Michael O'Leary - Opinionated, Irreverent, Bad Boy
I've used Ryanair a lot over the years and I've always had a soft spot for its irreverent, opinionated, bad boy boss Michael O'Leary who doesn't suffer fools gladly.
I also agree with him that there's a terrible snobbishness about Ryanair even though the airline has revolutionised air travel in Europe.
“There is a snobbism about Ryanair. Which? magazine has rated us the worst airline on the planet for seven years in a row, and in that period we have grown from carrying 10 million passengers to 150 million. We get one star for seat comfort; Easyjet gets three for the same seat. We get no stars for in-flight food, but we have Lavazza coffee and paninis. We do charge, but others have followed us because it makes sense. There is less waste.”
Read the full interview in the link below to The Times.
https://www.thetimes.co.uk/past-six-days/2020-02-22/magazine/ryanairs-michael-oleary-lets-fly-on-flybe-branson-brexit-and-airport-security-j3kxklr6p
Ryanair’s Michael O’Leary lets fly: on Flybe, Branson, Brexit and airport security
The Ryanair boss is back in the news, attacking the government’s proposal to bail out Flybe. But then he’s never been one to hold back. Alice Thomson checks in to hear his views on everything from passenger profiling to flirting at work
Michael O’Leary, 58, photographed at his office in Dublin - JOHNNY SAVAGE
By Alice Thomson - The Times
Ryanair is not everyone’s favourite airline. Its Irish boss, Michael O’Leary, is known for considering a “pay-per-pee” plan for passengers and suggesting they stand. The chief executive of Europe’s largest airline, carrying 154 million “guests” a year, has called regulators “rapists”, rivals “arseholes”, advised customers wanting a refund to “f*** off … We don’t want to hear your sob stories,” and wanted to charge them when they forgot to print their boarding passes. His own staff were once banned from charging their phones at work.
So I fly to Dublin on rival Aer Lingus and assume the Ryanair headquarters will be cramped, the staff cowering and the man himself won’t offer me a coffee unless I cough up. I know I won’t like him.
But the offices are new, the Spanish PR obviously adores her boss, and O’Leary, arriving early wearing jeans and a sweater, not only worries I haven’t had any breakfast and offers to source eggs and bacon, but sends a polite thank-you letter afterwards.
A few years ago, Ryanair, created in 1984, finally started its new customer-friendly overhaul. Since then, O’Leary has stopped giving interviews, dressing up as the Pope or Batman’s sidekick, Robin, to sell flights and suggesting that passengers should be allowed to watch porn. As the airline reached its thirties and began to dominate the skies, he seemed to grow up, married a former banker, Anita Farrell, had four children and started growing vegetables. As a rival CEO admitted, “He’s competitive, but a gentleman and great entertainment.”
In Belgium, 2001 - GETTY IMAGES
The 58-year-old is still blunt, unable to stop himself commenting on everything from cross-dressing to obese passengers, companion pets on flights and climate change, but he’s engaging and surprisingly empathetic and self-aware, sensibly staying off Twitter and Instagram. “I’d be a disaster,” he says. His eyebrows shoot up.
Ryanair is not everyone’s favourite airline. Its Irish boss, Michael O’Leary, is known for considering a “pay-per-pee” plan for passengers and suggesting they stand. The chief executive of Europe’s largest airline, carrying 154 million “guests” a year, has called regulators “rapists”, rivals “arseholes”, advised customers wanting a refund to “f*** off … We don’t want to hear your sob stories,” and wanted to charge them when they forgot to print their boarding passes. His own staff were once banned from charging their phones at work.
So I fly to Dublin on rival Aer Lingus and assume the Ryanair headquarters will be cramped, the staff cowering and the man himself won’t offer me a coffee unless I cough up. I know I won’t like him.
But the offices are new, the Spanish PR obviously adores her boss, and O’Leary, arriving early wearing jeans and a sweater, not only worries I haven’t had any breakfast and offers to source eggs and bacon, but sends a polite thank-you letter afterwards.
A few years ago, Ryanair, created in 1984, finally started its new customer-friendly overhaul. Since then, O’Leary has stopped giving interviews, dressing up as the Pope or Batman’s sidekick, Robin, to sell flights and suggesting that passengers should be allowed to watch porn. As the airline reached its thirties and began to dominate the skies, he seemed to grow up, married a former banker, Anita Farrell, had four children and started growing vegetables. As a rival CEO admitted, “He’s competitive, but a gentleman and great entertainment.”
In Belgium, 2001 - GETTY IMAGES
The 58-year-old is still blunt, unable to stop himself commenting on everything from cross-dressing to obese passengers, companion pets on flights and climate change, but he’s engaging and surprisingly empathetic and self-aware, sensibly staying off Twitter and Instagram. “I’d be a disaster,” he says. His eyebrows shoot up.
His staff now have a vast canteen and he is building more space, although he is characteristically rude about the procedure. “The planning restrictions are a joke. We have to have wheelchair toilets on every floor, shower facilities … It’s complete and utter bloody nonsense. Fairly shortly we’ll have to have gender-fluid toilets. I’m male today and I’ll be female tomorrow,” he says.
But he is OK with it. When I ask whether he would mind his air stewards wearing skirts, he says he’d concur. “I am sure the day will be coming where some of the men will want to wear dresses and the ladies wear trousers. It’s the way of the world. We are Europe’s largest airline carrying many millions of millennials, so we have to pander to all that nonsense.”
He sounds unreconstructed but he says it with a smile, as though he admires millennials for leaving him exasperated.
The reason he has finally agreed to an interview is because one of his competitors, Flybe, might be bailed out by Boris Johnson’s government – if the proposed reduction in air passenger duty goes ahead – and he’s outraged. “It is owned by three of the biggest billionaires in the aviation industry: Richard Branson, Delta and a US venture capitalist. Flybe has no mission in life; it is a mishmash of rubbish. They can’t compete with Ryanair, Easyjet, motorways and trains,” he says. “If Branson and Delta won’t put their hands in their pockets, why should the taxpayer?”
I’m glad he’s got that off his chest. He laughs. “I’ve actually calmed down a bit now.” Surely there are bigger issues? He once said he’d “shoot environmentalists”, but airlines are now the baddies in the battle to save the planet. “Airlines are the target of choice. When broadcasters want to show the world heating up, they show the contrails behind the aeroplanes taking off,” he says. “Aviation only accounts for 2 per cent of CO2 emissions. Shipping accounts for more, but they don’t show a boat chugging out of the port. The shipping industry was burning dirty diesel until January 1, 2020.”
Yet O’Leary must quietly be worried about CO2 emissions, because he is going to spend £25 billion over the next eight years updating his fleet and making it greener. “They will carry 4 per cent more passengers and will reduce my fuel consumption by 16 per cent per passenger. No other industry is making those kinds of technological innovations. But all the abuse goes to the airlines because some 17-year-old Swedish girl goes, ‘Oh, we shouldn’t be flying.’ It’s OK for her, she can get a racing yacht across the Atlantic with a crew who flew to pick her up.”
It’s the hypocrisy and contradictions that now irritate him. “At the heart of the environmental issue is a sensible objective: let’s be more efficient in the way we live our lives. But the UK and Ireland are islands; we don’t have any choice unless we all stay at home. Eurostar doesn’t have the capacity to take all the 40 million British who want to go on holiday. Instead, we should be saying, ‘What can aviation do to reduce our impact on the environment?’ We need more efficient engines. We can get rid of business class. First class should have gone years ago. We should all fly more densely so at least when we are flying, we are doing it reasonably efficiently.”
He’s almost a billionaire – surely he goes business class? “No. We run a low-fare airline. If I am flying the Atlantic, then I might. But not for day flights. I fly coach.”
While on the subject of billionaires, he would like to talk about private jets and why they are far worse than any of his no-frills flights carrying stag parties, students and families around Europe. “One hundred per cent of private jets are almost empty. Even if they have eight seats, there are usually only one or two passengers.”
O’Leary wouldn’t ban private jets though. “I don’t want to ban things. Superyachts are equally bad. No one really needs a yacht with a helipad and swimming pool – you can swim in the sea. And certainly don’t lecture about the environment if you have one. One of the great negatives of appearing in the Sunday Times Rich List is you get sent details of yacht hires. Ryanair has two private jets, but they are used by the engineering teams to sort problems. I hate them. I want to be in a 737 if I am going to die.”
On promotional duties, 2007 - GETTY IMAGES
Helicopters, he insists, are the worst. “I’m terrified of them. I will not get into a helicopter. Some are badly maintained and the quality f some pilots is very poor. If you fly with commercial airlines, the plane is being used every day and being maintained professionally to within an inch of its life. I don’t understand why anybody with any wealth gets into a chopper. An aircraft has two engines; you lose one and you can still land. A helicopter has one engine and the aerodynamics of a stone. It may be a status symbol, but people who go on helicopters are mad.”
But back to the environment. He does seem to have softened. Did his children, now aged between 9 and 14, make him change his mind? “My children are brainwashed by projects they are doing at school. My 9-year-old arrived home a couple of weeks ago and said, ‘Daddy, you have to fly less.’ I said, ‘Why?’ And he said, ‘Because of my children’s future.’ He is really terrified that the world is going to implode. I explained to him, ‘Listen, if you look at what flying does, it is one of the most efficient forms of transport. It is also one of the safest and we create huge industries for tourism. Many people would be incredibly poor if we didn’t have this industry. We also live on an island.’ ”
His son wasn’t impressed. “So I said, ‘When I was 9 in 1970, it was all nuclear war. In every generation, there is somebody in the marketplace going back to biblical times and saying, “Repent – the end of the world is nigh.” It’s just that the women outside Greenham Common have morphed into Extinction Rebellion loonies.’ ”
His son, who sounds rather like his dad, still wouldn’t budge. “So I said, ‘You are due to go to Portugal for a week at Easter. Do you want to cancel?’ And he said, ‘No.’ I don’t know what he did his project on in the end, but I said, ‘Don’t just follow the herd. Think about it. Get rid of plastics by all means. Do more recycling. But don’t indiscriminately ban things. If you do, why stop at planes? Why not road travel? It counts for 26 per cent of Europe’s CO2 emissions.’ [In fact, according to the European Environment Agency, the transport sector as a whole accounts for 27 per cent of emissions Europe-wide.] I live on a farm. We grow our own vegetables, not because I’m a hippy, but I want the kids to be aware of how to grow strawberries and lettuces. We shouldn’t be buying all our kiwis and kumquats from Latin America. I have the biggest herd of Aberdeen Angus in Ireland. We recycle the cattle’s slurry. I’m looking to change my car into a hybrid. But we can’t entirely act the good life and abandon civilisation.”
He doesn’t watch David Attenborough programmes. “I’m too busy. It’s also somewhat staged; you can always find a turtle with a bottle cap around its neck. There are issues that need to be confronted, but not in the sensationalist way they often are.”
Ryanair, he says, is now 70 per cent plastic free onboard. “In four more years, we expect to be entirely plastic free: wooden stirrers, biodegradable cups … A lot of it is PR stuff, but at least we are trying, and we go to extreme lengths to have high load factors. We were the first airline to have a voluntary carbon offset programme. We ask passengers if they want to make a donation of €1; 3 per cent do.”
But Ryanair is often still cited as the unacceptable face of travel. “There is a snobbism about Ryanair,” he says. “Which? magazine has rated us the worst airline on the planet for seven years in a row, and in that period we have grown from carrying 10 million passengers to 150 million. We get one star for seat comfort; Easyjet gets three for the same seat. We get no stars for in-flight food, but we have Lavazza coffee and paninis. We do charge, but others have followed us because it makes sense. There is less waste.”
George Kerevan wrote an interesting article on Michael O'Leary and Ryanair - for the Scotsman last week.
I think he was spot on - Michael O'Leary has a reputation for being difficult, but invariably he takes the side of his passengers - and gets the job done.
I hope the swashbuckling Irishman gets a crack at opening up longer haul flights - to and from North America.
Because say what you like about Ryanair - the low cost airline has revolutionised air travel in Europe - so maybe he can do the same for Canada and the USA.
Fly in the ointment who puts passengers first
Often cast as the villain of the piece, Michael O’Leary’s stubborn stance could result in a transatlantic bonus for Scots, writes George Kerevan
Michael Kevin O’Leary of Ryanair is many things. A showman who often contradicts himself. A martinet whose abrasiveness towards others frequently lands him in legal hot water. A risk-taker and (metaphorical) brawler in the best Irish tradition – he owns a racehorse called War of Attrition. Above all, O’Leary is a demon entrepreneur who has turned the world of air travel upside down, to the benefit of the fare-paying public as well as his shareholders.
This week Michael O’Leary is in big trouble – again. He is at war with Edinburgh airport, whose largest shareholder is the privately-owned Spanish infrastructure conglomerate, Ferrovial. If you only read the headlines, the story is that O’Leary has axed five Ryanair summer routes from the Scottish capital and is threatening to halve the winter service (with a potential loss of 300 local jobs) in a dispute over the landing fees charged by the airport.
There does seem to be an element of bluff in Mr O’Leary’s threats (as usual). The figure for job losses is O’Leary’s own guess at what the airport itself, allied ground handling firms and the Edinburgh tourist industry might lose from any Ryanair cutbacks. I suspect this is a back-of-the-envelope calculation designed to capture press and political attention, not a genuine number. It also seems to be the case that some of the scheduled routes O’Leary says he will cull don’t actually operate from Edinburgh.
However, all this is beside the point. Michael O’Leary is not planning a reduction in Edinburgh services, he is playing poker with Ferrovial and its BAA subsidiary that currently owns six UK airports, including and Heathrow. In this gladiatorial contest, never forget that Michael O’Leary is on the side of the angels and the passengers.
Ferrovial bought BAA, and with it an effective monopoly of the major UK airports, including Edinburgh, in 2006 for £10.3bn. It borrowed the cash at a time (pre-credit crunch and euro crisis) when Spanish banks were lending money to local companies as if they were printing it, which is a sense they were. After the deal, Ferrovial’s total debt was a staggering £22bn. BAA was itself in heavy debt as a result of massive investment in new shopping malls, otherwise known as terminals. All of which indicated Ferrovial/BAA would need to raise landing fees and ramp up profits from airport retailing in order to pay interest charges.
Landing charges at UK airports are independently regulated by the Civil Aviation Authority (CAA), supposedly in the interests of the passenger. But in 2008, the CAA approved massive increases in Ferrovial/BAA’s landing fees because it was worried about the company’s heavy debts.
O’Leary responded in characteristic style. He said he hoped the take-over of BAA by a foreign company would increase political pressure to split up the ownership of UK airports in order to encourage competition between airports (and hence lower fees). “It doesn’t matter whether it is a British highwayman, a Spanish highwayman or an American highwayman. You are still getting robbed and that won’t change until you break BAA’s monopoly up,” he argued.
Which is exactly what happened. After an inquiry by the Competition Commission, in 2009 Ferrovial/BAA was ordered to sell Gatwick, Stansted and either Edinburgh or Glasgow airports. Gatwick went first, which helped Ferrovial/BAA’s cash flow. But the Spanish company has dragged its feet on selling Stansted and Edinburgh/Glasgow. Last month, the courts forced its hand and BAA announced that Edinburgh would be the next up for disposal.
It is in Ferrovia/BAA’s interest to ensure Edinburgh airport’s revenue stream is maximised before the sale. And since any buyer wants their money back quickly, expect the new owner also to have an interest in squeezing more revenue from the airlines – which means dearer tickets. This is what worries Michael O’Leary and why he is playing hard ball over airport charges. Good for him.
Scotland has been here before. When Ferrovial sold Gatwick, the new owners, Global Infrastructure Partners (GIP), a US private equity firm, applied successfully to the CAA to raise landing charges. They went up a whopping 15.7 per cent for regional operators serving airports such as Inverness. This threatened connections with the north of Scotland. As a result, Highland Council has launched a campaign to defend Inverness airport.
Airlines are not an industry for the faint of heart. Who would want to run a business with high entry costs, volatile fuel prices, ever-increasing regulation, massive competition, and the constant threat of terrorism. It has been estimated that since the birth of passenger airlines the entire global airline business has made a net loss. Only a gambler like O’Leary thrives in this environment.
Brash Michael O’Leary brought low cost airlines to Europe and effectively created a new continent. In his own words: “Ryanair is responsible for the integration of Europe by bringing lots of different cultures to the beaches of Spain, Greece and Italy, where they couple and copulate in the interests of pan-European peace.”
He’s not intent on stopping there. Ryanair has plans to extend its low-cost model to the transatlantic market, with seats as cheap as ten euros. Only the long queue to purchase long-haul aircraft from Airbus and Boeing is holding O’Leary back.
Rather than bash Michael O’Leary for giving folk access to cheap international travel, why not encourage him to run his new transatlantic business from Prestwick, which needs a rationale for existence. At the same time, provide US customs and emigration clearance at Prestwick, so Ryanair’s ‘ten euro’ flights can land at domestic East Coast terminals rather than expensive international ones.
Finally, give Prestwick the same right as Northern Ireland airports have to charge a £12 passenger duty on flights to America instead of £60. Chocks away!
But he is OK with it. When I ask whether he would mind his air stewards wearing skirts, he says he’d concur. “I am sure the day will be coming where some of the men will want to wear dresses and the ladies wear trousers. It’s the way of the world. We are Europe’s largest airline carrying many millions of millennials, so we have to pander to all that nonsense.”
He sounds unreconstructed but he says it with a smile, as though he admires millennials for leaving him exasperated.
The reason he has finally agreed to an interview is because one of his competitors, Flybe, might be bailed out by Boris Johnson’s government – if the proposed reduction in air passenger duty goes ahead – and he’s outraged. “It is owned by three of the biggest billionaires in the aviation industry: Richard Branson, Delta and a US venture capitalist. Flybe has no mission in life; it is a mishmash of rubbish. They can’t compete with Ryanair, Easyjet, motorways and trains,” he says. “If Branson and Delta won’t put their hands in their pockets, why should the taxpayer?”
I’m glad he’s got that off his chest. He laughs. “I’ve actually calmed down a bit now.” Surely there are bigger issues? He once said he’d “shoot environmentalists”, but airlines are now the baddies in the battle to save the planet. “Airlines are the target of choice. When broadcasters want to show the world heating up, they show the contrails behind the aeroplanes taking off,” he says. “Aviation only accounts for 2 per cent of CO2 emissions. Shipping accounts for more, but they don’t show a boat chugging out of the port. The shipping industry was burning dirty diesel until January 1, 2020.”
Yet O’Leary must quietly be worried about CO2 emissions, because he is going to spend £25 billion over the next eight years updating his fleet and making it greener. “They will carry 4 per cent more passengers and will reduce my fuel consumption by 16 per cent per passenger. No other industry is making those kinds of technological innovations. But all the abuse goes to the airlines because some 17-year-old Swedish girl goes, ‘Oh, we shouldn’t be flying.’ It’s OK for her, she can get a racing yacht across the Atlantic with a crew who flew to pick her up.”
It’s the hypocrisy and contradictions that now irritate him. “At the heart of the environmental issue is a sensible objective: let’s be more efficient in the way we live our lives. But the UK and Ireland are islands; we don’t have any choice unless we all stay at home. Eurostar doesn’t have the capacity to take all the 40 million British who want to go on holiday. Instead, we should be saying, ‘What can aviation do to reduce our impact on the environment?’ We need more efficient engines. We can get rid of business class. First class should have gone years ago. We should all fly more densely so at least when we are flying, we are doing it reasonably efficiently.”
He’s almost a billionaire – surely he goes business class? “No. We run a low-fare airline. If I am flying the Atlantic, then I might. But not for day flights. I fly coach.”
While on the subject of billionaires, he would like to talk about private jets and why they are far worse than any of his no-frills flights carrying stag parties, students and families around Europe. “One hundred per cent of private jets are almost empty. Even if they have eight seats, there are usually only one or two passengers.”
O’Leary wouldn’t ban private jets though. “I don’t want to ban things. Superyachts are equally bad. No one really needs a yacht with a helipad and swimming pool – you can swim in the sea. And certainly don’t lecture about the environment if you have one. One of the great negatives of appearing in the Sunday Times Rich List is you get sent details of yacht hires. Ryanair has two private jets, but they are used by the engineering teams to sort problems. I hate them. I want to be in a 737 if I am going to die.”
On promotional duties, 2007 - GETTY IMAGES
Helicopters, he insists, are the worst. “I’m terrified of them. I will not get into a helicopter. Some are badly maintained and the quality f some pilots is very poor. If you fly with commercial airlines, the plane is being used every day and being maintained professionally to within an inch of its life. I don’t understand why anybody with any wealth gets into a chopper. An aircraft has two engines; you lose one and you can still land. A helicopter has one engine and the aerodynamics of a stone. It may be a status symbol, but people who go on helicopters are mad.”
But back to the environment. He does seem to have softened. Did his children, now aged between 9 and 14, make him change his mind? “My children are brainwashed by projects they are doing at school. My 9-year-old arrived home a couple of weeks ago and said, ‘Daddy, you have to fly less.’ I said, ‘Why?’ And he said, ‘Because of my children’s future.’ He is really terrified that the world is going to implode. I explained to him, ‘Listen, if you look at what flying does, it is one of the most efficient forms of transport. It is also one of the safest and we create huge industries for tourism. Many people would be incredibly poor if we didn’t have this industry. We also live on an island.’ ”
His son wasn’t impressed. “So I said, ‘When I was 9 in 1970, it was all nuclear war. In every generation, there is somebody in the marketplace going back to biblical times and saying, “Repent – the end of the world is nigh.” It’s just that the women outside Greenham Common have morphed into Extinction Rebellion loonies.’ ”
His son, who sounds rather like his dad, still wouldn’t budge. “So I said, ‘You are due to go to Portugal for a week at Easter. Do you want to cancel?’ And he said, ‘No.’ I don’t know what he did his project on in the end, but I said, ‘Don’t just follow the herd. Think about it. Get rid of plastics by all means. Do more recycling. But don’t indiscriminately ban things. If you do, why stop at planes? Why not road travel? It counts for 26 per cent of Europe’s CO2 emissions.’ [In fact, according to the European Environment Agency, the transport sector as a whole accounts for 27 per cent of emissions Europe-wide.] I live on a farm. We grow our own vegetables, not because I’m a hippy, but I want the kids to be aware of how to grow strawberries and lettuces. We shouldn’t be buying all our kiwis and kumquats from Latin America. I have the biggest herd of Aberdeen Angus in Ireland. We recycle the cattle’s slurry. I’m looking to change my car into a hybrid. But we can’t entirely act the good life and abandon civilisation.”
He doesn’t watch David Attenborough programmes. “I’m too busy. It’s also somewhat staged; you can always find a turtle with a bottle cap around its neck. There are issues that need to be confronted, but not in the sensationalist way they often are.”
Ryanair, he says, is now 70 per cent plastic free onboard. “In four more years, we expect to be entirely plastic free: wooden stirrers, biodegradable cups … A lot of it is PR stuff, but at least we are trying, and we go to extreme lengths to have high load factors. We were the first airline to have a voluntary carbon offset programme. We ask passengers if they want to make a donation of €1; 3 per cent do.”
But Ryanair is often still cited as the unacceptable face of travel. “There is a snobbism about Ryanair,” he says. “Which? magazine has rated us the worst airline on the planet for seven years in a row, and in that period we have grown from carrying 10 million passengers to 150 million. We get one star for seat comfort; Easyjet gets three for the same seat. We get no stars for in-flight food, but we have Lavazza coffee and paninis. We do charge, but others have followed us because it makes sense. There is less waste.”
Chocks Away (08/03/12)
George Kerevan wrote an interesting article on Michael O'Leary and Ryanair - for the Scotsman last week.
I think he was spot on - Michael O'Leary has a reputation for being difficult, but invariably he takes the side of his passengers - and gets the job done.
I hope the swashbuckling Irishman gets a crack at opening up longer haul flights - to and from North America.
Because say what you like about Ryanair - the low cost airline has revolutionised air travel in Europe - so maybe he can do the same for Canada and the USA.
Fly in the ointment who puts passengers first
Often cast as the villain of the piece, Michael O’Leary’s stubborn stance could result in a transatlantic bonus for Scots, writes George Kerevan
Michael Kevin O’Leary of Ryanair is many things. A showman who often contradicts himself. A martinet whose abrasiveness towards others frequently lands him in legal hot water. A risk-taker and (metaphorical) brawler in the best Irish tradition – he owns a racehorse called War of Attrition. Above all, O’Leary is a demon entrepreneur who has turned the world of air travel upside down, to the benefit of the fare-paying public as well as his shareholders.
This week Michael O’Leary is in big trouble – again. He is at war with Edinburgh airport, whose largest shareholder is the privately-owned Spanish infrastructure conglomerate, Ferrovial. If you only read the headlines, the story is that O’Leary has axed five Ryanair summer routes from the Scottish capital and is threatening to halve the winter service (with a potential loss of 300 local jobs) in a dispute over the landing fees charged by the airport.
There does seem to be an element of bluff in Mr O’Leary’s threats (as usual). The figure for job losses is O’Leary’s own guess at what the airport itself, allied ground handling firms and the Edinburgh tourist industry might lose from any Ryanair cutbacks. I suspect this is a back-of-the-envelope calculation designed to capture press and political attention, not a genuine number. It also seems to be the case that some of the scheduled routes O’Leary says he will cull don’t actually operate from Edinburgh.
However, all this is beside the point. Michael O’Leary is not planning a reduction in Edinburgh services, he is playing poker with Ferrovial and its BAA subsidiary that currently owns six UK airports, including and Heathrow. In this gladiatorial contest, never forget that Michael O’Leary is on the side of the angels and the passengers.
Ferrovial bought BAA, and with it an effective monopoly of the major UK airports, including Edinburgh, in 2006 for £10.3bn. It borrowed the cash at a time (pre-credit crunch and euro crisis) when Spanish banks were lending money to local companies as if they were printing it, which is a sense they were. After the deal, Ferrovial’s total debt was a staggering £22bn. BAA was itself in heavy debt as a result of massive investment in new shopping malls, otherwise known as terminals. All of which indicated Ferrovial/BAA would need to raise landing fees and ramp up profits from airport retailing in order to pay interest charges.
Landing charges at UK airports are independently regulated by the Civil Aviation Authority (CAA), supposedly in the interests of the passenger. But in 2008, the CAA approved massive increases in Ferrovial/BAA’s landing fees because it was worried about the company’s heavy debts.
O’Leary responded in characteristic style. He said he hoped the take-over of BAA by a foreign company would increase political pressure to split up the ownership of UK airports in order to encourage competition between airports (and hence lower fees). “It doesn’t matter whether it is a British highwayman, a Spanish highwayman or an American highwayman. You are still getting robbed and that won’t change until you break BAA’s monopoly up,” he argued.
Which is exactly what happened. After an inquiry by the Competition Commission, in 2009 Ferrovial/BAA was ordered to sell Gatwick, Stansted and either Edinburgh or Glasgow airports. Gatwick went first, which helped Ferrovial/BAA’s cash flow. But the Spanish company has dragged its feet on selling Stansted and Edinburgh/Glasgow. Last month, the courts forced its hand and BAA announced that Edinburgh would be the next up for disposal.
It is in Ferrovia/BAA’s interest to ensure Edinburgh airport’s revenue stream is maximised before the sale. And since any buyer wants their money back quickly, expect the new owner also to have an interest in squeezing more revenue from the airlines – which means dearer tickets. This is what worries Michael O’Leary and why he is playing hard ball over airport charges. Good for him.
Scotland has been here before. When Ferrovial sold Gatwick, the new owners, Global Infrastructure Partners (GIP), a US private equity firm, applied successfully to the CAA to raise landing charges. They went up a whopping 15.7 per cent for regional operators serving airports such as Inverness. This threatened connections with the north of Scotland. As a result, Highland Council has launched a campaign to defend Inverness airport.
Airlines are not an industry for the faint of heart. Who would want to run a business with high entry costs, volatile fuel prices, ever-increasing regulation, massive competition, and the constant threat of terrorism. It has been estimated that since the birth of passenger airlines the entire global airline business has made a net loss. Only a gambler like O’Leary thrives in this environment.
Brash Michael O’Leary brought low cost airlines to Europe and effectively created a new continent. In his own words: “Ryanair is responsible for the integration of Europe by bringing lots of different cultures to the beaches of Spain, Greece and Italy, where they couple and copulate in the interests of pan-European peace.”
He’s not intent on stopping there. Ryanair has plans to extend its low-cost model to the transatlantic market, with seats as cheap as ten euros. Only the long queue to purchase long-haul aircraft from Airbus and Boeing is holding O’Leary back.
Rather than bash Michael O’Leary for giving folk access to cheap international travel, why not encourage him to run his new transatlantic business from Prestwick, which needs a rationale for existence. At the same time, provide US customs and emigration clearance at Prestwick, so Ryanair’s ‘ten euro’ flights can land at domestic East Coast terminals rather than expensive international ones.
Finally, give Prestwick the same right as Northern Ireland airports have to charge a £12 passenger duty on flights to America instead of £60. Chocks away!
