Lunch With the FT: 52 Classic Interviews (15 page)

18 DECEMBER 2009

The controversy-courting, cost-cutting chief executive of Ryanair does not want to eat in a fine Dublin restaurant. He prefers a pre-packed bagel and a ‘menacing’ chicken salad in his office at the city’s airport

By Pilita Clark

Here,’ says Michael O’Leary, shoving something the size of a small grapefruit wrapped in red and white cardboard over the table in his office at Dublin airport. ‘Lunch.’

There is an awkward silence.

You do not expect a banquet from a budget airline boss who has threatened to make his passengers pay to use the toilet.

And you do not want to upset a man who calls regulators ‘rapists’, rivals ‘arseholes’, and advises customers wanting a refund to ‘f*** off’.

But what exactly has he given me here? Eventually, I make out the words on the wrapper and blurt, ‘Oh! A bagel!’

‘It’s got pesto,’ says O’Leary. ‘It was either that or McDonald’s. I figured you for a bagel girl.’

For himself, he has procured a grim-looking chicken salad, entombed in thick plastic, also from somewhere in the airport down the road. An aide arrives with two takeaway coffees. So begins lunch with one of the world’s best-known, least-loved and more improbable airline chief executives.

I had tried to persuade O’Leary’s press officer that lunch in the office
would be dull. Surely there was a restaurant he liked in Dublin? No. Lunch with the chief executive of Ryanair would be a Ryanair lunch: at the desk, just your basics, all expenses spared.

In the world of aviation, Ryanair is a phenomenon, a no-frills behemoth that has grown from a tiny operation which, in 1985, used to fly 5,000 passengers a year between Ireland and London in a single plane so small that, according to the company, its cabin crew had to be no taller than 5ft 2in. Since he took over in 1994 O’Leary has relentlessly expanded, with 200 aircraft flying more than 60m passengers a year to 150 European destinations, from the Canary Islands to Constanta in eastern Romania.

Recession has sent bigger, older airlines around the world hurtling into the red. Yet Ryanair has fared much better, coupling average fares of just €32 with a ruthless drive to cut costs and push up revenues by charging for everything from checking in online to buying a cup of coffee on board.

In the middle of this year Ryanair had the highest market value of any airline in the world, after Singapore Airlines. On the day we meet, it is getting ready to announce another quarterly profit and expects to make at least €200m this year.

None of this is evident from Ryanair’s Dublin airport headquarters. Plastic sacks of wastepaper are piled at the entrance. Boxes are stacked up in corridors inside. The paintwork is scruffy, the carpet tired.

The open-plan office feels barely as wide as one of Ryanair’s Boeing jets, and nearly as cramped. There is a single aisle dividing tightly packed teams of surprisingly young-looking workers into departments such as marketing, sales and planning.

It looks less like one of the airline industry’s financial success stories and more like a scene from the television comedy
The Office
. Except the workers in
The Office
have bigger desks. And down at the end, peering out from behind the glass walls of his own modest office, is O’Leary.

Wearing jeans, open-necked checked shirt and sneakers, he looks a bit tired and pale up close. This could be because he and his wife Anita Farrell, a former banker, have three children under the age of eight. Or because he seems in a permanent state of exasperation with an endless number of irritants, including his own staff.

As I try to prise off the worryingly sturdy wrapper on the bagel, he
says there are two ‘great things’ about lunchtime in an out-of-the-way office like Ryanair’s. ‘One, there’s nowhere to go and eat,’ and two, the only time staff are allowed to use the internet for personal reasons is between five past one and five to two. ‘So they all tend to stay at their desks at lunch hour!’

The staff get another pasting as he moves on to talk about management consultants (‘should all be euthanized’) and MBAs (‘bullshit’). ‘MBA students come out with, “The customer’s always right,” ’ he says, adopting a whiny voice. ‘Horseshit! The customer’s usually wrong! And, “My staff is my most important asset.” Bullshit! Staff is usually your biggest cost!’

It is hard to say how serious he is about this. Ryanair did once say it had issued a memo banning employees from charging their mobile phones at work to save on electricity bills. But this always sounded like another PR prank by O’Leary, whose flair for using the media is boundless.

Airline entrepreneurs have often revealed a talent for doing their own PR. Richard Branson flew in a hot air balloon for Virgin Atlantic. Stelios Haji-Ioannou wore orange jumpsuits for EasyJet. But O’Leary takes the practice to new heights.

It is not just his willingness to dress up as the Pope to publicize a new route to Rome. Or his (so far unrealized) threat to charge passengers to use the lavatory. It is the sheer savagery of his blasts that make him stand out on the featureless plains of modern corporate life.

For 20 bracing minutes, he runs through a list of his more egregious enemies. There are the ‘cretins’ and ‘twerps’ in the Civil Aviation Authority, the British body that regulates the ‘bloody evil empire’ of BAA, the airport operator whose London monopoly was recently broken up, after prodding from O’Leary, who had griped incessantly about its charges.

There is the ‘big bloody supertanker’ of Boeing, the US aircraft maker that O’Leary has been badgering for months to sell him 200 new jets at recessionary prices. And there is, visible right outside his office window, one of his most hated foes: Aer Lingus, the struggling Irish flag carrier for which O’Leary has made two thwarted bids in the past three years. ‘There it is,’ he hoots, jumping up out of his chair to point out a large squat building facing away from his own. ‘The gulag!’ He would clearly like to make a third offer for Aer Lingus, but knows this would mean
trouble with its ‘bunch of bearded, sandal-wearing union bosses’, not to mention Ireland’s ‘utterly useless’ politicians.

And then there is that other source of endless aggravation, Ryanair’s passengers. Especially the ones wrecking his efforts to shave luggage-handling costs by checking in their cases (for an extra £30) because they are ‘too mentally bloody lazy to travel with carry-on bags’.

Surely he doesn’t seriously expect anyone to go on a three-week holiday with just a carry-on?

‘Oh, for God’s sake, of course you can for three weeks,’ he says.

‘I can’t.’

‘You can.’

‘I don’t want to.’

He stares at me, then admits his wife feels the same way.

‘My wife goes away on holidays for a couple of weeks, and she wears bikinis and a few flip-flops, but she needs her 40 pairs of shoes,’ he says theatrically. ‘What do you need 40 pairs of shoes for?’

So, who exactly is the ideal Ryanair passenger?

‘Our ideal passenger is someone with a pulse and a credit card, who will follow the simple instructions to lower our costs to the maximum.’

By this point, hunger is driving me to make a fresh attempt on the bagel wrapper. Off it comes, and there sits a sad-looking bagel containing a pile of pesto, tomato and cucumber. I start picking at it. O’Leary’s salad sits menacingly on his desk, untouched.

This is a typical lunch for him, he says, when he isn’t at the gym.

What does he like to do in the gym?

‘Look up and down a slim girl’s rear,’ he says. ‘Sadly there’s not that many of them. They’re a bunch of old sweaty farts.’

Though greying a little, O’Leary is, at 48, not that old. Before he became a loud-mouthed chief executive, he was a tax accountant, before that a businessman’s son, expensively educated at some of Ireland’s best schools. According to one newspaper’s estimate he is worth more than £300m, partly thanks to a 4 per cent stake in Ryanair. But for years now, he has been saying he will retire ‘in two or three years’. So what is it today?

‘Three years,’ he says, suddenly trying to look serious. By then it will be time to ‘Tesco-ize Ryanair’, by which he means time to ditch him for someone more suitable for a larger, more sedate operation.

‘In certain respects I am our best salesman,’ he says, explaining the
‘pantomime villain character’ he plays for the airline is done purely for the free publicity (the net spend on advertising last year was €5m, he says, not much for an airline Ryanair’s size). ‘But I’m also negative in that a lot of my antics detract from the fact that Ryanair has the youngest fleet of aircraft, the best punctuality record, delivers a terrific customer service.

‘I think you need me for the rapid growth and for the in-cost reduction initiatives, but once they’re all done you then need to hand over to somebody who’s a bit more respectful of politicians and bureaucrats, talks about caring about the environment and old people and f***ing jungles and fish in the sea and all that shite.’

Goodness knows what O’Leary will do if he ever retires. He claims to have no interest in holidays. ‘I go to the Algarve with the family for two weeks, because I have to. And I can build the sandcastles with the children. You know, the sandcastle’s fine for the first five minutes, and after that it’s, “Oh Jesus, will someone come and rescue me!” I’m praying for a crisis.’

What about close friends? ‘My wife, occasionally. My children on a good day.’

He hates the theatre. Only sees films when dragged by his wife, ‘just for marriage maintenance reasons’. His main interests, apart from Ryanair, consist of farming, football and racehorses, of which he has a few including one called War of Attrition, which won the Cheltenham Gold Cup in 2006. I had always assumed this was an O’Leary-esque joke at a rival’s expense – Aer Lingus, perhaps – but he says the animal had the name when he bought it.

There is a strange lack of sophistication about O’Leary. His success has made him one of the industry’s most prominent airline chiefs, his name constantly on the lips of his peers, his business model aped around the world. Willie Walsh, a fellow Irishman and the chief executive of British Airways, once told me, only half joking, that O’Leary’s success had even driven other airline executives to copy his dress sense: ‘You get these CEOs who, because O’Leary doesn’t wear a tie or a suit, feel that to have any sort of respect, you can’t wear a tie.’

Yet his world-view has curious gaps. At one point, I ask him what he thinks of other well-known figures in his industry. Stelios? ‘A rich kid
who got off his arse.’ Richard Branson? ‘A genius in the way he has made a fortune out of the Virgin brand, but he doesn’t add up to much.’ But, when asked about Tony Tyler, chief executive at Cathay Pacific, one of Asia’s biggest airlines, he looks blank. ‘Never heard of him,’ he says. ‘Anyone in the airline industry outside of Europe, I wouldn’t know who the hell they are.’

There is also something rather quaint about him. He doesn’t have a BlackBerry, there is no computer on his desk. He even claims not to have an email address. ‘Email is rubbish. If there’s something important, I’ll send a fax, or we’ll speak.’

Each day a team compiles two reports on paper for him, one for sales, one for punctuality, which give an instant overview of how the business is performing. He gets up and grabs a sheet showing the day’s bookings, the month’s sales, next month’s sales, available seats, how it all compares with the same month last year, and so on. ‘Business should be simple,’ he beams.

Lack of email does not stop him being an enthusiastic correspondent. When UK advertising standards authorities chided him for claiming Ryanair’s flights were faster than the Eurostar train, he sent them a copy of
Everyday Maths for
Dummies
. Journalists who write about him sometimes get an unsolicited, though frequently charming, missive. A colleague on the
FT
who wrote a column comparing Ryanair to Aeroflot received a two-page letter along with the latest ‘Girls of Ryanair’ calendar, featuring bikini-clad photos of Miss Check-In and Miss Fuel Pump, a regular production that O’Leary insists uses only company cabin crew.

The admiration is reciprocated, at least in the financial media. On a cabinet in a corner of his office is a dusty collection of awards sent by the likes of
Barron’s
, the financial magazine that has named him one of the ‘world’s most respected CEOs’ ever since it started handing out
the award in 2005. ‘Barf!’ says O’Leary, looking embarrassed, when asked about the prizes.

His constant obsession with cost-cutting, however, not to mention his foul mouth, has also spawned less adulatory attention, such as the website
www.ihateryanair.co.uk
, dedicated to what it calls ‘the world’s most hated airline’.

Before today, I say, every person I spoke to and said I was having lunch with Michael O’Leary reacted with horror or pity. Doesn’t he find it wearying to be such a hate figure? ‘It would be wearying if you weren’t growing by 9m passengers a year,’ he says. We know, fundamentally, that we have huge public support.’

Outside, the light is fading. My flight home is getting near. My bagel is still there, still half eaten. O’Leary’s salad still sits on his desk.

A few days later, I get a letter from O’Leary, thanking me for taking the time to come to Dublin to see him and hoping I enjoyed my ‘five-star gourmet lunch’. By the way, he adds: ‘I forgot to charge you for the coffee, so you owe me one.’