Michael O'Leary

by Alan Ruddock

  In the face of trade union condemnation and Hanlon’s accusations, O’Leary took his battle to the people with a television advertisement that called for public support. In the advertisement O’Leary spoke about increasing competition at Dublin airport, and then gave out the telephone number of the taoiseach’s office so that viewers could call and demand action. State-owned RTE refused to air the advertisement, arguing that it contravened the broadcasting code. TV3, a new independent station, broadcast the advertisement in early July, but was then advised to pull it by the Broadcasting Commission of Ireland.

  Cork airport, too, was becoming a battleground between Ryan-air and Aer Rianta. Once again charges, competence and efficiency were at the heart of O’Leary’s complaints – with his objective, as always, to reduce his own costs. Aer Rianta had proposed a €140 million overhaul for the airport, a figure that prompted howls of outrage from Ryanair.

  Fitzsimmons was quick to raise his chief executive’s concerns in the letters page of the Irish Times.‘The latest madcap scheme to squander money is plainly insane,’ he wrote.

  The planned extension to Cork Airport, which currently has passenger traffic of 1.9 million a year, will allow growth to a new capacity of 3 million passengers a year at a proposed cost to the taxpayer of €140 million. To put this ludicrous plan in perspective, Ryanair began flying to Frankfurt Hahn airport in 1998, taking that airport’s traffic from zero then to 2.5 million passengers this year. Fraport, one of the largest airport operators in Europe, only yesterday opened a new terminal extension to its Frankfurt Hahn airport, increasing its capacity to four million passengers a year, at a cost of €11 million. Yet Aer Rianta is proposing to spend twelve times as much, for one million fewer passengers.

  John O’Connor, director of Cork airport, replied with his own letter to the newspaper.

  Perhaps Mr Fitzsimmons is unaware that the development plans for Cork Airport were formulated in consultation with airlines and their representatives and that their combined views significantly influenced the ultimate plan. We had proposed a less ambitious expansion at Cork but the airline users vehemently objected and demanded a new building rather than the planned extension to the existing building.

  O’Connor went on to detail where the €140 million would be spent at Cork – €70 million on the new terminal and €70 million on a road network and car parks – and listed the various facilities which would be built at Cork which were superior to those constructed at Hahn. He also included a jibe certain to provoke O’Leary. ‘At a time when it has emerged that Ryanair is paying substantially more for Buzz than it disclosed two months ago, the airline continues to play fast and loose with statistics to suit its own political purposes.’

  O’Leary’s concerns had been dismissed, and the airport’s expansion plans would continue, though the cost would rise to more than €170 million. It was an extraordinary sum for a small airport to spend, particularly since the proposed increase in passenger numbers was so small, but Aer Rianta was not in the habit of building cheaply. O’Leary believed that the airlines would be stuck with the costs because Cork would be forced to raise landing charges to cover its debts, and he knew what Ryanair’s response would be: if prices rose, services would be cut.

  O’Leary’s spats with Aer Lingus and Aer Rianta delivered plenty of publicity but few policy breakthroughs. Yet change, however incremental, was on the way. On 10 July Brennan formally announced that Aer Rianta would be broken up into three separate airport companies – one each for Dublin, Shannon and Cork.

  Noel Hanlon, Aer Rianta’s chairman, had made his feelings on a potential break-up clear in an interview with the Sunday Tribune on 22 June. ‘Shannon will not survive,’ he said. ‘Cork is also facing a difficult situation in the short term, because it needs investment, but long term it should be self-sufficient.’ O’Leary, however, was pleased. ‘The break-up of the Aer Rianta monopoly and competing terminals at Dublin will allow Ryanair to introduce over twenty new low-fare routes to Europe,’ Fitzsimmons wrote in a letter to the Irish Times.‘We will deliver up to five million new visitors for Ireland, and this will in time create over 5,000 newjobs in Irish tourism.’

  His optimism was premature. While the end of the airport monopoly was now government policy, it would take months to effect the change. Under the new arrangements the three airports would remain under state ownership, but they would be free to compete with each other for new routes and free to set their own charges. Brennan also had to grapple with the borrowings attached to Shannon and Cork airports. He could not encumber new companies with massive debts but nor could he saddle Dublin with a disproportionate share of the liabilities. Critically, too, the changes did not guarantee the Holy Grail of a new terminal in Dublin independent of the new Dublin Airport Authority. That remained embroiled in politics and no closer to resolution. All the break-up guaranteed was that there would be competition between the airports – competition that would give O’Leary the opportunity to play one off against the other, but not the seismic shift in Irish airport policy he felt he needed to take Ryanair’s operations to another level.

  While O’Leary fought his political battles in Ireland and expanded swiftly across Europe, he was also preparing for the first legal fight that seriously threatened to stall his progress. By the summer of 2003 the case filed against Ryanair by the Air France subsidiary Brit Air, charging that the marketing support offered to it by Strasbourg airport constituted illegal state aid, was ready for court.

  Ryanair protested its innocence. The deal was a simple volume proposition, the company said. Ryanair carried 20,000 passengers a month compared to Brit Air’s 2,000, so they received the marketing subsidies their efforts deserved. However, in mid-June the verdict was returned: the court ruled that the deal had indeed involved illegal subsidies.

  Ryanair and Strasbourg immediately began to prepare their legal replies, with O’Leary also embarking on a two-pronged public relations offensive, appealing to French politicians and asking the French public to protest at this attack on their right to low fares.

  When the appeal came to court in Nancy in late September, Ryanair opted for a typical way of garnering public support. ‘We offered free flights to anyone who turned up to support us on the appeal,’ recalls Paul Fitzsimmons. ‘We were mobbed. There must have been 3,000 people waiting there. We got out of the car and they were all cheering and clapping. We were handing out all these vouchers and they were [chanting], “Justice, this is for the people.” It was hilarious. You couldn’t but hear it in the court.’

  Ryanair had used the tactic successfully in Germany in previous legal spats with Lufthansa, but Strasbourg airport Director Alain Rusell felt it wouldn’t do the airline any favours in France. ‘It went down very badly with the French administration,’ he says. ‘We advised them that they shouldn’t do things like that. But sometimes he [O’Leary] is impossible to control.’ The publicity surrounding the case and O’Leary’s tactics ensured that it would be watched closely, but would count for nothing when the verdict was delivered. The appeals court found against Ryanair and Strasbourg.

  Before the case Ryanair had made it clear that it would no longer fly to Strasbourg if the case was lost, a position which the airport understood.

  We had signed an agreement and the terms of that agreement included sharing marketing costs. If the tribunal forbade us from doing that it is normal that we would face the consequences. We tried to come up with a different contract, but it would have risked another appeal. We have kept good relations with the airline, we have always had good relations with them. And if tomorrow we could find a way that would let us get them back here, we’d do it.

  With Strasbourg off its route map, Ryanair had to find another airport to fill its shoes. The solution was just across the border in Germany, where Baden Baden airport was ready and waiting. Brit Air would still face the heat of Ryanair’s competition, Ryanair would still have its route, and the only losers would be Strasbourg.

  21.
Poor Little Rich Boy

  The journey from O’Leary’s home in Mullingar to Ryanair’s starkly functional offices at Dublin airport is less than sixty miles, but unless he left home at the crack of dawn and his office in the late evening, it could take more than two hours, such was the weight of the rush-hour traffic. It was frustrating wasting time sitting in traffic in his chauffeur-driven Mercedes, but O’Leary was reluctant to take the flashy option of acquiring a helicopter. And then he had a moment of inspiration. ‘I was sitting there in traffic one day. [The government] had deregulated the taxis and I saw that taxis could use the bus lane. There’s a bus lane and it would save me half an hour coming into the office in the morning. And I’m thinking, Why don’t I?’

  So O’Leary paid €6,000 for his taxi licence and stuck a taxi plate on the back of his Mercedes when it was licensed by Westmeath County Council on 18 February 2003. For two weeks no one noticed, but then, on 2 March, the Sunday Business Post broke the story. ‘Ryanair boss, millionaire Michael O’Leary, has found a cunning way to elude Dublin’s notorious traffic jams without resorting to a plane,’ the paper said. ‘The intrepid airline boss has just bought a €6,000 taxi plate for his 02 black Mercedes to fly him through the capital’s snarl-ups – a bargain price for high-net-worth business people who make their fortune on the principle that time is money.’ The article went on to report, accurately, that the taxi had been registered to a company called Tillingdale, which was owned by O’Leary.

  O’Leary did not anticipate the media storm that would follow. Although a self-professed prostitute for publicity, he had seen his acquisition of a taxi plate as a logical move for a time-starved businessman, not a national and then international story. Once again he could not have bought a fraction of the publicity that followed, though this time he had stumbled into the spotlight rather than leapt under it. Taxi drivers and their unions professed outrage and politicians climbed onto the bandwagon, happy to take swipes at O’Leary once they thought the public was on their side.

  ‘Someone like O’Leary coming up and passing by cars stuck in traffic jams is a disgrace,’ said John Usher of the Irish Taxi Drivers’ Federation. ‘Not only is it offensive to people in the business, it is also offensive to every motorist on the roads. It is equal to giving the two fingers to everyone else,’ he said. Vinnie Kearns, of the National Taxi Drivers’ Union, shared his sentiments. ‘It is a shocking abuse of the taxi licence. It will only defeat the whole purpose of the bus lanes and makes a complete mockery of the rules of the road. It is a kick in the teeth for taxi drivers out there trying to earn a crust.’

  Opposition politicians attacked O’Leary and eventually the minister for transport was drawn into the frenzy. Seamus Brennan asked his officials to establish the exact position in law of ‘the issuing of taxi licences to business concerns or individuals for their own private use and not for the provision of a service for the benefit of the general public’.

  The criticism washed off O’Leary. ‘It’s a black taxi,’ he told a radio phone-in show.

  It’s registered in Mullingar. I have a driver who drives it for me and if they want to amend the regulations which say I’m allowed to pick up people in Dublin, I’ll be happy to do it, and I’ll do it a lot cheaper. At a time when there is about to be a war in Iraq and there is a crisis in the health service, Michael O’Leary’s taxi is capable of exciting everybody. I have a taxi because it’s a good investment. I own the car. I own the plate and I operate a taxi as do about 12,000 other people in Ireland. As far as I understand it, people are upset because my taxi uses a bus lane on the way to Dublin airport. But if I rent a taxi in Mullingar he can drive a taxi up the bus lane to Dublin airport and there is no problem. The problem appears to be that it’s all right if I rent a taxi, but if I own a taxi there’s a problem.

  Three years later O’Leary still travels to work in his taxi and claims that anyone who books a trip in advance can travel with him. The criticism of his brainwave however still rankles. ‘Everybody expects you to be all humble and ashamed. Bollocks. I bought the plate, it operates perfectly legally. It picks me up, it drops me off.’ To many observers it was just another little stroke that showed that O’Leary was always a step ahead of the pack, always looking for ways to get a better deal. And the global coverage – the story was carried in newspapers across Europe and as far afield as Delhi and Melbourne – was a bonus. The taxi controversy was not planned, but it fitted his agenda: acres of newspaper coverage and prime-time television, all promoting the Ryanair brand.

  As the taxi controversy waned, O’Leary was invited by the Irish Dáil’s Transport Committee, drawn from politicians on both sides of the house, to discuss aviation policy. It was an opportunity for O’Leary to engage with policymakers on their home ground, rather than just attack them in speeches and press releases. The committee existed to explore policy options and make recommendations to government. Its invitation to O’Leary was a recognition that Ireland’s aviation policy was no longer an issue that could be subcontracted to Aer Lingus. Ryanair’s growth had given it equal status on routes out of Ireland, while its relationship with Ireland’s airports had been the dominant factor behind the eventual reform of their management structure. O’Leary decided that education would be the order of the day.

  ‘Probably the best way to deal with this is to give a brief presentation on Ryanair, partly because the extent of the ignorance of what Ryanair does here is breathtaking,’ O’Leary began.

  Ryanair is Europe’s number one low-fares airline. We are number one on almost every front. We are by far and away the longest established. The airline started in 1985 as a loss-making high-fares airline and it was turned around starting in 1990 as a low-fares airline. It is number one for traffic and this year we will carry 24 million passengers. That is six times the total population of this country and is four times the total number of passengers carried by Aer Lingus.

  Statistics, though, were never enough for O’Leary. Within minutes he had received a warning from the committee because he chose to describe Mary O’Rourke, the former transport minister, as ‘particularly incompetent’. O’Leary apologized briefly, and continued with his passionate promotion of Ryanair, prompting Fianna Fail’s Peter Power to say, ‘I think we should charge an advertising rate.’

  His presentation over, the politicians probed for weaknesses. Róisín Shorthall, transport spokeswoman for the Labour Party, wanted to know about Ryanair’s refund policy. O’Leary explained that Ryanair kept all of the money paid by customers, including airport charges, when a trip was cancelled. Power took exception to this, saying he did not see how Ryanair could keep money supposed to be destined for airport authorities or insurance authorities. ‘There is a misunderstanding here,’ O’Leary said. ‘We do not take money – passengers give it to us voluntarily. This could not be any clearer.’

  Soon the subject turned to Aer Rianta, which was in line for its break-up. ‘Aer Rianta. Is it possible for the company to be run better?’ asked O’Leary sarcastically. ‘Where do I start? Let me give an example. Aer Rianta is the Iraq of Irish tourism. It is an inefficient dictatorship.’

  His audience was not amused. ‘We have never tolerated such remarks from anyone who has made a presentation to the committee,’ complained Noel O’Flynn, a government TD. ‘Perhaps you would remind Mr O’Leary that he should conduct himself in a proper manner in the Houses of the Oireachtas.’

  O’Leary’s language soon caused further offence when he suggested that ‘if the government wants to develop its spatial strategy [a plan to spread development around Ireland, away from Dublin], it should fly the buggers straight to Shannon’.

  ‘Mr O’Leary’s language is unparliamentary,’ the committee chairman said.

  ‘Sorry, what did I say?’ O’Leary replied, appearing genuinely puzzled.

  ‘You used the word “buggers”,’ came the reply.

  ‘That is a term of endearment in Mullingar,’ O’Leary responded.

  The following
day it was O’Leary’s use of the word ‘bugger’ which attracted most coverage, followed by his confident assertion that Ryanair would be the world’s largest airline by 2005. The Irish Independent ran a satirical piece headlined ‘Poor little rich Mick with no friends’. The article began:

  Pity poor rich boy Michael O’Leary – he has everything money can buy but no friends. At times, the chief executive of Ryanair sounded like the kid with all the new toys but nobody to play with…He sat before the transport committee yesterday like a bold lad at a boarding school carpeted by the prefects for trousering the takings of the tuck shop. But as the class show-off, Mick O’Leary was determined to put on a performance and he didn’t disappoint his inquisitors…

  For O’Leary it was a minor victory. He had had an opportunity to place on public record Ryanair’s success, even if his language and demeanour caused more discussion than the fact that Ireland had produced Europe’s most successful airline. The next day, however, his taxi returned to the headlines, and this time O’Leary had to choose contrition over aggression when it was revealed that he had been caught speeding. His driver was ill, so O’Leary had taken the wheel himself. When he appeared in court, the judge heard that O’Leary had overtaken fifteen cars on a blind bend, prompting two witnesses to call the police on the emergency 999 number.

  Convicted and fined, O’Leary managed to keep his driving licence because he had been ‘courteous’ to Gardai. Uncharacteristically subdued at the outcome, O’Leary steered clear of his normal self-promotion. ‘I’m very sorry,’ he said. ‘I feel the court was very fair, the judge was very fair, the guards were very fair and the two people who gave evidence were very fair.’