Michael O’Leary: the outrageous Irish airline entrepeneur

It seemed to come out of the blue, but no-one should really have been surprised by the audacity of Ryanair’s e1.48bn bid for Irish national carrier Aer Lingus, says The Independent. Michael O’Leary specialises in being outrageous.

He outrages customers requesting refunds because their granny has fallen ill: “You are not getting a refund, so fuck off”. He outraged Ryanair’s millionth customer by telling her that lifetime free flights did not cover a bank holiday weekend. He outraged a man with cerebral palsy by charging him £18 for the use of a wheelchair up to the plane. He even outraged his own mother – a devout Catholic – by dressing up as the Pope to launch a route to Rome.

Given that O’Leary, 45, has on occasions appeared as St Patrick, a French chambermaid and a Roman centurion, he certainly displayed “an uncharacteristic level of restraint” when announcing the bid, notes the FT – “expletives were noticeably absent”. Ryanair is one of Europe’s largest airlines, but O’Leary “still likes to act as if he is a rebel fighting the airline establishment”. Indeed, he sees rules “as only for the hard of thinking”, says The Observer.

He recently bought a taxi licence for his Mercedes and installed a meter, so he could legally zip down Dublin’s bus lanes. And while he prides himself on his chummy disposition – he regularly plays football with his pilots – he thinks nothing of screwing his staff into the ground. Ryanair crew pay for their own training, uniform and pens. They are not allowed to use the firm’s electricity to charge their phones.

Michael O’Leary: the road to Ryanair

Central to the airline’s marketing is O’Leary’s self-portrayal as a man of the people – or, as he puts it, a “jumped-up Paddy”, says The Guardian.
In fact, he attended an exclusive Jesuit school, studied at Trinity College Dublin and trained as an accountant at KPMG, although he left before qualifying.

O’Leary grew up on a series of farms, moving in line with the vagaries of his father’s enterprises. O’Leary Senior was an entrepreneurial chancer who dabbled in everything from rabbit breeding to textiles with mixed results. His son spent his early career similarly “ducking and diving”, but his specialism was tax consultancy. An early client was Tony Ryan, who had started Ryanair in 1985. O’Leary claims his initial advice was to shut down the loss-making business, but in 1990 he agreed to become chief executive in return for a 25% stake.

“The road to Damascus”, says O’Leary, was his trip to Texas to check out Southwest Airlines, the legendary no-frills operation built by Herb Kelleher. He soon plagiarised the model: low fares, quick turnarounds, a fleet of Boeing 737s and deals with “secondary” airports – adding touches of his own. Notably, belligerence when dealing with competitors (“expensive bastards”), airport authorities (“overcharging rapists”) and the EC (“morons”), together with an obsessive desire to cut costs – even sick bags have been chucked. Apart from a blip in 2004, the airline has proved a reliable “growth and profits machine”, says The Sunday Times. But many take O’Leary’s recent marriage and new baby as a sign that he is mellowing; last year, there were even reports he might quit. In a maturing business, “you have to know when the entrepreneurial gobshite has to go”, he told The Observer. But charges of mellowing bring a derisive howl. “Absolutely not. The meek may inherit the earth, but they won’t have it for long.”

Ryanair’s bid for Aer Lingus

Michael O’Leary is a “stunt pilot whose enemies would love to see him crash”, says The Guardian. His bid to take over Aer Lingus may be “a stunt too far”. Ireland’s transport minister has accused him of “trying to create a monopoly”, the unions are up in arms and it’s hard to see the European competition authorities smiling on a deal that would give him a de-facto monopoly on flights into Dublin. O’Leary has a history of acrimonious relations with the Irish government, which retained a 28% stake in Aer Lingus when it floated a fortnight ago; Aer Lingus workers have another 13%, notes Breakingviews.com. It’s unlikely either group will take kindly to the “big raspberry” O’Leary is blowing in their faces.
 
The odds certainly seemed stacked against success, says the FT. This would be Ryanair’s first major takeover. But that “doesn’t mean there’s no method in O’Leary’s madness”, says Dominic O’Connell in The Sunday Times. With a 20% stake of Aer Lingus in the bag, he has several options open to him. Having bought the shares at a discount, he could simply hold on in the likelihood of making “a tidy profit” – much as Iceland’s FL Group did at Easyjet last year.

Meanwhile, he’ll have racked up a few more headlines for Ryanair and “reinforced his reputation as a maverick unafraid of roughing up the government and unions”. There are risks, though: if Aer Lingus shares fall, O’Leary’s loyal US fund managers “will be furious”. Moreover, entangling with the national flag carrier might well mean a loss of focus on costs and fares. Time will tell if the gamble pays off. For the moment, “it’s all to play for”.