'I'm very rich. I'm very successful. And I fly Ryanair all the time'
Where better for Ryanair boss Michael O'Leary to court business travellers than a lunch at the Institute of Directors, writes John Mulligan
Published 19/09/2015 | 02:30
'What am I doing here at the Institute of Directors?" Ryanair chief executive Michael O'Leary quipped yesterday at the organisation's autumn luncheon.
He said he wanted to dispel the myth that anyone who's successful and rich doesn't fly Ryanair.
"I'm very rich. I'm very successful. And I fly Ryanair all the time," he said, as he tried to persuade his well-heeled audience to switch their business loyalty to the carrier.
But there is a point here. This week, Mr O'Leary predicted that Ryanair will be carrying one in every four air travellers in Europe over the next eight to 10 years. It currently has a 14pc share, and will carry about 104 million passengers in its current financial year, which ends next March.
Ryanair's aim is to carry 160m passengers a year by 2024 as its fleet size increases to 520 aircraft from its current 315.
Its decision to transform its customer service, as well as altering its strategy to target more growth at primary airports, is a function of ensuring it stays ahead of competition and attracts enough passengers to fill that growing fleet.
But pushing down fares will remain a key element of its business model, according to Mr O'Leary.
"We should have 104 million passengers this year, 114 million the year after," he said. "We can only do that if we maintain our dedication, our obsession, our passion for low prices. That is our objective."
He said Ryanair just wants to get bigger and bigger.
"Bigger means you can buy more aircraft cheaper. Bigger means you generate more cash and by generating more cash you pay down more debt and all that allows us to lower our costs."
"The average fare in Ryanair last year was €45," he added. "We a plan in the next five years to take that average fare down to about €25. We may not get there, but at least we're determined to keep driving down the cost of travelling to make it more affordable."
Ryanair has consistently lauded the self-proclaimed success of its 'Always Getting Better' campaign, which saw it usher in a new era of customer focus at an airline that paid only lip service - if even that - to it previously. It has also revamped the types of tickets it sells, toned down its interiors, and cut many of the fees that incensed passengers - all in an effort to boost growth.
And it appears to be working. Only last week, Ryanair said that it expects to make profits of between €1.17bn and €1.22bn in the current financial year. That compares to a previously guided range of between €940m and €970m, making for a 25pc increase.
Mr O'Leary has also said he wants to take on intermediaries such as Trip Advisor. "In a couple of years Trip Advisor is going to be on Ryanair (website)," he predicted. "All these price comparison websites are going to be on Ryanair. All the hotel info is going to be on Ryanair. Everything to do with your travel is going to be on Ryanair.com because we've got the only bit that you can't, thankfully, disintermediate - air travel."
Mr O'Leary said that Ryanair's business plus product, which for a fee, gives all the services that someone travelling on business wants should be enough.
"I don't want to be stuck in a business lounge like some Palestinian refugee with all other Palestinian refugees waiting for my delayed flight to take off," he said.
But will business travellers shift allegiance to Ryanair? The airline claims that even before its push to sell to the business community, that something like 25pc of its passengers were flying on business anyway. It's been adding more frequencies to key cities in an effort to persuade corporate travellers to fly with it.
And you can be certain that Mr O'Leary will keep trying to hit that 160 million passenger mark.
"Every time you're flying with Ryanair, you're adding to my share price, you're adding to my profitability. I need to keep being wealthy," he said, "because if I'm to support one of Ireland's biggest loss-making cattle breeding operations, and of Ireland's biggest loss-making national stud horse operation, I need everyone in this room to fly Ryanair."