Michael O'Leary (34 page)

Once one of the poorest and least progressive in Europe, Ireland's economy had been growing at a phenomenal rate. The country was in the grip of a virtuous economic cycle, with surging employment delivering high tax revenues for government, which in turn spent ever more on the nation's infrastructure, further fuelling the boom. The demographics were young – in 1999 40 per cent of the population was under twenty-five – and the traditional powers in Irish society were falling away. The Roman Catholic Church, the moral power behind Irish governments up until the late 1980s, had been brought to its knees by emerging stories of systemic child sexual abuse by parish priests and in Church-run institutions, and Ireland's political class was rocked by allegations of corruption at the highest levels of the establishment, allegations
that prompted the creation of a series of public tribunals of inquiry which would expose a rotten culture of self-aggrandizement.

Freed of the inhibitions that had governed their parents and grandparents Ireland's youth was letting down its hair. Instead of being forced to emigrate, as half a million had in the decade from 1979 to 1989, they were able to get jobs at home and had money to spend. They had the world at their feet, and Ryanair was the airline to help them explore it.

Irish pilots were among the direct beneficiaries of the airline's growth. In the late 1990s opportunities for pilots in Ireland were few and far between. Aer Lingus, which was finally carving out a modest profit after its latest reconstruction, was not expanding, and carriers with smaller planes, such as Aer Arann, were not an attractive prospect to men and women who dreamed of flying the newest jet aircraft. ‘I joined in 1999,' says one pilot who is now a captain with the airline. ‘It was the only job for pilots. It was a different time. Before that there was no jobs. You got a job with Aer Lingus if you were very lucky, or you flew little aeroplanes for small companies like Iona. When Ryanair [started to expand] there was lots of jobs.'

Aer Lingus was still offering a small number of highly coveted cadetships, which included fully paid training for new pilots, but at Ryanair things were different. ‘It was do it yourself,' says one pilot. ‘Ryanair would train you on the 737, and the cost of the training was taken out of your salary over the next three years.' Ryanair's pilots also learned that flexibility was an absolute requirement of the job. ‘You join the company, and the contract says you can be sent to any base at any time,' says the pilot. Back in 1999 the only other base was Stansted.

‘I hated Stansted,' says one staff member who was based there. ‘It is not London, it is forty minutes on the train from London. It's like living in Naas [a satellite town some thirty miles from Dublin] and saying you live in Dublin.'

O'Leary's doggedness, his refusal to let even the smallest irritation remain unscratched, came as a shock to Kerry airport in the late
summer of 1999. The airport's management had hoped that the temporary furore caused by its decision to introduce a £5 levy on passengers would fade away and that O'Leary would learn to live with a minor inconvenience.

‘The levy had operated peacefully for a couple of months,' says a former Kerry executive. Ryanair's pamphlet campaign against the charge had had an impact – about half the passengers at the airport refused to pay, while the other half handed over their £5 without a murmur. Those who would not pay were still allowed to board their flights as Kerry sought to raise money and avoid controversy. ‘And then,' he says, ‘without much discussion either way, Ryanair went down the legal route. In a way we weren't surprised, because to be honest nothing would ever surprise me with Ryanair.'

O'Leary, frustrated by the airport's persistence, had decided to force the issue to a conclusion. Ryanair, according to the executive, argued that ‘the terms of the particular agreement they had with us stipulated that additional charges could not be imposed. They argued that even if they were not imposed directly on Ryanair they could not be imposed on passengers using Ryanair.'

What had started as a minor row, a scuffle over a small charge at a relatively unimportant airport, escalated into a bitter dispute that would now demand a disproportionate amount of Ryanair's management time. O'Leary, though, was sending out a clear message to all other regional airports. In early August he had threatened to ‘re-evaluate' Ryanair's future at Kerry if the levy was not dropped, but his threats had been ignored.

So he took his battle to the High Court. The Irish courts are practically dormant in August, as barristers and judges swap the Four Courts for their annual holidays, so Ryanair applied for a temporary injunction to prevent Kerry airport from levying the fee until the courts returned to normal service in September. The job of marketing the legal challenge to the media fell to Michael Cawley, Ryanair's then commercial director. ‘We left a legal challenge until now because we thought the airport management would come to their senses,' Cawley told journalists. ‘At this stage, however, things have got out of hand.'

The legal battle was to prove complex and costly. The High Court initially granted Ryanair's injunction in September, but the airport was subsequently granted a stay against the injunction so it could appeal to the Supreme Court. The Supreme Court backed Ryanair, and Kerry airport was once again prevented from applying the charge until a full hearing had been arranged in the High Court.

As costs rose, settlement became a priority for the airport, which did not have the deep pockets required for a lengthy legal battle. ‘It got very bitter towards the end,' says the executive, ‘and it was going to start getting very expensive. On top of that Ryanair had cut back some flights, so it was down to three or four days a week. It just didn't make any sense for them or us to prolong it.' He says that it came to a head when Peter Bellew, a senior manager at the airport, received notice that he was going to be a star witness at the legal hearing. ‘Bellew just said enough was enough. He was about to go on holiday, his wife was pregnant and it was a stupid dispute,' the former executive says.

Bellew reckoned that a full legal hearing could be embarrassing and potentially damaging for Ryanair because once ‘you get into the discovery of documents, we could have sought discovery of all the deals they had made across Europe. It didn't make sense for two Irish companies to be fighting each other like that.'

With a settlement his sole objective, Bellew called O'Leary. ‘He said, “Listen, lads, I don't know anything about the lawyers, but can we not sort this out?” He had to listen to a bit of a tirade for a few minutes and then he said, “So what do you want?” And O'Leary mentioned a figure to sort it out that was ridiculous. Bellew said a figure and O'Leary said, “No no no, I can't do that.” And Bellew said, “Go on go on go on go on” like Mrs Doyle [a character in
Father Ted
] and he started laughing. Michael Cawley was on the speaker phone as well and he started laughing as well.'

Eventually, a figure was agreed and O'Leary insisted on immediate closure. ‘He agreed the figure, and then said, “If we don't get all the paperwork done by four o'clock it's double that, and if we don't get agreement by tonight it's treble that.“' Bellew met
the deadline, and peace was re-established. ‘They [Ryanair] very publicly acknowledged that it had been sorted out and that we were back on level ground,' says the executive, ‘and they acknowledged very publicly that even while the legal [dispute] had been going on that operationally our relationship had always gone well. And then they had a seat sale.'

Once again, O'Leary capitalized on media coverage of a dispute to promote routes and sell tickets. At the same time he won his battle by eradicating the levy. It was a comprehensive victory over a tiny, vulnerable airport operator. For once O'Leary had been Goliath, and he had shown no mercy.

While Kerry rolled over, Aer Rianta was a much more resilient foe. The trigger for renewed hostilities was the government's plan to break up the state monopoly, replacing it with separate authorities to run the airports at Dublin, Cork and Shannon. There was widespread speculation that Shannon would be the first piece of the Aer Rianta jigsaw to be hived off.

Shannon's fortunes were largely dependent on an archaic quirk of Ireland's bilateral air travel agreements with the United States, which required a large percentage of flights to the US to touch down there even though it was just twenty minutes' flight time from Dublin airport. The rule had been designed to save Shannon from closure. Europe's westernmost airport, technological advances in air and jet travel since the 1950s had made it redundant. Modern airliners could travel with ease from the US to Dublin, London or any European capital without the need to refuel at Shannon. Ireland, however, had continued to insist on the rule because successive governments feared that the airport had no future without it.

O'Leary disagreed. He announced that he would bring five new routes to the airport in a move that would create 150 jobs – but only on condition the government supported his plan for a second, independent, terminal for Dublin airport. ‘The Shannon proposal was O'Leary's idea,' Tim Jeans says. ‘Shannon was on its knees, and we thought we could use it for leverage. Dublin was the big
prize. If we could transform Dublin into a long-term low-cost base, no stone would be left unturned.'

It was a smart piece of opportunism. O'Leary was confident that Shannon could sustain new routes – lying on Ireland's western coast, the airport is well located for tourist traffic heading north towards Galway or south to Kerry – and he knew that without new route development, Shannon's future was in serious peril.

The Irish government faced a stark choice. On one side they had TDs and businesses from the west of Ireland lobbying for the salvation of their airport; on the other they had Aer Rianta and SIPTU, who were both determined to resist Ryanair's vision for Dublin, no matter the cost. O'Leary further stirred the waters by claiming that Mary O'Rourke, the minister for transport, had invited him to make proposals that could help Shannon. ‘She came to us last May and asked us to come up with a plan in Shannon,' he said. ‘Shannon will always be politically sensitive until someone goes in and puts some traffic in there. We can do that.'

But O'Rourke baulked at the price that O'Leary wanted to extract. ‘I think it is awful that Mr O'Leary is asking for a slice of Dublin airport as part of the deal,' she said. ‘It would seem that he doesn't want to come back to Shannon, and he seems determined on the coupling of the Dublin and Shannon proposals.'

In the event, O'Leary held back on developing routes from Shannon and the government ignored the mounting pressure to develop new facilities at Dublin.

O'Leary's style in his dealings with the state was very unIrish: instead of lobbying ministers politely he chose to ridicule and harangue them, appealing instead to the ordinary voters and travellers, to whom he promised lower fares if inefficient state monopolies could be broken down.

‘What mystifies me in Ireland is we have this complacency,' O'Leary said in an RTE radio interview in 1998. ‘Why doesn't somebody call our bluff? If they think we are not serious about [building a terminal at Dublin airport] why don't they say, “Ryan-air, off you go, build your terminal, spend your twelve million.”?'

His question went unanswered but it touched on one of the central criticisms of O'Leary's attitude to Dublin airport: was he serious or was he just making mischief?

At the end of October O'Leary was given a chance to make his case for the second terminal in a more conventional arena when he was invited to appear before the Dáil committee which dealt with transport affairs to outline his plans. He broke with his normal check shirt and jeans and donned a suit and tie for the occasion. While O'Leary was keen to discuss Terminal Ryanair, the members of the committee were more interested in hearing about Ryanair's tumultuous relationship with the British advertising watchdog, the ASA.

Emmett Stagg, a Labour party TD, was particularly concerned that Ryanair had been censured by the ASA thirteen times. Shane Ross, an independent senator who doubled as a business journalist, said the company's relationship with the Irish ASA was equally ‘deplorable‘, resulting in six complaints, three of which were upheld. This, according to Ross, meant that half of the company's ads were ‘misleading, untrue, dishonest and unacceptable to an independent body‘, casting a considerable shadow over O'Leary's credibility.

‘What you say is very impressive,' Ross said, ‘but can I believe a word you are saying when an impartial body says you are lying?'

Ross and Stagg set the tone for a hostile grilling, but O'Leary refused to be drawn into apologies. Talking about one case, where an error by an employee in an advertisement had resulted in a GB£18,000 ASA fine for Ryanair, O'Leary left the committee in little doubt as to where his priorities lay. ‘All advertising is now being vetted by three different people in the company, not only because we do not want to mislead consumers but because we do not want to waste £18,000.'

Two weeks later Aer Rianta had the chance to make its own presentation to the committee on Ryanair's terminal proposal. Noel Hanlon, its chairman, did not hide his contempt for O'Leary's plans: Ryanair was telling ‘blatant lies‘, he told the committee, and the airline wished to design a ‘cowshed' and not an airport terminal.

O'Leary was incensed and responded with a terse letter to the committee on 22 November threatening legal action if an apology from Hanlon was not forthcoming. ‘Failing this, Ryanair will have no alternative but to initiate legal proceedings against Aer Rianta for libel so that we may have this untrue accusation laid to rest and Ryanair's good name and reputation restored.'

Once again, what had begun as a matter of vital importance for Ireland's infrastructure and the future of its tourism industry had become a personality clash between Hanlon and O'Leary. ‘There was a lot of personal antipathy between O'Leary and Hanlon,' recalls Tim Jeans. ‘It probably was a big obstruction to the whole process.'