by Alan Ruddock
O’Leary disagreed. He announced that he would bring five new routes to the airport in a move that would create 150 jobs – but only on condition the government supported his plan for a second, independent, terminal for Dublin airport. ‘The Shannon proposal was O’Leary’s idea,’ Tim Jeans says. ‘Shannon was on its knees, and we thought we could use it for leverage. Dublin was the big prize. If we could transform Dublin into a long-term low-cost base, no stone would be left unturned.’
It was a smart piece of opportunism. O’Leary was confident that Shannon could sustain new routes – lying on Ireland’s western coast, the airport is well located for tourist traffic heading north towards Galway or south to Kerry – and he knew that without new route development, Shannon’s future was in serious peril.
The Irish government faced a stark choice. On one side they had TDs and businesses from the west of Ireland lobbying for the salvation of their airport; on the other they had Aer Rianta and SIPTU, who were both determined to resist Ryanair’s vision for Dublin, no matter the cost. O’Leary further stirred the waters by claiming that Mary O’Rourke, the minister for transport, had invited him to make proposals that could help Shannon. ‘She came to us last May and asked us to come up with a plan in Shannon,’ he said. ‘Shannon will always be politically sensitive until someone goes in and puts some traffic in there. We can do that.’
But O’Rourke baulked at the price that O’Leary wanted to extract. ‘I think it is awful that Mr O’Leary is asking for a slice of Dublin airport as part of the deal,’ she said. ‘It would seem that he doesn’t want to come back to Shannon, and he seems determined on the coupling of the Dublin and Shannon proposals.’
In the event, O’Leary held back on developing routes from Shannon and the government ignored the mounting pressure to develop new facilities at Dublin.
O’Leary’s style in his dealings with the state was very unIrish: instead of lobbying ministers politely he chose to ridicule and harangue them, appealing instead to the ordinary voters and travellers, to whom he promised lower fares if inefficient state monopolies could be broken down.
‘What mystifies me in Ireland is we have this complacency,’ O’Leary said in an RTE radio interview in 1998. ‘Why doesn’t somebody call our bluff? If they think we are not serious about [building a terminal at Dublin airport] why don’t they say, “Ryan-air, off you go, build your terminal, spend your twelve million.”?’
His question went unanswered but it touched on one of the central criticisms of O’Leary’s attitude to Dublin airport: was he serious or was he just making mischief?
At the end of October O’Leary was given a chance to make his case for the second terminal in a more conventional arena when he was invited to appear before the Dáil committee which dealt with transport affairs to outline his plans. He broke with his normal check shirt and jeans and donned a suit and tie for the occasion. While O’Leary was keen to discuss Terminal Ryanair, the members of the committee were more interested in hearing about Ryanair’s tumultuous relationship with the British advertising watchdog, the ASA.
Emmett Stagg, a Labour party TD, was particularly concerned that Ryanair had been censured by the ASA thirteen times. Shane Ross, an independent senator who doubled as a business journalist, said the company’s relationship with the Irish ASA was equally ‘deplorable‘, resulting in six complaints, three of which were upheld. This, according to Ross, meant that half of the company’s ads were ‘misleading, untrue, dishonest and unacceptable to an independent body‘, casting a considerable shadow over O’Leary’s credibility.
‘What you say is very impressive,’ Ross said, ‘but can I believe a word you are saying when an impartial body says you are lying?’
Ross and Stagg set the tone for a hostile grilling, but O’Leary refused to be drawn into apologies. Talking about one case, where an error by an employee in an advertisement had resulted in a GB£18,000 ASA fine for Ryanair, O’Leary left the committee in little doubt as to where his priorities lay. ‘All advertising is now being vetted by three different people in the company, not only because we do not want to mislead consumers but because we do not want to waste £18,000.’
Two weeks later Aer Rianta had the chance to make its own presentation to the committee on Ryanair’s terminal proposal. Noel Hanlon, its chairman, did not hide his contempt for O’Leary’s plans: Ryanair was telling ‘blatant lies‘, he told the committee, and the airline wished to design a ‘cowshed’ and not an airport terminal.
O’Leary was incensed and responded with a terse letter to the committee on 22 November threatening legal action if an apology from Hanlon was not forthcoming. ‘Failing this, Ryanair will have no alternative but to initiate legal proceedings against Aer Rianta for libel so that we may have this untrue accusation laid to rest and Ryanair’s good name and reputation restored.’
Once again, what had begun as a matter of vital importance for Ireland’s infrastructure and the future of its tourism industry had become a personality clash between Hanlon and O’Leary. ‘There was a lot of personal antipathy between O’Leary and Hanlon,’ recalls Tim Jeans. ‘It probably was a big obstruction to the whole process.’
Instead of following through on his threat to launch a libel action, O’Leary moved his battle to the not unfamiliar territory of newspaper advertisements.
The Bank of Ireland branch at Dublin airport had been robbed in late October, with armed raiders making off with up to £250,000. Another airline CEO might have felt some sympathy for the bank’s workers, but O’Leary saw the robbery as yet another PR opportunity. ‘It’s not just the Bank of Ireland which gets robbed at Dublin airport,’ his new advertisement proclaimed. The Irish Advertising Standards Authority denounced the ad as a breach of its code of practice.
The government was due to give its initial verdict on the proposed second terminal project by the end of the month, but instead of a decision it kicked for touch. O’Leary had been confident of a swift decision. ‘I think the chances [of a second terminal] are very strong,’ he had told RTE’s Moneymakers programme in September. ‘It is going to be politically very difficult for the Irish government to tell the people, “No, you must continue to pay three hundred, four hundred, five hundred pounds to fly direct to Germany, France and Italy, when Ryanair can do it for £19 out of Stansted.” And it is going to be very difficult for the government to turn down 500 new jobs.’
He was wrong. For the next six years the government would do nothing. Congestion at Dublin airport would intensify and its development as a low-cost base would stall. O’Leary, finally recognizing the inevitability of delay after the government had failed to make a decision by the end of the year, opted for irony, liberally laced with doom. ‘We’re quite happy to wait it out for a year, two years or three years, if that’s what it takes. Airfares will rise, traffic will decline, we’ll cut back flights and tourism will start to surfer. Then Aer Rianta and the minister will ask Ryanair to come back into Ireland. And we’ll consider it.’
Stansted had become the base of Ryanair’s European expansion and the airline had five planes based there. But despite this Aer Lingus had stubbornly maintained its Dublin–Stansted service, which it had reintroduced in 1992 after Ryanair’s exclusive access deal had run its course, and it had stubbornly refused to be forced off the route. In November, that stubbornness was finally replaced with pragmatism when the flag carrier announced it would be dropping its Stansted service in favour of increased services to Gatwick from January 2000. O’Leary was quick to fill the gap by promising to add four new Ryanair flights a day between Dublin and Stansted from January, bringing their daily total to sixteen. He also pounced on the opportunity to take some PR shots against his ailing rival. Aer Lingus’s talk of‘a customer-driven plan with a clear business focus’ was ‘Japanese for high fares’, O’Leary said.
In November Ryanair reported a 17 per cent rise in pre-tax profits for the first half of the financial year, to £42.9 million. The airline was in the midst of its aggr
essive European expansion, had just launched its latest Scandinavian service, to Aarhus in central Denmark, and by the end of 1999 O’Leary told journalists that Ryanair was in talks with twenty European airports with a view to flying into ten of them in 2000.
Financially, Aer Lingus was also being outperformed by Ryanair. In April Aer Lingus had released full year results which showed a pre-tax profit of £52.4 million, up 14 per cent. But the airline’s chief executive, Garry Cullen, warned that margins, at 6 per cent, were too low. To solve the problem of low margins, Cullen wanted a review of pay scales, a proposal which put him on a collision course with trade union SIPTU, which represented most of the airline’s workers.
Cullen also had to contend with mounting speculation that the airline was to be sold by the Irish government, with sources saying in December that Aer Lingus would be floated on the stock market the following year. The airline had managed to claw its way back from bankruptcy thanks to a large injection of state aid, but a flotation would strip away its safety net and leave the airline, and its unionized workforce, at the mercy of the market. The day of reckoning appeared close, but the unions would fight the sell-off, and they could count on formidable political allies.
Shouting and screaming at state monopolies and poking fun at cabinet ministers might have won O’Leary some popularity, but his hostility to all-comers was more problematic when it was directed at customers. In October Ryanair had incurred the censure of Ireland’s Daily Mirror when the airline refused to refund the ticket of a young boy who missed his flight because he was too ill to travel.
‘FAMILY’S FURY AS AIRLINE TELLS ASTHMA ATTACK BOY, 7: SORRY, YOUR FLIGHT’S GONE, YOU’LL HAVE TO BUY ANOTHER TICKET; FATHER BRANDS RYANAIR “HEARTLESS”’, the headline raged, in bold capital letters. The piece detailed the story of ‘little Liam Nolan’, who had travelled to Ireland for a family wedding. The day before he was due to return to the UK he had an asthma attack and doctors declared him unfit to travel. Ryanair chose to follow its no refunds policy to the letter, refusing to allow the Nolan family to change their tickets and outraging Liam’s parents. ‘I just can’t believe Ryanair can do this,’ his father Joseph told the Mirror. ‘I am absolutely furious with the way we have been treated. I’m never going to fly with them again because of this.’
The airline was unmoved by the family’s plight. ‘We have different types of tickets,’ a Ryanair spokeswoman said. ‘I presume the family bought the non-flexible ones, which means they are valid only for that flight…there is nothing we can do about it. The family could have opted for travel insurance which Ryanair offer their passengers. We recommend it because you don’t know what can happen.’
A public row was thus turned into a sales exercise but Ryanair was unrepentant. To those outside the company, it seemed heartless, but for O’Leary there was method. Publicity, he still believed, was good, and he needed to reinforce the message that low fares meant that the passenger got what he or she paid for. The public needed to be educated, and if Ryanair had played for a simple PR victory by giving the family a free flight, hundreds more would have sought similar concessions. O’Leary wanted his airline to have an uncompromising reputation: cheap but no concessions. ‘What part,’ he would say, ‘of “No refunds” do you not understand?’
In mid-December Ryanair attracted more public anger by announcing the halting of services to Knock airport in the west of Ireland. The surprise announcement came on 14 December and was prompted by Knock’s decision to follow Kerry airport’s initiative and levy a £6 passenger charge from mid-January. Local politicians condemned Ryanair’s decision as ‘disastrous for the west’ and as the save Knock airport campaign gathered pace, Ryanair performed a swift U-turn, changing its stance within days. ‘Ryanair has, this evening, announced that there will be no suspension of its twice-daily service from Knock to London, Stansted,’ a company statement said. ‘Passengers will continue, therefore, to enjoy Ryanair’s low access fares to and from the West of Ireland, without interruption.’
The airline also softened its position on the levy. ‘Ryanair continues to believe that the proposed passenger levy at Knock is fundamentally wrong. If Knock airport received the same parity of treatment in terms of regional support from the Government as airports like Sligo, Galway and Kerry, it would not have a shortfall and then would not have to introduce this unjust levy on passengers.’
It was a stunning reversal of policy, and in a very short space of time. Was O’Leary mellowing? Had he been swayed by public opinion? Hardly. The change of heart was not prompted by an attack of conscience about the potential devastation of County Mayo’s economy. In fact, O’Leary had miscalculated: he thought that if he pulled out Knock would be forced to come to him, cap in hand, begging for a return of the service. O’Leary could then screw an even better deal from the airport and consign the levy to history. It would be, he reckoned, a salutary lesson to any other airport, anywhere in Europe, that tried to take on Ryanair.
Competition, though, was beginning to bite and O’Leary quickly recalculated. ‘If you pull out you want to make sure that nobody else replaces you,’ says Jeans.
And we thought wrongly that if we pulled out of Knock the airport would probably shut. But at the time quite a number of people were leaving Ryanair for Virgin Express and Virgin Express was in expansion mode, and they were going to open up in Shannon. It became abundantly obvious that far from Knock suffering, what would happen would be that Virgin Express would come in. So rather than let Virgin Express in, Michael changed his mind and stayed. It was a total U-turn but it was a pragmatic U-turn.
16. Vulgar Abuse
There is more to Michael O’Leary than the art of making money. There had been rumours of romance and of an impending engagement towards the end of 1999, but confirmation that O’Leary planned to marry Denise Dowling, his girlfriend for more than two years, still came as a shock to his colleagues in Ryanair. They had been aware of Denise Dowling’s presence – she had helped O’Leary host his annual party in Gigginstown the previous summer – but none was close enough to the chief executive to know his private thoughts.
Despite, or rather because of, the intensity of his working week, O’Leary still maintained as rigid a divide as he could between his professional existence as Michael O’Leary, chief executive of Europe’s fastest-growing and most mischievous low-cost airline, and Michael O’Leary, ordinary bloke, who lived in Mullingar and happened to work at something in Dublin during the week.
His colleagues, in any case, were pleased. ‘We were all thrilled for him,’ says Ethel Power. ‘We teased him about having to do a pre-marriage course and several funny notices went up on the internal Ryanair TV slagging him.’ Romance, however, was only a private distraction. There was to be no reduction in the hours he worked, no easing of the obsession that drove the airline and no softening of O’Leary’s approach to business. ‘I certainly didn’t notice any change in him,’ says Tim Jeans. ‘It was just another thing that he added to the portfolio of things that were going on in his life.’
That portfolio now included nesting as a priority; if O’Leary was to be married then Gigginstown had to be transformed from a bachelor pad into a marital home fit for a wife and perhaps a family. Redevelopment had been on his mind for a few years. Funding the work was not an issue; in June he had sold shares which had grossed him £16.6 million, and in September he had received a 25 per cent pay rise for 1999 which gave him a salary of £314,000 and £136,000 in bonuses.
Love, though, was to prove a more complicated affair than business. In January while preparing to tell the world of his engagement O’Leary had joked in an interview with the Guardian that he was ‘depressingly single and living in hope that a woman will find me sufficiently attractive to settle down’. He might have been trying to deflect attention from the imminent change in his private life, but in fact he would have cause to recycle the quote many times over the next few years. For the moment, though, plans were moving apace for a summer weddin
g. That same month O’Leary contacted Pat and Marie Cooney, well known Mullingar hoteliers and caterers, to ask them to prepare for his wedding. O’Leary knew he could depend on the Cooneys for discretion – they had worked for him before, catering his midsummer garden parties – and the couple already knew Dowling. ‘He was seen around a lot with Denise,’ Pat Cooney says. ‘They used to come in to us a lot.’
The Cooneys started to plan a menu for the big day. Dowling was ‘very precise’, they recall, while O’Leary had ‘simpler tastes’. ‘It was to be a buffet, like the garden parties,’ says Pat Cooney. ‘They wanted Aberdeen Angus and exotic fish. Michael is big into the fish. There was lobster, prawns, caviar – his father and mother love fish too. Denise likes chicken and they were having a chicken dish, but he hates chicken because he had it in boarding school, so they [compromised and] decided on a chicken salad to start.’
By early spring, with the engagement public knowledge, Ireland’s tabloid press started to probe for details of the wedding plans. The ceremony, the Sunday Mirror announced in March, would take place in a church in Mullingar and would be followed by a lavish reception at Gigginstown. The paper also interviewed an unnamed ‘friend of the couple’ who revealed that O’Leary and Dowling ‘have been an item since last summer’. They had, in fact, been involved for several years. The same friend went on to inform the Sunday Mirror’s readers, ‘They have never been photographed together. Denise isn’t the publicity-seeking kind…She’s blonde and very attractive, more in a girl-next-door way than a glamorous model.’
It was tame stuff, an early build-up to what would have been the wedding of the year for an Irish media desperate to foster a celebrity culture in a country still coming to grips with its newfound wealth. Newspapers wanted superstars, and O’Leary was an obvious target. Young, dynamic, successful and already rich by Irish standards, he could have been the perfect playboy. Instead, he was resolutely private, steered clear of establishment events and charity balls, dressed down and talked of nothing but his company and occasionally his cattle.