Michael O'Leary (53 page)

O'Leary claims he is not essential to Ryanair. When asked about his role at the company he says he is ‘just a big mouth on top of a fantastic group of people'.

I think it is shite to say that I'm indispensable. This company stands on its own. It may have needed me ten years ago. There is a much deeper, wider management team at this company now than me. I am sadly and depressingly replaceable and dispensable, and at some point in time in the future it will replace me. I suspect it won't be in the near-term future, although I don't doubt there are some people who would like to see me resign or fired.

O'Leary had weathered the storm, and succession receded as an issue almost as soon as it had arisen. Charleroi had been a catastrophe, but only because he said it was. The airline sector was facing Armageddon, a perfect storm and a bloodbath, but only because O'Leary wanted it that way.

He controlled the capacity which was savaging fares in the market, and he was prospering because his costs allowed his fares to undercut anyone else's. His competitors would feel the pressure, and anyone thinking of launching a competitor would think twice.

Just after 8.30 on a bright October morning in Boeing's Renton production facility, four miles outside Seattle on the north-west coast of the United States, Michael O'Leary walked through a clutch of senior Boeing executives and jumped lightly on to a stage. Wearing his trademark jeans and open-neck check shirt and clutching a bottle of Coke, O'Leary acknowledged the applause from the crowd, smiled, took a drink from his bottle and settled into his act.

As a measure of its respect for its second most important customer, Boeing had decided to transmit O'Leary's presentation live across its company intranet to other Boeing plants, and he had promised to keep his swearing to a minimum. ‘So I won't say screw Airbus,' he shouted, ‘or bleep the French.'

We like to think in Ryanair we have a number of traits in common with Southwest [Boeing's largest customer]. Firstly it's run by the drunken Irish, and we like to pride ourselves on our ability to party, and fly while over the limit. Secondly the Irish and the Texans have a number of other things in common, like humility, religion, gun laws.

His audience lapped it up, clapping and laughing as O'Leary beguiled them for an hour with his peculiar mix of hard business facts, stage-Irish showmanship and frequent declarations of love and respect for the men and women ranged in front of him.

There is no doubt that you people build the best goddam aircraft in the entire world. The thing that made Ryanair stand out from the crowd in Europe, instead of being just another small shitty European regional airline, was our decision back in 1994 to go with Boeing 737s. We are an oasis of Boeing in a sea of Airbus all over Europe. We are an oasis
of punctuality and profitability in a sea of losses and shitty delays all over Europe.

Apart from the front row, where the aircraft manufacturer's senior executives had gathered to watch, his audience was blue collar, the production workers who put the finishing touches to Boeing's 737 series of passenger jets after the various parts had arrived from around the globe. More than a thousand thronged a small corner of the vast production facility that sprawls across 230 acres of former marshland, downing tools to listen to the man they see as both hero and saviour. O'Leary may not be Boeing's biggest customer but he is arguably closest to their hearts.

‘We love Michael,' says Carolyn Corvi, then Boeing's vice president in charge of the huge Renton facility. ‘He can connect with the workers, he is at ease with everybody and he's such good fun. He's the only chief executive who has ever picked me up and dumped me in the engine of a Boeing 737.' Ever the showman, O'Leary repeated the trick a couple of hours after his speech at the official handover ceremony for the new aircraft at Boeing's airport, Seattle Field.

O'Leary for once seemed faintly embarrassed by the adulation. Where Boeing sees him as a saviour, as the perfect customer who will promote their cause with evangelical zeal across Europe, extolling the virtues of their 737 over the rival attractions of Airbus's A320, he sees Boeing as a deal. Where they seek a close customer relationship, a bond that will see them through the rough times together, he seeks ever-lower costs. O'Leary will stand and deliver for Boeing in Europe, he will tell anyone who cares to listen that Boeing's planes are the best, but in return he wants discounts, not love.

He may look and sound like a showman, but O'Leary is at heart an accountant, with an eye for detail and a nose for savings that make him an uncompromising negotiator who will take brinkmanship to the highest level. Boeing might love him, but they also know that if the price is right he will, without blinking, switch his allegiance to their arch-rival.

Amid the jokes, O'Leary had a serious message. His business philosophy, he said, was simple: keep reducing costs, keep lowering fares and the competition will be blown away. He told the Boeing employees that they would work together to take those costs lower still and begged them to come up with a solution for the one part of the Boeing 737 that drives him mad – the forward airstairs, which are cumbersome to use. ‘I don't know if there is anyone there who has anything to do with the installation of the forward airstairs – if there is I'd like you to stick your hands up so that I know where you're sitting, cos when I'm finished talking here I'm coming after you people,' he joked – but he was also deadly serious. Those airstairs – which allow Ryanair to unload its passengers without relying on ground staff at the airport – are an important cog in the airline's machine-like efficiency.

As he neared the end of his session with the Renton workers, O'Leary was running short of inspiration. His questioners were polite but hardly probing and the mood was in danger of shifting from rapt attention to listlessness. The showman, however, had to end on a high note.

He rallied the crowd once again by telling them that he would take one of the new Boeings, painted in the aircraft manufacturer's new Dreamliner livery, to every airport in Europe and ‘kick the shit out of Airbus'. The workers hollered their approval. Carcassonne, a small airport near Toulouse, the French city where Airbus is headquartered, would be festooned with posters calling it ‘Boeing country' and he planned a similar fate for Luton, home base for easyJet, the rival that had chosen Airbus over Boeing.

Then came his showstopper. He could not fly a plane, he reminded them, and he could barely drive a car – in reality, of course, O'Leary drives a Mercedes – but he could certainly dance. And with that he started to jig on stage, kicking high with his hands by his side, shouting above the rising noise that the only reason the Irish drank so much was because there was ‘no sex in Ireland'. The standing ovation that followed was short but heartfelt. Once again, as he had done two years earlier in their darkest hour, O'Leary had made the Boeing workers feel good about being
raped. He was a saviour not a savage and, better still, a customer who could lead their fight against Airbus into Europe.

Ryanair's planes are the most basic that roll down the Renton production line, which moves at a constant two inches an hour. O'Leary will not compromise on safety, but everything else is up for grabs. The new Ryanair planes come with no window blinds, seats that do not recline and have no back pockets.

While O'Leary spoke at Boeing in October 2004 the production lines were temporarily halted, but the evidence of his European revolution was lined up in the 760,000-square-foot factory. On the far side of the factory floor stood a row of Boeing 737s, each near completion and each bearing the logo of a low-cost carrier – Virgin Express, Gol, the new low-cost carrier in Latin America, the familiar orange and white livery of Southwest Airlines, and Ryanair.

Southwest is still the biggest low-cost carrier in the world and continues to grow in the United States, but the inspiration for the new generation of airline entrepreneurs who have appeared across Europe and Asia is now Michael O'Leary, not Herb Kelleher. ‘About five years ago there was a change. Up until then every new airline wanted an introduction to Kelleher and asked us to arrange it,' says Boeing's Toby Bright. ‘Now they only want to see Michael. He's the one they want to emulate.'

Kelleher and Southwest were willing tutors, taking time to explain the low-cost industry and their own success to Boeing's new customers, just as they had with O'Leary twelve years earlier. O'Leary, though, is no Kelleher. He has no time for upstarts who want to pick his brains – ‘They can fuck off and do their own work' – and has no interest in being feted.

O'Leary is as unlikely a champion for Boeing as the airline manufacturer could have found. Boeing is a true corporate giant, a bureaucratic and political corporation which moves slowly and believes in its own greatness. It represents everything O'Leary has despised and ridiculed in the traditional airline network carriers like Lufthansa, Air France and British Airways. Boeing is too institutionally polite to be aggressive, too smooth to be foul-mouthed, too big to be hungry.

O'Leary is astonished by its culture and its passivity, but is prepared to fight its corner if his bravura helps him shave a few more dollars off the price of his next plane. In O'Leary's world the idea that a massive production facility should down tools for almost two hours just to hear him run through a tried and tested routine is beyond comprehension. Even more astonishing was his performance at the dinner that Boeing had laid on for O'Leary the previous night in one of Seattle's finest restaurants.

O'Leary was seated between Toby Bright and Carolyn Corvi and the conversation soon focused on the developing low-cost market in the Far East. Bright had been charged by Boeing with the task of reeling in Tony Fernandes, chief executive of AirAsia, who was about to place an order for up to a hundred new planes. As always, Boeing was in a head-to-head battle with Airbus, and it was a battle that it looked like losing.

O'Leary grew increasingly exasperated as Bright explained how the negotiations were going. ‘Just do the fucking deal,' he said. ‘Get on a plane to Hong Kong and don't leave Fernandes's side until he signs, and just undercut every Airbus offer. And tell him I said just fucking buy Boeing.'

Bright listened politely and then pulled out his BlackBerry and started tapping away at the keys. ‘What are you doing?' O'Leary asked.

‘I'm texting Fernandes,' said Bright.

O'Leary, who barely knows how to turn on a computer and refuses to use email because his inbox ‘just fills up with shite', rolled his eyes. ‘Gimme that,' he said, and proceeded to tap out a simple message: ‘Just buy fucking Boeing.'

For almost forty minutes Bright's BlackBerry maintained an inter-continental conversation with Fernandes, with messages alternating between O'Leary and the Boeing man. Four weeks later, Air Asia made its decision: it would be buying Airbus.

‘It was an unbelievable performance,' O'Leary said afterwards. ‘Boeing needed to do the deal, it needed to stop Airbus getting a bigger slice of the Asian market, but what did they do? Sent bloody text messages back and forth. Crazy, but that's Boeing. They're
being eaten alive by Airbus because Airbus know how to do a deal.'

O'Leary may fly only Boeing and he may tell the world that only gobshites fly anything else, but if Airbus came forward with a deal that slashed his costs, he would listen. ‘Ryanair will never fly two types of aircraft, but that's not to say we would never switch. It would take a few years to make a smooth changeover, but if it made sense we'd do it without hesitation,' he says.

Just before he left the Seattle airfield, O'Leary toured Boeing's private jet facility, admiring the 737s that had been converted into sixteen-seater planes for the uber-rich.

Instead of the non-reclining chairs and parsimonious interiors he was used to, each of these planes had walnut panelling, leather sofas, armchairs, a bedroom, bathroom and a bar. ‘It's great to see how the other half lives,' O'Leary said, as he marvelled at the luxury, blithely ignoring the fact that he was one of the very few who could easily afford the $70 million price tag and the annual running costs.

O'Leary then boarded his new Ryanair jet – complete with non-reclining seats – and set off for Dublin via Iceland, catching what sleep he could by stretching out in the centre aisle. He had paid to fly to Seattle but was not going to turn down a free trip home as a member of the delivery team. He was returning to a new political landscape: Seamus Brennan, the transport minister with whom he had managed a civil relationship, had been replaced in a cabinet reshuffle by Martin Cullen. Ireland, which had faded from O'Leary's view while Ryanair had expanded aggressively in Europe, was once again a market ripe for further exploitation. His difficulties with the new Dublin Airport Authority had yet to be resolved, but at least Brennan had started a process of change that might lead to better opportunities. Ireland's economy continued to boom, and O'Leary was fully aware how Aer Lingus had successfully launched almost forty routes from Ireland to continental Europe.

Events in Ireland were about to give him the impetus he required
to revisit that market with renewed ambition. EasyJet had already tweaked his tail by announcing routes from London to Ireland, a challenge that would be fought viciously, and now Aer Lingus was embroiled in a battle between management and government that could only play to his advantage. Willie Walsh, Aer Lingus's chief executive, was at war with Taoiseach Bertie Ahern about the airline's future, and O'Leary reckoned that no matter how it panned out, there was one certain winner from their disagreement.

By the end of 2004 Aer Lingus should have been moving smoothly towards privatization. The sale of the airline had been on the government's agenda, and off it again, from the moment Bertie Ahern had become taoiseach in 1997. There had been a number of false dawns and the whole process had been derailed by the 11 September terrorist attacks in 2001, but under the astute leadership of Willie Walsh Aer Lingus had returned to profitability, and its management was keen to take the next commercially logical step: free the airline from state ownership and give it the capacity to expand. Ahern, however, was not in a hurry, and Walsh was contemplating resignation as the year drew to a close. If he had harboured doubts about his impending decision, his copy of the
Irish Times
on Saturday 13 November 2004 would have banished them.