Monday Interview: Michael O’Leary, Ryanair

Michael OLeary put Ryanair first in line to take over slots to be vacated by Little Red. Picture: Greg Macvean

Efforts to woo more passengers by introducing allocated seating, flexible tickets and revamping its website saw the budget airline recently raise its full-year profit guidance, and more details on the outlook should emerge with next month’s interim results.

“As I say somewhat tongue in cheek, if I’d known that being nicer to customers was going to work so well on the business side, I’d have been nicer to customers years ago,” says O’Leary on a, er, flying visit to Edinburgh.

Coming from the man who once said travellers who forgot to print their own boarding cards deserved to be charged €60 (£47) “for being so stupid”, this might appear to be a dramatic change of heart. But O’Leary can’t avoid a bit of straight talking as he assesses how Scotland’s biggest city, Glasgow, stands to gain from hosting this year’s Commonwealth Games.

As well-heeled tourists and business folk take morning tea in the capital’s Balmoral Hotel, O’Leary observes: “Edinburgh’s always had a very positive international image, but Glasgow’s had a sh*t image – unemployment, rioting football supporters or closing dockyards. All of a sudden you see a new Glasgow during the Games; new architecture, new facilities and a confidence there that’s really putting Glasgow on the map.”

O’Leary was in town to take part in an Edinburgh Chamber of Commerce breakfast event, held the morning after Virgin Atlantic announced that it was pulling the plug on its Little Red domestic offshoot, which only launched last year. Services from Heathrow to Aberdeen and Edinburgh will end in September, but Ryanair was quick to capitalise on its rival’s demise – “no more Virgins in Scotland”, O’Leary says.

He adds: “I talked to Edinburgh Airport last night and we’re going to increase our frequencies from three flights daily to five flights daily in the autumn of 2015. This is an immediate response to Little Red stopping their flights, which means we’ll keep the capacity up and the prices down.”

Ryanair will not be going to Heathrow, instead choosing to serve London Stansted from Edinburgh and Glasgow International when the routes start towards the end of this month. Asked whether the Dublin-based carrier would be making a return to Aberdeen, O’Leary says it would “love” to get back to the Granite City, having pulled out in 2011 amid a row over costs with airport owner BAA – now called Heathrow Airport Holdings (HAH).

Aberdeen, along with Glasgow and Southampton, has been put up for sale by HAH, which has already sold off Edinburgh, Gatwick and Stansted. Ferrovial, the Spanish infrastructure firm that has a 25 per cent stake in HAH, is said to have teamed up with Australian bank Macquarie and Singapore’s sovereign wealth fund on £1 billion bid for the assets.

O’Leary, who describes himself as a former “boring” accountant with big four firm KPMG, says: “One of the great developments in the Scottish aviation sector has been the fact that Edinburgh Airport was sold, new management put in place, and all of a sudden there’s a group of people who really want to grow traffic and routes.

“Whereas BAA in the past never gave a sh*t. They didn’t have any decision-making powers, and they had to refer to someone down in London.”

Selling Aberdeen, he believes, could “only improve” the airport’s standing, although it could do with more direct services and air passenger duty (APD) remains a fly in the ointment.

“At £13, it’s a penal tax when to grow traffic you need fares of £20 or £30 one way,” O’Leary says, adding that the levy “really prohibits that kind of growth”.

With Ryanair expanding its routes out of Edinburgh and Glasgow, there have been fears that it could withdraw from Prestwick, which was bought by the Scottish Government last year.

While O’Leary insists the airline is “absolutely committed” to the Ayrshire airport, he says it would never be able to build a market for business travellers there, and growth of its leisure routes is being held back by APD.

He adds: “We’re working on a campaign with Edinburgh, Glasgow and Prestwick that says if APD is scrapped in Scotland we will double in size over a two-year period. In terms of inward investment and job creation, that would be worth four or five US multinationals coming up here.”

O’Leary has been chief executive of Ryanair since 1994, but when asked whether he has been tempted to take a seat in the cockpit, he replies: “Jesus no. I can barely drive a car. I’ve no interest in flying and never had. One of the great problems with the airline industry is that too many bosses are former pilots. It would be better off if they were former accountants.”

Come the weekend, most of his spare time is spent on his farm in Westmeath, where he breeds Aberdeen Angus cattle and racehorses, or driving his children to various sporting activities. “I have four children under the age of nine, so I’m now the waterboy for the Mullingar under-nines’ rugby team,” he laughs.

“I grew up on farm and always liked cattle, horses, tractors and machinery. It’s a great place for kids to grow up, if you can afford the losses you make with the farming – which is why I have to go to work during the day.”

30-second CV

Job: Chief executive, Ryanair

Born: 1961, in a stable

Education: Clongowes Wood College; Trinity College, Dublin

Reading material: Mainly business books, biographies and historical fiction; currently reading a biography of Wellington and Bernard Cornwell’s book about the Battle of Waterloo, the 200th anniversary of which is next year

Music: Mostly middle-aged stadium rock like U2 and Coldplay

Favourite place: Sad and boring, but Mullingar [in County Westmeath, north-west of Dublin]. Being Irish, I don’t like the sunshine

Hobbies: I run – slowly – am getting back into golf because the kids have taken it up, and like walking the land talking to cattle

Best thing about your job: It’s a great company. We’re shaking up an entire industry and very few Irish companies can do that