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Ryanair’s Michael O’Leary pulls no punches at EC innovation conference He wastes no time in twisting the knife of truth in this thrillingly irreverent talk. No, he probably will not ever be invited back.
O’Leary’s conference bio should have foreshadowed to organizers that they would not be getting the traditional, polite, boring PowerPoint presentation.
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That’s awesome.
I love that guy. Thanks for posting this.
To be fair, he is always like that, so they did probably know what they were getting when they invited him.
As it should be: overflowing with brilliant contempt!
Great stuff, but I’d love to fire the morons responsible for filming and editing: permanent closeups of O’Leary, too many protracted cut-away shots of the audience, some clown loudly laughing on the soundtrack, but no meaningful shots of the advertising material O’leary was expounding on at some length, and none at all of the calendar he talked about.
Corporate videoing at its very worst. Was this the Commission’s subtle response to O’Leary’s criticisms?
Well, yes, cute. However, it’s just words. The Ryanair reality is much less impressive. This sums up my feelings about the airline accurately: Hitler Ryanair Rant
Oh, Ryanair has done a lot of good. Michael O’Leary genuinely has transformed the airline industry more than anyone since Juan Trippe. As aggressive cost cutting goes, his company is like few other companies on earth.
One particular positive to come out of Ryanair is in destroying one of the main arguments that legacy airlines have used to justify being protected from competition, the old “We must be protected from competition on our profitable routes so that we can provide a public service by flying to obscure destinations where we will lose money” chestnut, by managing to make money on routes far more obscure than anything the legacy airlines ever flew to.
On the other hand, flying with and dealing with Ryanair has become sufficiently unpleasant that I now fly with other airlines where possible. It is not so much Ryanair’s business model so much as the wilful glee they get in being bastards, even when it is not necessary. I don’t mind paying for a little bottle of wine, but I do mind paying six quid for it. And making it impossible to get the advertised cheap fares unless you have a strange kind of debit card that few people have is one thing, but making the charge six quid per flight sector, and changing which particular kind of strange debit card every six months is too much. I now try to go for other airlines that have copied most of the business model without quite being such bastards.
Although as a positive, I suppose a do have a wallet that now contains many kinds of minor debit card.
The sad thing is that he is so unusual amongst today’s businessmen :-/
Sounds rather like Southwest Airlines here in the US, except I’ve found Southwest flights to be quite reasonable — rules as well as prices. They aren’t sarcastic bastards all the way through.
On the other hand:
http://www.telegraph.co.uk/news/worldnews/europe/ireland/6228088/European-Commission-accused-of-breaching-rules-with-Ryanair-stunt.html
“Antonio Tajani, EC vice-president and transport commissioner, is alleged to have broken impartiality rules by accepting an invitation to fly across the country on a Ryanair Boeing 737, emblazoned with “Vote Yes for Europe” logos.
Ryanair is spending £445,000 on giving away free air tickets to promote the campaign as it struggles to reverse Irish referendum rejection in June 2008.”
Ryanair took the low cost model largely invented by Southwest in the US, and took it to extremes that Southwest had never imagined. Ryanair is generally cheaper, and the company is more profitable, but also less pleasant to fly with. (I find Southwest quite a pleasant airline to fly on). The crash of Valujet flight 592 rather impeded the further development of the discount airline model in the US – Ryanair did learn from this that the one place you don’t ever cut standards is safety.
Yes, the Irish EU referendum and Ryanair issue is a bit troubling. O’Leary came out strongly against the treaty the first time, but somehow turned around between the first referendum and the second, despite his general hatred of bureaucracy and government. I don’t know what he was bribed or threatened with, but something dirty happened there.
@Ellen
The reason why Ryanair sounds a lot like Southwestern is that the original business model is primarily derived from them. Michael O’Leary went over there in 1987 to study their business model and has successfully applied it to Ryanair in Europe.
Key features of the model which Ryanair has adopted and adapted are removal of all non-essential costs (free meals and drinks which were previously considered mandatory).
In the presentation in Brussels, Micheal O’Leary said it himself, the reason they charge for checked baggage is not to squeeze more out of the customer, but because they don’t want the hassle (for which read inefficiency) of checked baggage.
To reduce costs further they don’t have either a PR agency or an advertising agency, doing the vast majority of it in-house and also playing on the love-me-hate-me personality of Mr O’Leary himself.
I’m a fan of Michael O’Leary, not because of what he says, but what he does. He fundamentally understands one thing, low cost airlines are driven by price (i.e. the purest market force) and as long as he keeps beating his competitors on price, he will keep getting customers and therefore will keep growing.
He’s a twat – but I respect his honesty and integrity. He may get lots of complaints from people who don’t like his airline and his answer has always been dead simple “If you don’t like Ryanair, don’t fly with us”.
Keep it up Michael. When people stop buying tickets and Ryanair stops growing like a bamboo stalk then I MIGHT think you’ve gone too far.
I know SouthWest Airlines very well. Very happy customer for the last 25 years. I have flown RyanAir a few times and RyanAir is no SouthWest. In fact comparing RyanAir to SouthWest is a gross libel on SouthWest. RyanAirs contempt for their customers reaches levels not seen since Aeroflot back in the days of the Soviet Union. RA’s attitude to customer service is “you got a cheap’ish ticket” now shut the f**k up.
RyanAir will sooner or later have its Sean Quinn moment, another cute hoor Irish businessman who ran his businesses in a “non traditional” way , and will be quickly folded into Aer Lingus to minimize the international political fall out. Because one day one corner too many will be cut and the whole fragile edifice will collapse.
I appreciate how O’Leary has shaken up domestic European air travel and it may be fun to watch a businessman tweak the noses of eurocrats but he really is the unacceptable face of capitalism. Little more than a small time Tiny Rowland.
Complete and utter bollocks. He is only ‘unacceptable’ to the rent seeking scum he annoys.
I liked the way he had a go at those who are far too free with other people’s money.
@JMC
I hear what you are saying about SouthWest, I used to fly them alternate weekends between my (then) home in Los Angeles and San Francisco where my GF lived.
There are similarities, but there are also differences. These differences are related to the markets in which both companies operate. In the US, there is absolutely nothing wrong with competing purely on price, in fact it is expected.
In Europe, it is considered to be exceedingly vulgar, which is why we have had such an overreaction in Europe to something which is essentially the same business model.
I don’t think this fundamentally undermines what Michael O’Leary is saying, which is that “We are offering a flight for a price – nothing added”.
It seems to me that European customers are expecting a BA / Air France / Lufthansa service at a Ryanair price.
Ain’t gonna happen.
If you don’t like it, follow Michael O’ Leary’s advice “Don’t fly with Ryanair” – besides, it means there are more seats for those that can ONLY afford Ryanair.
I have flown RyanAir a few times and RyanAir is no SouthWest.
Ryanair has lower prices, has a lower cost structure, and is much more profitable. And once you have agreed to fly with them, they will try to screw as much more money out of you as possible. Michael O’Leary says that if you don’t want any more money screwed out of you, you can just keep saying “no”, and this is largely true. His statement in that video that Ryanair provides low fares, flies on time, and generally doesn’t lose your bags is more or less true. He is also right that a lot of people are willing to fly on that basis, even if the journey is otherwise unpleasant.
I think Ryanair would be better in a lot of ways if the company chose to be nicer to customers. Certainly aviation in Europe is much cheaper and there are flights on many more routes than was the case before he came along, and this is good.
Fundamentally, Ryanair causes a downwards pressure on prices. Even if you never fly with them in Europe you benefit from this.
Surely that is good even for the Guardian readers amongst our population?
Equally, it gives them something to bitch about.
@ Sian O’Ceallaigh
>> but he really is the unacceptable face of capitalism
>
> Complete and utter bollocks. He is only ‘unacceptable’ to the rent seeking scum he annoys.
Eh, no. MOL is just another rugby school wide boy who one normally only runs into in the protected professions in Dublin. He and RyanAir prospered precisely because they were entering (courtesy of the EU single markets policy) a profoundly uncompetitive market. So it was pretty easy to find rich pickings. You can run a successful low cost airline without treating the customers like trash.
What I see in RyanAir is not just a company run by a hard nosed business man. I’ve dealt with quite a few of those over the years. But a company with its moment in the sun that will be eventually felled by the fact that it accurately reflects the personality of its principal. Who is just yet another prick from Clongowes. People whose long term competence rarely matches their arrogance or sense of entitlement.
I will pay a hefty premium not to fly RA. But as they fly to withing 15 mins of one of my main family destination in Europe I have flown them far more times than I would have wished. On a very few occasions I have been pleasantly surprised when the experience of flying RA was not godawful but just fairly unpleasant. As I said the nearest thing you will find to flying in the good old Soviet Union.
Both RA and MOL will disappear in a puff of scandal some day. Which is a real pity. Because if MOL was such a nasty piece of work, such a swaggering prick, RA could be turned in a South West like company with a great customer service culture. And a real long term future.
As an aside, I think the charging for checked baggage is a mistake. This drives people to attempt to get as much as possible in carry-on, leading to boarding inefficiencies. For many planes, they are not equipped to take the maximum carry-on sized items (let’s not even mention the people trying – and succeeding – to board with over-sized items) so they must be gate-checked which is effectively no different from just checking luggage in the first place.
I think there’s definitely scope for streamlining the whole baggage thing but charging for what, for most people, is an essential part of the service is likely not it. Even Southwest doesn’t do it and they are the efficiency people.
Richard: To be fair, a lot of other airlines charge for checked luggage now too. Every discount airline I fly with in Europe or Asia does, and so do quite a few theoretically non-discount airlines. The case for doing it is simply too compelling.
I have done exactly what O’Leary suggests in the video, which is that I seldom check luggage and usually carry only cabin baggage. Even with the mad scramble into and off the cabin, I still prefer it. I can get to the airport later and still make my flight, and I am out of the airport much quicker at the other end. I’m happy to do without checked baggage in return for a cheaper fare most of the time. When I need to carry something extra, I am generally happy enough to pay extra.
However, from the airline’s point of view, checked luggage is a nightmare. Automated systems to move or sort it generally don’t work, so moving it around and on and off the plane is extremely labour intensive. Because it is so labour intensive, there is a tendency for staff to steal it or steal from it. Plus it gets lost. Getting it on and off the plane is slow and delays the turnaround at an airport. Even with a lot of hand luggage, getting people on or off is quicker.
The big problem, though, is security related. If a bag has been loaded on the plane, and the passenger then does not board the aircraft, the aircraft has to either wait for the passenger to show up, or unload the bag from the aircraft, as flying the bag without the passenger is seen as an unacceptable security risk. Therefore the bag has to be found and unloaded, which means other bags have to be unloaded and reloaded too. This takes a lot of time. One of the big secrets to the discount airline model is high capital utilisation. Large passenger jets are extremely expensive, and depreciation of the capital cost is one of the largest expenses of any airline. By having very rapid turnarounds at airports (which comes from often using secondary airports amongst other things) discount airlines often manage to get a couple of extra sectors out of their aircraft than do conventional airlines. This makes a huge difference for profitability. Baggage related delays make this impossible, and the fewer checked bags the fewer baggage delays. (If the passenger who does not make the gate in time has no checked bags, he is just left behind. If he does have a checked bag, the fewer bags on the plane, the easier his is to find). This is crucial to Ryanair’s extremely good punctuality, and although they like to crow about it in their publicity, achieving high levels of punctuality is more about maintaining capital utilisation than it is about pleasing passengers.
When Michael O’Leary states that the bag fees are not about raising revenue but are actually about reducing the amount of checked luggage and hence cutting costs, he is actually telling the truth. When he says that he would like to be able to abolish checked luggage entirely, he means that too.
Quite rich really, since RyanAir’s business model is so dependent on the EU – almost biting the hand that feeds you. Although as others have said a few hundred thousand Euros goes a long way in a whorehouse.
The Wikipedia article on Ryanair is fairly thorough although the treatment of Ryanair’s initial 737-800 order is rather weak – they were supplied at below cost and RyanAir are addicted to that as can witnessed by Airbus coming out and more or less saying they wouldn’t sell to O’Leary even if he turned up with the cash.
The story of GPA(Link) is very pertinent to how RyanAir operates and it looks like a case of a leopard and it’s spots – they are utterly up themselves – which ties in with other comments here.
My experience taking short notice work trips is that RyanAir is eyewateringly expensive and utterly awful – even when they’ve scalped you – they continue to rub salt in.
I’ve flown Southwest too and as the other commenter said – comparing the two is stupid.
All the dissembling and dishonest twisting and turning is tiresome and a giant flaw in the business model (see- up themselves). I think they could do just as well by treating people well but it isn’t part of the their corporate culture.
The cheeky chappy routine has worn exceeding thin.
I rather suspect that Boeing are rather tired of O’Leary and his chums – if the 787 works out – I rather think they’ll take some pleasure in giving RyanAir the finger and throw in a few O’Leary-isms to boot. probably concerning reproduction and travel.
Eh, no. MOL is just another rugby school wide boy who one normally only runs into in the protected professions in Dublin.
Yes. And Steve Jobs was just another obsessive compulsive sociopath.
Michael, how do you manage to bring a wash-kit in your carry-on luggage? One of the reasons I always check in my luggage is because I don’t want security chucking away shampoo, razor, toothpaste, etc.
Tim: I have a beard.
Seriously, though, I carry a toothbrush, toothpaste, a cake of soap, and usually a safety razor with a single blade all in a plastic Tesco bag. Sometimes I also carry an electric razor. I make do with the soap instead of shaving cream, and for shampoo I either use what the hotel provides or buy a small bottle at my destination which I throw away before returning home. (Whilst I shampoo my hair frequently, I am not fussy about the particular variety of shampoo with which I do this). I had a tube of toothpaste confiscated once about five years ago, but I have otherwise never had any problems with this. This has been good for subsequent sarcasm related purposes. (“I am supposed to hijack a plane with a tube of toothpaste?”)
Update:When brushing my teeth this morning, I noticed that I was using a tube of toothpaste with Chinese lettering on the side. And the other tube on my washbasin had lettering in Cyrillic. So possibly the answer is that I forget to take this stuff with me, buy it when away, and then bring it back.
Sorry, I’ve just read his conference CV – hilarious…
JG, your last sentence should have been inside the quote – unless you speak from personal experience?:-)
I think comparisons between RA and SWA are – ill-considered.
SWA has a well-deserved reputation for excellent customer service, which I have seen in action.
But this is with US customers, whose expectations and demeanour are generally very different than those of Europeans. Google some YouTube video of SWA in action – I don’t think this sort of thing would go down well with European customers at all. Americans eat it up.
SWA has an air of ‘we’re all in this together’, which only works with Americans, who are adaptable and will rise to the challenge of how to exploit the basic offering – a dirt- cheap fare – in the way that works for them. I think that this sort of approach to Europeans would end up not allowing the airline cost model to work, because Europeans still have entirely different expectations of air travel. And – how can I put this? – many Europeans are simply not acculturated to the idea of participating in air travel in this way. They’re still stuck in a ’60’s timewarp.
Nowhere is this more clearly seen than in the sort of mewling one hears about baggage and carry-ons. I can’t bring my 54-piece hot-roller set and hand-stropped Solingen razors! Oh, the horror!
In the US = where SWA operates, these aren’t issues. There’s a 24/7 drugstore on every corner, and a WalMart every few miles, and it’s actually cheaper to simply buy what you need when you get there. In Europe, where shopping is a rare feudal privilege and not an inalienable right, these approaches are not practical.
And – try getting crosswise with SWA. They do genuinely want to help and genuinely want to get you where you want to go, but Herb Kelleher’s original model holds good and if your desires don’t mesh with SWA’s desires, you’re going to be looking at a refund and the palm of someone’s hand. In that way, they are no different than RA – it’s just that it appears that a lot more of RA’s customers get to that point a lot sooner. They’re not treating you poorly – they’re doing exactly what they said they’d do and not a jot or tittle more. And their cost models do not allow them to deviate from that plan.
I love SWA, and I’ve been happy with RA the very few times I have flown with them. Both delivered exactly what they said they would – more reliably than the full-price ‘quality’ airlines do, I have to say.
llater,
llamas
Quite right – Apologies Alisa.
There you are. My godlike powers have fixed it.
Didn’t mean to nitpick – it’s just that I liked the quote so much:-)
Michael, I agree with much of what you say. I personally typically travel with only a backpack and a carry-on even when free checked baggage is available. My point is more that the airlines seem unable to cope with the unintended consequences of charging for checked luggage, viz, large quantities of carry-on. Only this morning, I was required to “check” my carry-on (not just a gate check) and pick it up at baggage claim. At no extra cost to me (or rather the entity paying my fare) but certainly eliminating a lot of the perceived advantage. Either airlines need to start providing for the situation they’ve brought about or they need to rethink things again.
Tim, you are limited to 4oz I believe. I have a couple of 3oz containers which I use for shampoo and Woolite (though I usually use the hotel shampoo). Toothpaste is only available in 1oz tubes below the limit which is very annoying. Disposable razors do not cause a problem.
And I *still* haven’t been through one of those damn scanners.
“Orville and Wilbur Wright first flew in 1912”?
Hmmm – he should do better on that one.
Good feisty performance. I’m not so sure reality quite matches the hype but he’s certainly committed and I’m with him on his instinctive dislike of expense bandits. I just don’t believe that the Aer Lingus one is really 20 times more.
I have to travel (a lot) with the tools of my business and at short notice – two things that seem to paint a huge target on my chest and no matter which way you slice it Ryanair in that scenario is godawful.
I occasionally (I make my travel preferences clear to my clients) have to travel with O’Leary’s mob and it’s not an experience I look forward to – even though I get fully reimbursed – the piss taking pricing is utterly OTT.
OK – yeah, book way ahead and go around the web site a few times to get the lowest price and travel with hand luggage only – don’t – and you get remorselessly screwed and they take some pleasure in it. cnuts.
Ryanair isn’t the only budget airline …. yet… TFFT