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Ryanair And The Case Of The Muddled Message

Posted on March 20, 2015 at 5:30 PM

There's something in the air when it comes to business attitudes to regulation. Sometimes they seem to veer from exasperated compliance to unadulterated flippancy.

That's unfortunate, because there's this new EU Market Abuse Regulation (MAR) about to land - as explored in the last Board Talk.

Over the last year to 18 months, a stream of regulatory announcements have revealed businesses concerned to 'set the record straight ' about their coverage in the media. I don't have hard data: but it feels as if the number of such announcements is rising.

Is there more anxiety about falling foul of the regulator? Or is the FCA calling and demanding that businesses issue clarification (although its own guidance effectively says 'don't wait for us to come and ask you to clarify - but the market must not be misled.') When MAR comes in, it will be EU rules - and no FCA guidance.

Here's an example to concentrate the mind. On March 10, from company news available via Hargreaves-Lansdown:


Budget airline Ryanair has confirmed it is considering offer transatlantic flights after years of speculation.

"We are interested in doing transatlantic flights," Kenny Jacobs, Ryanair chief marketing officer said at German travel trade show ITB in Berlin.

 "We expect the grip of the [existing] transatlantic carriers will come to an end quite soon.

 "Low cost competition on transatlantic flights would be good for Europe. We're very interested in it - there is no reason why we couldn't [do it] in five years' time." ....

Ryanair shares were up 0.48% to €10.52 at 10:57 on Tuesday.

And on March 20:


Irish low-cost airline Ryanair has abandoned plans for a transatlantic airline.

In a press statement released on Thursday, Ryanair's board said: "In the light of recent press coverage, the board of Ryanair Holdings Plc wishes to clarify that it has not considered or approved any transatlantic project and does not intend to do so."

It came as a surprise after the company's on Monday said its board approved a plan to operate budget flights to the US within five years. (typo in story as on HL site: what's missing ? 'website?')

The Financial Times also carried the original story on March 16:

Ryanair board approves plan for transatlantic airline. 

And on March 19: 

Ryanair in U turn on plans for transatlantic airline 

The FT wrote: "Michael O'Leary, the Irish airline's outspoken chief executive told the Financial Times that Ryanair had f****d up. 'It was a miscommunication' he said."

There was then a bit of a rigamarole from Ryanair about how no one had been around to retract a statement given to the FT because it was St Patrick's Day.....lots of unfortunate reinforcement of 'unconscious bias' along the way.

And finally in the FT story on the 19th: 'Mr O’Leary confirmed on Thursday that Ryanair still wanted to pursue the transatlantic project, and was in talks with aircraft makers.' (my emphasis)

Generally speaking, here's how it works: if, as a business, you have plans that are subject to negotiation you do not have to disclose them to the market. If they leak - ie the story is true - then you still don't have to disclose if you have a legitimate reason...but if you are planning a deal and it leaks, you have to make an announcement and not delay. 

If it is just 'press speculation' then you have to decide what you do - and often if there is a leak, the plan is abandoned. 

But Ryanair has just set a whole new precedent: nobody appears to have had a clue what was going on in this instance, but they might want to do it in future....

Here's a free word of advice to businesses: before issuing regulatory announcements on media coverage, it might be best to take soundings from both your broker and a lawyer on the wording.


Categories: Media, Governance, Regulation