Michael O'Leary Michael O’Leary: Turbulent times for the man who made Ryanair
by Matt Cooper (Penguin Ireland, €14.95 / £14.99)
Frank Litton
Michael O’Leary stands out among Ireland’s entrepreneurs. Is this because of his great success? His personality? The fact that so many of us have flown with his airline?
Matt Cooper’s account of this “prince among men” will find many readers. Well-written, well-informed, balanced, it deserves to.
Machiavelli tells us a prince succeeds in the hostile and uncertain world because he has the ‘virtu’ to take on ‘fortuna’ and shape it to his ends. Cooper is a good guide to O’Leary’s virtu and how he deployed to wrestle great wealth and much fame from fortuna.
O’Leary’s virtu had little connection with the virtues his Jesuit teachers sought to inculcate, shaped as it is by the exigencies of capitalism rather than the demands of the gospel. While capitalism as a system thrives on unfettered markets, every individual capitalist wishes to restrict competition, form cartels, or best of all, attain a monopoly.
And for all sorts of reasons, some plausible, some not, governments have been willing to facilitate them with regulations and restrictive licensing. The history of the airline business provides a standard case study.
Our national airline Aer Lingus, working in cahoots with British Airways under the benign protection of the Government allowed little or no space for competition, as O’Leary’s friend, mentor and employer, Tony Ryan, discovered. The airline he established to take on the incumbents lost money, then more money and more again.
Profligacy
O’Leary was brought in to see what could be salvaged from the mess. Ryanair was spending money with a profligacy that only monopolies or quasi-monopolies like Aer Lingus could afford. O’Leary stopped that. His tactic was a relentless, detailed attention to the reduction of costs.
His strategy was to take advantage of the changing culture that was bringing neo-liberalism centre of the stage. The needs of the system now took priority over the interests of the individual capitalist. Reagan and Thatcher led the way breaking up cartels, dismantling monopolies.
A wind of change was blowing, arriving in Ireland as a gentle breeze, it was sufficient to shift, with the help of lobbying from Ryanair, the Minister of Transport, Seamus Brennan, from his office’s traditional role as the guardian of the status quo. He allowed space for Ryanair to grow.
When Peter Sutherland, EU Commissioner for competition, dismantled the restrictions that inhibited competition among airlines in Europe, fortune smiled on O’Leary.
O’Leary steered his Principality to its present dominant position. He may speak his mind loudly and with a regrettable vulgarity, but his views derive from a clear understanding of the rules of the game and what it takes to win it.
He combines a keen attention to tactics with a strong strategic sense. He has the courage to play the long game and ignore the siren calls of the stock-market.
Humility figures high among the virtues that brought him success. While he has much to be proud about, pride does not distort his judgement. He can learn from mistakes, retreating from well entrenched positions, as in the cases of customer care and the recognition of unions.
His success owes much to the managers he assembled to run the business. These are not collaborators, but lieutenants, who are regularly challenged to justify themselves at weekly meetings which, it appears, are not showcases for “emotional intelligence”. The workforce are rewarded with competitive wages and managed with indifference to any other satisfaction they could find in their work.
Personal disclosure: I have a daughter, son-in-law and two grandchildren living in Newcastle-upon-Tyne. Thanks to Ryanair we can visit them regularly and they us, with airfares frequently lower than the cost of a taxi to the airport.
While the dealings with Ryanair might not be convivial, as I look around my fellow passengers, it is hard not to conclude that the outcome is a substantial enhancement of conviviality as we travel to find enjoyment in the company of others.
While one might wish to escape capitalism altogether, competitive capitalism serves us better than cosy cartel capitalism.