* Profit warnings, policy u-turn spark questions aboutmanagement
* Shareholders complain, but don't see alternative toO'Leary
* Management reshuffle planned as likely successor retires
* Stellar record keeps O'Leary in favour
By Conor Humphries and Sinead Cruise
DUBLIN/LONDON, Nov 5 (Reuters) - When one Ryanair shareholder made a stinging attack on Chief Executive MichaelO'Leary at the airline's annual meeting for scaring offcustomers with his "bullying" and "macho" style, there was onething he didn't mention.
That O'Leary's leaving was one of his biggest fears.
As Ryanair scrambles to reinvent itself and woo customersfrom higher-cost rivals to fill hundreds of new planes, thereare growing concerns about the cost of what O'Leary recentlydescribed as his "personal character deformities".
But with his heir apparent about to leave - and as a seriesof profit warnings eat away at O'Leary's air of invincibility -a bigger worry is that Europe's largest airline has left itselfover-dependent on a single personality.
"On the main issues he has been hugely successful ... butthere is some really bad stuff," said Alan Marlborough, aprivate shareholder with a sizeable portion of his savings inRyanair, a month after his AGM outburst. "Is the companyover-dependent on him? I think it is."
Asked, however, if O'Leary's departure was one of thebiggest concerns for Ryanair, he told Reuters: "I totallyagree."
O'Leary, an outspoken and hard-charging 52-year-old who usedto run newsagent shops, has been in charge of Ryanair since 1994and is described by executives who have worked with him as aworkaholic with a forensic knowledge of every aspect of thecompany.
A near-religious devotion to cost-cutting has allowed him to transform a small loss-making regional airline into thebiggest carrier by passenger numbers in Europe, and in turntransform the industry. But now budget airlines' customer careis under scrutiny, particularly at Ryanair.
Critics say O'Leary's brusque personality andexpletive-filled rants have helped to alienate swathes ofpotential customers, while his domination of decision-making hasmeant a number of strategic mistakes.
The stress of no-frills flying and rigid enforcement offines for baggage size has left some passengers sobbing at theairport gate, and the Irish firm was voted the worst of the 100biggest brands serving the British market by readers of consumermagazine Which?
Other shareholders chimed in at the AGM with anecdotes aboutfamily members refusing to fly Ryanair and verbal attacks theyhad suffered at dinner parties. O'Leary nodded sheepishly as hefaced up to the concerns about the "abrupt" culture.
COMMITTEE OF ONE
"It's a committee of one in most instances," said one ofRyanair's 10 largest shareholders, who blames O'Leary for costlydecisions like "screwing up" fuel hedging in 2009 and a"disastrous" push into in-flight entertainment.
But the shareholder, who requested anonymity, is resigned totaking the bad with the good and cannot see many worthyalternative leaders to take the place of the man who hasoverseen a tenfold rise in the share price in 15 years.
"Replacing O'Leary is like replacing Alex Ferguson," hesaid, a comparison with the manager of Manchester United soccerteam, who retired this year after nearly 27 trophy-filled years."It will be extremely tough for anyone to replicate what he hasachieved."
O'Leary has said repeatedly he would leave when Ryanair endsits fast growth stage and enters comfortable middle age, but hesaid in an interview last week that would not be soon, with thedeliveries of 175 new planes starting next year.
The replacement of retiring deputy chief executive MichaelCawley with two senior executives in March will give signs ofO'Leary's thinking on strategy and succession.
Shareholders trust that with most of O'Leary's wealth -around 275 million euros - tied up in Ryanair shares, there willbe no shocks.
And some believe his cost-cutting dogma has been embedded sodeeply in the company's DNA that when he does leave, thecompany's core strength will remain undiminished.
"His personality isn't why the business does so well. Itdoes so well because everything is about low cost," said DonalO'Neill, an analyst with Goodbody Stockbrokers in Dublin.
PROFIT WARNINGS
The latest questions about O'Leary's management have beenraised after the company announced a series of major policyreversals weeks after their first profit warning in a decade - atacit admission for many that O'Leary had taken cost-cutting andharsh penalties for passengers too far.
This has allowed rivals like easyJet and Aer Lingus to build their sales pitches on being lessuncomfortable than Ryanair, though O'Leary says this has notforced the airline to engage in a price war, blaming a generalweakness across Europe instead.
O'Leary has impressed airline industry analysts by the scaleof the U-turn, cutting baggage and boarding card fees andintroducing assigned seating on all planes - copying easyJet andtearing up some of the basic tenets of his low-costbible.
But he has shown no sign of changing the brash style thatmany travellers cite as a reason for not flying with Ryanair; hesaid in an interview with Reuters that he had no intention ofoverhauling the company's core culture.
When he made his debut on Twitter to demonstrate a newopenness in an airline that long took complaints only by post,he donned an Irish leprechaun costume to post messages, some ofthem crude, jokingly threatening to break a customer's ankle ifshe didn't fly again soon with Ryanair. The airline's planes, hesaid, were powered by his "bulls**t".
"The approach for the last 25 years has been, 'We hatecustomers, but you shouldn't care because we have the cheapestticket'," said an executive who has known O'Leary for years andwho declined to be named.
"I would deeply question whether under Michael's leadershipthey have the ability to transform into that more soft, cuddlyairline."
Other strategies that have annoyed some shareholders includeRyanair's dogged pursuit of a takeover of Aer Lingus, which hasled O'Leary to bring lawsuits against British and EU regulatorsand induced a slowness to return a cash pile to shareholders.
"Constantly fighting the EU does not help Ryanair executeits strategy," said one of Ryanair's 40 largest investors, whorequested anonymity.
"(But) we differentiate between operational excellence andthe strategy. O'Leary still has a great team around him."
easyJet (EZJ)