Industry News

Michael O’Leary: Ryanair’s outspoken boss

Michael O'LearyImage copyright
Getty Images

Michael O’Leary, the outspoken boss of low-cost airline Ryanair, has been no stranger to controversy.

Mr O’Leary, who has agreed to stay on for another five years, is well-known for not being shy about expressing his views, famously excoriating his staff, his customers, competitors, regulators, governments, and groups such as environmentalists and scientists.

Mr O’Leary, who comes from a wealthy background, went to the same boarding school that James Joyce previously attended, Clongowes Wood College.

However, the similarities between the two pretty much end there.

He does not have quite the same turn of phrase as Mr Joyce did.

He once said of passengers looking for a refund: “We don’t want to hear your sob stories. What part of ‘no refund’ don’t you understand?” and has said he doesn’t believe in man-made climate change.

Image copyright
Getty Images

Image caption

Michael O’Leary taking on competitor BA in another Ryanair marketing wheeze in 1998

Stelios Haji-Ioannou, the entrepreneur who founded Easyjet, once told the BBC: “I think he comes across as a very rude person to his customers – you know, the ‘F this and F that’ philosophy of customer care.

“He’s actually invented, if you like, a new sector in aviation, which is people who, in order to save another £10, £15 are willing to spend two hours on a bus getting to and from an airport, and spend half of that saving sometimes on a bus fare.

“He’s developed a market. These people are more price sensitive that anything else, and therefore they accept this verbal abuse that they get sometimes.”

Ryanair decided to be a bit nicer to customers after a drop in profits in 2014, but that policy didn’t stop the firm from introducing new bag rules earlier this year which mean customers who want to take anything more than a small bag on board need to pay more.

Mr O’Leary has also been a vocal critic of Brexit, having long been concerned about the impact on air travel between the UK and the EU, and worried about the possibility of a hard border between Northern Ireland and the Republic of Ireland.

Ryanair beginnings

After leaving Trinity College in Dublin, Mr O’Leary trained as a tax accountant with a firm which became part of KPMG.

He was later employed by Tony Ryan, whose sons were also educated at Clongowes.

Mr Ryan made his fortune leasing aircraft in the 1970s and 1980s, before setting up Ryanair in 1985 as a small airline operating between Waterford and Gatwick.

The company got into difficulties because of high costs and low passenger numbers before Mr O’Leary joined in 1988 as chief financial officer.

He initially told Mr Ryan to just shut the airline down, but as a last resort, Mr O’Leary tried a low-fare model, ditching business class in favour of a “one-size-fits-all” approach.

Image copyright
Getty Images

Image caption

Ryanair seats don’t recline as part of efforts to get customers on and off planes more quickly

The airline was restructured in 1990, copying the Southwest Airlines model of low fares.

Mr O’Leary became chief executive in January 1994.

Cost ‘obsession’

So what was the secret of Ryanair’s and Mr O’Leary’s success?

“He will cut fares to whatever it takes to get people on his planes,” says Independent travel editor Simon Calder.

“He has gone further than any other airline boss in terms of just cutting, cutting, cutting,” Mr Calder says, adding that Mr O’Leary has “an obsession about costs”.

Ryanair cuts costs in many ways, including getting passengers to check in online or pay for doing so at the airport, charging for putting bags in the hold, and charging customers who want to choose seats.

And it has been a very profitable and popular model.

Image copyright
Getty Images

Image caption

Mr O’Leary is not known for praising his staff

Forbes estimates Mr O’Leary to be worth about $1.1bn (£860m), and Ryanair says it carried 130 million passengers in 2017-18, up from 120 million the previous year.

‘Lazy’ staff

Mr O’Leary has described his staff as his “biggest cost”, saying: “We all employ some lazy bastards who needs a kick up the backside, but no-one can bring themselves to admit it.”

In July 2018 his cabin crew banded together with a list of demands including sick pay, predictable working hours, minimum rest periods, and an end to having to pay for their own water, food and uniforms.

Pilots too have not been happy with pay and working conditions.

A series of strikes over the summer meant hundreds of flights were cancelled, and Ryanair’s refusal to compensate tens of thousands of UK-based customers led to the Civil Aviation Authority saying it would take legal action against the airline.

Despite the controversies, Simon Calder says on a personal level Mr O’Leary is “absolutely charming” and a “highly entertaining and interesting person”.

However, he adds: “I’m not sure if I’d have quite the same attitude if I actually worked for Ryanair.”

Source

neallesh@yahoo.co.uk

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.