Tuesday 21 November 2017

It's been one of Ryanair's toughest weeks - can Michael O'Leary survive the storm?

It has been one of Ryanair's ­toughest weeks - with passengers angry about cancellations, and ­pilots ­rebelling over poor ­conditions. Can its outspoken boss Michael O'Leary survive the storm? Kim Bielenberg reports

Not a lavish spender: O’Leary says holidays with his wife and children ‘are a complete waste of time’ Photo: Niall Carson/PA
Not a lavish spender: O’Leary says holidays with his wife and children ‘are a complete waste of time’ Photo: Niall Carson/PA
Kim Bielenberg

Kim Bielenberg

Michael O'Leary flew into a crisis this week with the cancellation of hundreds of flights, a virtual mutiny by pilots, and volleys of complaints from angry customers.

So, it was hardly surprising in the middle of this corporate nightmare that some commentators pondered whether the garrulous Ryanair boss has finally had his "Gerald Ratner moment".

The jewellery tycoon Ratner has gone down in financial folklore as the king of the business blunder after he bad-mouthed his own products.

At a speech in the Albert Hall in 1991, he referred to earrings in his shops being 'cheaper than an M&S prawn sandwich but [they] probably won't last as long', and he boasted that he could sell a sherry decanter at such a low price 'because it's total crap'. His business promptly collapsed in value and had vanished by the following year.

As Ryanair reeled from a mounting crisis this week, and O'Leary made a bold attempt to appear apologetic, commentators were left wondering whether the airline had stretched the patience of its customers too far this time.

A monumental mistake in the airline over holiday rosters of pilots, as well as other troubles over staffing, led to the travel plans of over 300,000 passengers being affected, and an estimated 2,000 flights cancelled.

We knew things were bad when the British press started to refer to Ryanair passengers as "victims" rather than customers.

Having failed to get through to a live person on the airline phone lines, the "victims" went on to the Ryanair Facebook site to complain of "appalling" and "amateurish" service.

Against a somewhat inappropriate backdrop of a smiling family on a beach on their hols and an "Always getting better" banner, O'Leary appeared before the media to explain the "mess-up".

Even in the midst of this headline-grabbing maelstrom, O'Leary could not resist the colourful soundbite: "It's not my biggest cock-up. I have a litany of cock-ups in Ryanair over the past 25 years."

And although he made a stab at contrition, he said of the company's financial position: "I never give a rat's arse about the share price. I couldn't care less."

Jack Murray, CEO of brand agency All Good Tales, says Ryanair should be able to survive the crisis, but he believes O'Leary should have reacted differently.

"He needed to give a faster response and he should not have used language like that.

"He should have been more contrite, and given a clearer account of what the causes of the cancellations were."

Aviation commentators wondered if it was really all about holiday rosters, or whether the large scale defection of pilots, unhappy at the way they have been treated, also played a role.

Over the past three years under chief marketing officer Kenny Jacobs, the airline has gone out of its way to present a more touchy-feely image.

The change in approach, with O'Leary trying to retract his horns, proved to be effective. The airline boss suggested: "If I'd only known that being nice to customers was going to be so good for my business I would have done it years ago."

Blunt persona

But over just a few days this reputation has been shredded, and as the cancellations and the complaints mounted, the old image of shamelessly poor customer service came back into view.

Earlier in his career, O'Leary had used his barnstorming, no-holds-barred style to give his airline almost unlimited free publicity.

This blunt persona was resurrected over the past few days, as critics stomped all over his reputation. The British press, perhaps goaded by his vocal opposition to Brexit, was only too happy to slate him.

We were reminded of the aftermath of Iceland's volcanic ash cloud in 2010 when flights were grounded and Ryanair was initially reluctant to meet its obligations under EU regulations. Furious at the thought that Ryanair might have to compensate passengers for a situation beyond its control, O'Leary said: "You're not getting a refund, so f**k off. We don't want to hear your sob stories. What part of 'no refund' don't you understand?"

Before the supposedly cuddly Kenny Jacobs era was ushered in, O'Leary was happy to go against dictum that the customer is always right.

As he once said himself: "People say the customer is always right, but you know what? They're not. Sometimes they are wrong and need to be told so."

In the past he was even prepared to turn disrespect to customers into a marketing tool. All that mattered was that he got the message across that Ryanair was cheap.

"Anyone who thinks Ryanair flights are some sort of bastion of sanctity where you can contemplate your navel is wrong," he once said.

This culminated in his suggestion that the airline wanted to discourage customers from going to the toilet:

"We need fewer people going to the toilet. How do we do that? Charge them for it."

O'Leary claimed the airline was considering putting coin slots in the toilet door, before adding somewhat uncouthly: "If someone wanted to pay £5 to go to the toilet I would carry them myself. I would wipe their bums for a fiver."

Of course the plan to charge customers for spending a penny was never going to happen, but O'Leary could measure the publicity in yards.

He once summed up his earlier marketing philosophy and attitude to customers in the style of Johnny Rotten: "Shut up, sit down, we don't care, we have cheaper fares than anyone else, f**k off."

Since Jacobs was enlisted, he appeared to be successful in sanding off a few of O'Leary's rough edges.

But it appears that O'Leary has accumulated rather too many enemies over the years to have public figures leaping to his defence in his hour of need.

Travel agents were hardly likely to speak up for him since he has described them as "f***ers" who should be taken out and shot. He has regularly insulted politicians and Mary O'Rourke once admitted that he made her cry.

He has never concealed his contempt for pilots, tending to treat them as glorified bus drivers.

"I am not a cloud bunny, I am not an aerosexual,'' he said in an interview, before adding. "I don't like aeroplanes. I never wanted to be a pilot like those other platoons of goons who populate the air industry."

The pilots have seen Ryanair's difficulty as their opportunity, and a large pan-European group of them seized the moment to demand better contracts this week. In an article in The Guardian, former Ryanair pilot James Atkinson outlined the stresses and relatively poor conditions of pilots working for the airline.

Despite the comprehensive pasting suffered by O'Leary this week, and in many earlier episodes over the years, the airline enjoys bumper profits.

It recorded a profit of €1.24bn in the year to the end of March, and carries over 100 million passengers a year. So long as the airline is cheap and safe, travellers seem likely to continue buying tickets.

Aviation consultant Chris Tarry believes Ryanair can recover from the current crisis.

"There will be lessons to be learned from this, but I am sure the mistake will not be repeated, 98pc of passengers are unaffected.

Most profitable airline

"The airline has fundamentally changed the way we travel and it is probably the most profitable airline in the world."

Appointed chief executive in 1994, O'Leary has accumulated personal wealth estimated at over €1bn.

But apart from his string of horses, the owner of Gigginstown House near Mullingar is not considered a lavish spender, in his Gap shirt and cheap white trainers. He regards his holidays with his wife Anita and four children as "a complete waste of time".

Close observers of his career have noted that for a few years now he has regularly announced his retirement "in two or three years", but this has never materialised. And, based on past controversies, there is every chance that he will survive the current bout of turbulence, and come in to land safely.

@KimBielenberg

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