The highs and lows of O’Leary

The Government’s airport tax has given the Ryanair chief executive yet another headache, writes Niamh Hennessy.

WHEN you’re scheduled to meet Michael O’Leary at 3pm you don’t want to be late. But I didn’t bank on 15,000 pensioners taking to the streets of Dublin at the same time I was due to make my way to Ryanair’s head office.

Stressed, I listened to Joe Duffy talking to the protesters about the medical card issue.

“You know that fella Michael O’Leary, he pays millions in taxes every year, he should be entitled to a medical card too,” said one caller.

I said this to Michael when I arrived — on time.

“I don’t want a medical card,” he said harshly. “What would I want with one of them. I don’t want children’s allowance either but I still get it. That’s what’s all wrong with this country. Why are they giving me children’s allowance?”

O’Leary is slightly stressed too. He is not liking a lot of things at the moment.

He really doesn’t like the Government’s decision to impose a €10 ticket tax on air travellers; he thinks the budget was unimaginative and spineless; and he’s just lost €350 million as a result of Ryanair’s falling share price.

But does he care about this loss of fortune? He shakes his head.

“Nah, I’m not selling them, so it means nothing to me. I’ll only lose if I decided to sell,” he tells me, adding that Ryanair’s share price is going to surge again, so it’s irrelevant.

And if he did make a loss on these shares I wonder if he would consider moving his tax base from Ireland, following in the footsteps of the likes of Denis O’Brien and Dermot Desmond to Malta and Gibraltar.

“I’d never say never, but I hope that I won’t have to,” he said.

The Government’s decision to impose an air ticket tax means Shannon Airport is doomed, according to the airline chief.

Ryanair is set to account for 60% of Shannon’s traffic this year but O’Leary said come next year Ryanair is going to cut the number of aircraft based at Shannon from four to one, which will result in the loss of 100 jobs and a reduction in passengers at the airport from two million to 750,000.

“You will see tumbleweed rolling across the ground at Shannon,” he said.

“This travel tax has been badly thought out and the Government will effectively be responsible for closing Shannon Airport.”

The news is also not good for Cork Airport.

Ryanair won’t be announcing any new routes at the airport unless Cork stops reducing the discounts the airline receives.

But he does admit the Cork to Dublin route is performing very well and he may even consider increasing the frequency on the route, which operates five times daily.

O’Leary also doesn’t see the point of Cork’s new €220m terminal.

“We asked Cork Airport for the use of their old terminal and they said no. We didn’t ask them to build the new terminal, so why do we have to pay for it.”

Ireland accounts for a mere 15% of Ryanair’s overall traffic and O’Leary will have no problem in pulling routes from the Irish airports if they don’t play ball with him.

“I have airports from all across Europe ringing me every day who will happily take more Ryanair flights,” he said.

“The problem with Irish airports is that they want low air fares to fall into their laps.”

But when it comes to all things Irish O’Leary has made no secret of the fact that he would love to acquire Aer Lingus, although the EU has decided to block the proposed takeover.

“It makes sense for it to stay in Irish hands. Somebody is going to eventually buy Aer Lingus,” he said.

How about Aer Arann?

“I wouldn’t take a present of Aer Arann,” he admits.

For the moment O’Leary is concentrating on getting the most from Ryanair.

“We are hoping to have mobile phone use on the planes any day now. After that we’ll look at introducing in-flight satellite TV or on-flight gambling.”

Earlier on in the year Ryanair got a lot of stick for not hedging on oil. It’s not often O’Leary makes mistakes and he shakes his head furiously when I put it to him that was his worst to date.

“Looking back it was stupid not to hedge on oil but we’re not hedged for the remainder of the year and that’s a good move,” he said.

Earlier in the year there were contrasting reports about Ryanair being interested in buying Stansted Airport in Essex. I ask him to clear up the confusion.

“There is no confusion. We don’t need an airport. We’re not in the business of running airports; let that to someone else.”

Given that O’Leary has so much to say about politics and how the country should be run I ask him if he’d ever consider running for election.

“No, never. Nobody would elect me.”

And there for the first time I get a glimpse of a softer side behind the hard exterior.

“Politics is telling people what they want to hear and it’s the opposite in business.”

Looking five years ahead O’Leary would like to see the British Airports Authority broken up, the Dublin Airport Authority broken up, Ryanair to be carrying 100 million passengers a year and making annual profits of €800m. He also thinks Ryanair’s share price will be €15 a share (it’s currently a little more than €2).

And when he does leave Ryanair — which, by the sounds of things, won’t be any time soon — how will he spend his days?

“Relaxing at my ranch in Mullingar, sipping pina coladas and getting abuse from my kids.”


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