomberg Terminal. LEARN MORE