Business Irish

Sunday 23 July 2017

The Interview: Michael O'Leary

A man who never fails to shock thinks of airline's future as his own career there begins its descent, writes John Mulligan

Michael O'Leary is synonymous with photo opportunities such as reclining in an aircraft engine
Michael O'Leary is synonymous with photo opportunities such as reclining in an aircraft engine

It's hardly a surprise to anyone that Michael O'Leary has an opinion on just about everything.

Politicians, semi-state companies, banks and civil servants all come in for the usual drubbing over the course of an hour ensconced with the Ryanair CEO in the basement of a Dublin coffee shop on a chilly Tuesday afternoon.

Mr O'Leary doesn't do nostalgia and rarely reminiscences except to make a point. And, as he approaches 50 and nears the end of his career in Ryanair, little has changed on that front.

The airline boss has spent the guts of his working career transforming the travel market across Europe and spurring copycat airlines around the world. Love him or loathe him -- and he garners both in equal measure -- it's impossible to deny the impact Mr O'Leary has had on Irish business life.

He insists, however, that he's almost ready to hang up his spurs and move on from Ryanair, which celebrates 25 years in business this year.

"I know I say it repeatedly, but I do think I'll be gone in two or three years," he says.

"Ryanair needs to change now. It's going to become a different airline. I think the focus will need to change and that's not credible under me."

Mr O'Leary has been chief executive of Ryanair since 1994 and is proudest of the fact, he says, that he and his team managed to built an international success story in Ireland.

He likens the airline to global retail giant Tesco, whose initial 'pile 'em high and sell 'em cheap' strategy morphed into a more measured, rounded offering, with cheap goods that aren't necessarily always the cheapest, and good service.

Tesco's long-time chief executive, Terry Leahy, is also handing over the reins next March after nearly 15 years on the job. "That's the next real challenge for us," he adds. "It's fine to be Robin Hood and the young Turks and all the rest of it, but you want to hand it over in a way that the next group can take it and change it."

Even the 'always cheapest' ethos could be remoulded at Ryanair, he thinks.

"Ultimately, I think that 99pc of people still want the cheapest fare, but there's no reason why our average price should be 50pc cheaper than anybody else," explains Mr O'Leary.

"I think it could easily be 25pc cheaper than everybody else, but that means a different kind of sales mission and a different kind of culture. With me, it's been far too much along the lines of: 'It's cheap, if you don't like it, f**k off because somebody else will take your seat.'

"That works," he continues, "but over time that's not sustainable ad infinitum. You need to change the model. It's cheap, we're price-competitive but we're not always the cheapest -- that's the way you've got to go."

He says there are five or six internal candidates who could take on the chief executive role, but that an external appointment shouldn't be ruled out. He also reiterates that he has absolutely no intention of remaining on in a non-executive role once he departs.

"Otherwise you're just like some bad smell. You hope you hand it on to the right management team with enough get-up-and-go to drive it forward, but if you don't, fine, you f**ked up."

Offers to sit on other company boards when he leaves (and there have been plenty offered and refused in the past) will continue to be rebuffed.

"I don't think I'm that kind of muppet, somebody who'll sit and potter on a board. I am by nature kind of radical. I am by nature revolutionary and I don't think I would fit very well into boards," he says.

It's hard to imagine Mr O'Leary, who lives in Gigginstown House in Mullingar, Co Westmeath, sitting on his hands after he leaves Ryanair though, and he agrees that he'll have to find a way to remain occupied that goes beyond his passion for horse racing and cattle breeding. "Partly, I'd like to do something else at some time because the kids are growing up," he explains.

"I would like them to see that their old man is working at something. If you were some kind of rich waster playing golf and going to race meetings in the middle of the week, it sends out the wrong impression to the kids that they don't need to work for a living.

"I would hope that once I'm gone out of Ryanair that whatever I do the focus will be on setting an example for the kids, and not doing something stupid. But, there but for the grace of God go any of us. I'm no genius and I'm as prone to stupidity as the next guy."

Some unfinished business at Ryanair includes the two failed takeover attempts of Aer Lingus, something that still smarts with Mr O'Leary, who finds it impossible to fathom that the hostile approaches were repelled, despite assurances given to the Government that Ryanair would expand Aer Lingus operations and secure its valuable slots at Heathrow.

"Never underestimate the amount of animosity towards me and Ryanair, particularly among the politicians, the civil servants and the f***king chattering classes, whom I would be equally contemptuous of."

He thinks the Government's 25pc stake in Aer Lingus will be one of the first state-owned assets to be put up for sale as semi-state companies are offloaded to plug the gaping budget deficit.

But despite the state of the economy, he's surprisingly optimistic for the country and believes Ireland will be a much better place to do business.

"It will be immeasurably better," he stresses. "I think we'll see real reform in this country over the next five years under the IMF. I think you'll see an awful lot of the vested interests broken up -- partnership, and the power of the public sector trade unions will simply be destroyed, which is what should happen. I think Ireland will be a much more open and much more competitive economy."

And where will he be five, 10 or 15 years from now?

"You could get run over by a bus or get cancer in two years' time and what the f**k is the plan then?

"I think I'd be sh**e at running any other business unless I could devote 100pc of my time to it, but that's not going to emerge until I get the hell out of Ryanair."

Irish Independent

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