Business Irish

Friday 23 August 2019

Visionary whose passion for business took off

IN HIS 71 years on this earth, Dr Tony Ryan made a fortune, lost it and then went on to make an even bigger one.

Along the way he revolutionised air travel and also found time to sit on the board of Bank of Ireland, act as Ireland's honorary consul to Mexico, renovate a stately home in Co Kildare and breed horses in Kentucky.

And in his later years, he embarked on new airline ventures in Singapore and Mexico, as well as founding the Tony Ryan Academy for Entrepreneurship Academy.

His was an extraordinary life that sprung from the most ordinary beginnings.

Born on February 20, 1936, Tony Ryan began life as the son of a Tipperary train driver. At 16 he parted company with formal education and went to join Aer Lingus. Dr Ryan spent a low-key 20 years at the then national carrier, working his way up to middle management.

In 1995, the duckling became a swan. Having spent years leasing planes for Aer Lingus, Ryan went to his bosses and asked them to support his plans for an aircraft-leasing venture. Aer Lingus, along with merchant-bank Guinness Peat, ultimately agreed to stump up 90pc of the starting capital for Ryan's project, Guinness Peat Aviation (GPA), while Dr Ryan put £5,000 of his own money on the table.

Based in the tax haven of Shannon, Ryan used his ability to outsmart the markets to quickly build up what was the outstanding Irish business story of its day.

Some men would have been consumed by the company's growth, but within five years Ryan was on the look out for a new venture, saying he wanted his three sons to have a business to develop.

Aviation was his forte, and in June 1980 the Tipperary man drew up plans for a Shannon-based airline, provisionally dubbed Irelandia. The initial plans, which included long haul flights to America, failed to get off the ground. But by early 1985 Ryan had come up with a workable idea for an airline, renamed Ryanair, and he was awarded a licence to run flights from Waterford to London's Gatwick.

Ryan's vision was for an airline that made flying affordable, an unheard of concept in an Ireland where a return flight to London cost far more than the average weekly wage. Given Aer Lingus's near-monopoly setting up an airline at that time took remarkable gusto.

In May 1985, Ryanair's first plane took to the skies under the ownership of Ryan's sons, Cathal, Declan, and Shane. The launch was like Ryan himself -- triumphant and larger than life.

The venture, however, was not to replicate GPA's overnight success.

Dr Ryan was inherently adverse to attaching his family name to anything that looked "cheap". So while Ryanair's prices were lower than Aer Lingus', Ryanair's costs and services levels were much the same.

The result was a not inconsiderable gap between income and expenditure, and debts of millions of pounds continued to mount even after the young Michael O'Leary joined Ryan's team of advisers back in 1988.

Luckily for Ryan, while Ryanair languished, GPA went from strength to strength.

By the early 1990s, Ryan's company had become the world's largest aircraft leasing company with a turnover of more than $4bn.

GPA's phenomenal growth was all the more impressive because it was achieved at a time when the rest of Ireland was wallowing in the economic depression of the 1980s.

Ryan's baby was hailed as a shining beacon in an economic wasteland, and Ryan was duly feted with his appointment as Mexico's honorary consul in 1991 and an honorary doctorate from the University of Limerick in 1992.

So impressive was GPA that in 1992 Ryan decided to float the company citing a value in the region of $2bn.

And then the dream turned sour.

Gulf-War-prompted turmoil in aviation markets and last-minute wranglings over the share price were all it took to bring the GPA flotation crashing to the ground. Some said it was Ryan's greed that sent the venture south; others said it was his blind belief that he would never fail.

Dr Ryan emerged from the wreckage owing $35m to merchant bankers Merrill Lynch.

During his decades of business fortune, Ryan had been a spender not a saver, and if Merrills had demanded the debt's full payment, Ryan would have faced financial ruin. Fortunately, a deal kept the wolf from the door, while Ryan retreated to his second home in Monaco to contemplate his future.

It was Ryanair, Ryan's one-time financial black hole, which was to prove his salvation. O'Leary took the helm at the airline in 1994, and three years of disciplined cost cuts allowed the carrier to plot a course for flotation in 1997.

This time the float went off without a hitch, and two years later the Ryan family picked up almost £140m for the sale of part of their stake.

In the years that followed, Ryanair's growth trumped even that of GPA.

The airline that bears Ryan's name is now the world's biggest international carrier.

Ryan took a back seat in Ryanair in his later years, leaving the airline's running to its executive team and the incorrigible O'Leary.

Business remained Ryan's lifeblood and in the last decade he has been behind the start up of Singapore's low cost carrier Tiger Airways along with Mexico's low cost airline Vivo Aerobus as well as venturing into non-aviation areas like horse breeding.

As he said, at age 62, when asked about his enduring passion for the rough and tumble of business: "One is dead long enough.

"My father used to say that it it better to wear away than to rust away."

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