Where Are They Now?

Catching up with finance chiefs who appeared in the early issues of CFO Europe.

Maas isn’t quite ready for a quiet life. In April, the Institute of International Finance, a group of some 375 financial-services companies, issued a report about the current credit crisis based on an analysis by a working group chaired by Maas. He’s also chairman of a university hospital and medical faculty.

But when it comes to corporate finance, he’s happy to let the next generation take charge. Today’s CFOs, he says, need to help drive their company’s strategy from the front, rather than managing back-office functions. And they also must be able to convince the markets and their colleagues — including the CEO — of the rights or wrongs of the company’s financial or strategic plans. “It’s an exciting time for every CFO now,” he says. “I started on the board of ING when I was 44 years old, so why not let another young guy do it?”

Michael Cawley

1998: CFO, Ryanair

2008: Chief Operating Officer, Ryanair

These are turbulent times for airlines. Record fuel costs and shaky consumer demand have whipped up what Michael O’Leary, chief executive of Irish budget carrier Ryanair, has called the industry’s “perfect storm.” Just recently, Oasis Hong Kong Airlines shut down while in the US, Frontier Airlines, Skybus and ATA Airlines filed for bankruptcy protection.

For Michael Cawley, Ryanair’s chief operating officer and former CFO, the string of failures highlights the financial perils of the industry. It also underlines his belief that for a business to succeed, it has to be prepared for bad weather. “I remember in the first seven years of my life here, I was asked whether the world would end if fuel, which we’d bought at $20 a barrel, would go to $30. I said, ‘Well it might,’” he recalls. “And here we are at $100 wondering, ‘Will we cope with $150?’ Flexibility is critical.”

Cawley knows all about the need for financial flexibility in the airline business, having been Ryanair’s finance chief for six years. Joining the group shortly before its IPO on the Irish Stock Exchange and Nasdaq in 1997, he oversaw those launches and a secondary listing in London the following year. Even then, after more than a decade of growth, Ryanair showed only a sliver of its potential. When CFO Europe interviewed Cawley about the business in 1998, it had about 4.6m passengers every year. Today, it has more than 50m.

Last year, it announced that revenue increased 32% year-on-year to €2.2 billion, while profit increased 33% to €401m. In comparison, British Airways posted a 35.7% drop in profit, to £290m (€360m), on a 3.4% increase in revenue to £8.4 billion.

How has Ryanair succeeded where others have failed? Managing risk has been crucial, especially for a company growing as quickly as the Irish icon. Cawley describes Ryanair as “very conservative” financially — it doesn’t pay a dividend and has generated more than €2 billion of free cash flow. And he admits that it “probably loses a couple of points of ROI performance” by having no gearing other than for its aircraft purchases.


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