Strategic Meetings Summit London, 26 September,
September 29 2022, Kimpton Fitzroy London
Friday 30 September 2022, JW Marriott Grosvenor
ABTN continues to be inundated with complaints and unfriendly comments regarding Ryanair. Chief executive Michael O”Leary”s normal retort is that the travelling public vote with their feet (he actually uses somewhat stronger words which would seem to indicate a lack of vocabulary). However it is no good saying that it is what the public wants. After all, the Romans flocked to the Colosseum to see the Christians being thrown to the lions and the French packed the squares for the daily ritual of the guillotine. It is true that O”Leary has driven a stagecoach through the regulations and helped to reduce airfares, and improve the efficiency of airlines but conversely his use of the English language is not the way to impress a younger generation and it seems that the rules are only fair when they suit Ryanair.
The O”Leary attitude was brought firmly home during the celebrations to commemorate the end of the Second World War. Microsoft”s Bill Gates appeared. Love or hate the Californian wiz kid, even the most cynical of observers must agree that he has been charitable. The great men of commerce have recognised that you cannot take it with you, Rothschild, Carnegie, Nuffield and even Alan Sugar, to name but a few. An approach to Ryanair regarding O”Leary”s charitable donations just receives a rebuff. The airline has given a small donation to a school near Stansted. The shareholders do not do any better either. The airline has never paid a dividend. Some would say, nothing wrong with that. Ryanair is a gamblers” investment ” after all it is Irish.
Mr O”Leary some time past took up his cudgels regarding handicapped passengers. We think he was right and that the airports should pay for their handling (and ultimately the government). But Mr O”Leary, rebuffed, has suddenly gone quiet. Look at his web site. He charges everyone ”3 as a sort of disabled client contribution. ”90m revenue on 30m passengers. How many wheelchair clients does he have? In theory up to four per flight but de facto far less. We estimate disabled passengers cost him five million sterling maximum.
O”Leary rants and raves about the EC (and anyone else that does not see life as he does). He has been allegedly subsidised by BAA in a bid to get Stansted off the ground. A purpose-built terminal was constructed at no cost to Ryanair ” were they both subsidised by Heathrow? Someone paid. O”Leary will happily use a second runway if it gets off the ground providing there is no charge to him.
At some point a level playing field is needed. He complains against air traffic and its costs but again it looks like he is being subsidised. A typical flight out of Stansted to Newquay across some of the most congested air space in the world includes numerous calls to various ATC operators. The cost, ”367 or a little over ”2 per passenger. A Virgin Atlantic departure from Heathrow to Las Vegas is charged at ”2,745, just under ”7 per person. That flight requires the minimum of calls as it climbs to 35,000ft and out of British airspace. The pricing should be the other way around. And while we are mentioning Newquay, the airline”s latest attack is against the good folk of Cornwall who want to charge ”5 extra per passenger towards the airport infrastructure. O”Leary”s retort is threatening to reduce the service. Or is he not doing quite as well as he says? Surely clients who can afford to fly to a holiday in the southwest can pay a sensible figure for their handling at the airport. He is also complaining about Thomson Travel in the latest of a series of barely intelligible press statements. Thomson is taking him on all over the place! (see below.)
At the end of the day Ryanair is de facto a British airline (the vast majority of its business is to and from the UK), though registered in Ireland. He pays his fees to the tiny Irish regulatory authority, a fine organisation, but lacking the resources and teeth of the much larger and more experienced UK CAA. For the future, more and more of Ryanair”s income will be generated from mainland Europe as the airline expands. Who will monitor the carrier? The Irish CAA and tax authorities, hardly likely. The EC, we shall see.
Ryanair”s accomplishment is due to its relentless ambition to drive down costs. It is also a child of our times, direct selling on the Internet, multi-national with its only loyalty to O”Leary, and of course cash positive, perhaps the biggest change-around in the airline business over the last decade. It has often been said that the O”Leary Ryanair has been modelled on Herb Kelleher and the success of Southwest of Dallas, Texas. There is one big difference. The Irish American prides himself with a user-friendly airline; you don”t find Southwest dumping its passengers in the middle of nowhere (well Carcassone to the honest ” it is 40 miles from Toulouse), and telling them to find their own way home. In fact O”Leary”s relationship with Kelleher, and indeed the whole history of Ryanair, is somewhat sympathetically told in the 2005 paperback version of Siobhan Creaton”s 276 - page volume, ”How a Small Irish Airline Conquered Europe”. It is there, warts and all, but glosses over some of the significant moments including P.J. McGoldrick”s dismissal; the financial side of the move to Stansted (but notes the hospitality given to the Stansted boss), and seems to miss out entirely the assistance of the Scottish Executive regarding Prestwick. No mention of any refinancing of aircraft. And good luck to O”Leary in gaining assistance from airports all over Europe. It is up to other carriers to seek the same.
What for the future? Only last week O”Leary was talking about air travel for free (for some). There is nothing free in this world, it all has to be paid for. On the face of it the future is more Ryanair but somewhere there is a big black hole. O”Leary may not yet be Ireland”s richest man but at some point even he must call it quits. Or will he?
Ryanair ”How a Small Irish Airline Conquered Europe” £6.99 .