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The idea was simply to make money
Michael O'Leary made a huge success out of no-frills Ryanair. Even if it - and he - aren't very well-liked.
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Michael O'Leary: A Life in Full Flight
By Alan Ruddock
Penguin, $30
This is a book that claims to be a biography, but is in fact the story of a company -- albeit an extraordinary and idiosyncratic one -- that has taken its identity and controversial way of doing business from one man. Characteristically, Michael O'Leary, the boss of Ryanair, wanted nothing to do with the project. As far as O'Leary is concerned: "Business books are [useless] and are usually written by wankers."
Undeterred, Alan Ruddock, a journalist who was a university contemporary of O'Leary's at Trinity College in Dublin, Ireland, has written a very readable account of Ryanair's rise. His narrative takes the company from its early loss-making days in the late 1980s, when it fought for survival against the tactics of government-owned Aer Lingus, through its pioneering of no-frills flying in Europe's rapidly liberalizing aviation market in the 1990s, to its status today as one of the most profitable carriers in the world. It is also the "least liked," according to a poll last year by TripAdvisor, a travel website.
That is the paradox of O'Leary's Ryanair. It is hugely successful. It has brought flying within the reach of people of the most limited means. It has helped to change the economic prospects of neglected parts of Europe by bringing passengers and their money to under-used provincial airports. But at the same time, Ryanair has become a byword for appalling customer service, misleading advertising claims and jeering rudeness toward anyone or anything that gets in its way.
To an unusual degree, what is good and bad about Ryanair and O'Leary are opposite sides of the same coin. Sent to the airline in 1988 by his mentor Tony Ryan, the founder of Guinness Peat Aviation, the largest aircraft-leasing firm in the world before its dramatic downfall in 1992, O'Leary was told to do whatever was necessary to make Ryanair profitable. Driven by a deal that would pay him 25 percent of any profit above about $4 million, he set about reducing costs with dogged determination.
By his own admission, O'Leary had no great vision for Ryanair, other than to make money. But an unstoppable business model soon began to evolve. If Ryanair could have lower costs than anyone else, it could also have lower prices. And if prices were low enough, it could fill seats on almost any route.
According to Ruddock, that led O'Leary to three further conclusions. The first was to increase capacity relentlessly, even during downturns in a notoriously cyclical industry. The second was that there are all manner of ways of wringing money from the business other than selling tickets. Passengers were not only captive customers for food and drink but, from Ryanair.com, they could be sold rental cars, insurance, hotel bookings and airport transfers. The third was that those marginal, out-of-the-way airports would pay Ryanair to bring them passengers.
What has made Ryanair so disliked, even by customers who continue to fly with it, is O'Leary's tendency to rough up anyone who comes within range. Government ministers, union leaders and people running big airports can look after themselves even if they may be taken aback by O'Leary's typically four-letter-word abuse. But the cavalier treatment of passengers left stranded by flight cancellations and the yelling of obscenities at people who, in sometimes tragic circumstances, make the mistake of asking for a refund have given Ryanair a deserved reputation for nastiness.
O'Leary has never complained about being seen as a foul-mouthed bully. He maintains that there is no such thing as bad publicity, and that the fights he picks are all intended to drive home the message that Ryanair's approach to costs is a war that has to be ruthlessly conducted on many fronts. However, even he seems to recognize that behavior that might have been just about tolerable when Ryanair was a scrappy upstart may not be appropriate now that it is an 800-pound gorilla. But Ruddock suggests that he would rather quit Ryanair than change.
And, seeing as how O'Leary is worth about $841 million, according to this year's Sunday Times Rich List, he can certainly afford to go. Only when he does will we know whether a kinder, gentler Ryanair can be as profitable as his snarling creation. Sadly, the answer is probably no.
THE ECONOMIST
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