Ryanair’s Micheal O’Leary delivers earnings report as only he can pull off

by Scott Carmichael on

Ryanair CEO Michael O’Leary is probably the most insane airline CEO in the world – but at the same time, he’s probably one of the most brilliant. Even when global airlines went into a panic during the recent economic meltdown, his airline stayed profitable, and his numbers usually outshine those of many legacy carriers.

So, when Mr. O’Leary held a conference call with members of the press to discuss his Q3 earnings report, it was filled with everything we’ve come to expect from him.

Inside Investor Relations picked some of the juiciest quotes,including him making fun of journalists, calling claims by British Airways “bullsh*t” and mocking Air France. Their take on the call can be found here.

Mockery aside, the airline did have some bad news to report – it posted a $14 million loss in Q3 of 2010, mostly due to the major travel disruptions after record snowfall in Europe. Add the fallout from Icelandic volcano Eyjafjallajökull, and 2010 was a pretty lousy year for Ryanair.

Stuff like this only makes me love Mr. O’Leary even more.

Ryanair still serious about transatlantic plans — but stays realistic

by Scott Carmichael on

In a recent interview with a Dutch newspaper, Ryanair founder Michael O’Leary sat down to discuss the future of his airline. The fastest growing airline in the world still operates out of a tiny office complex in Dublin, with no intention of moving to the kind of slick all-glass towers his competitors fill.

When asked about the crisis in the aviation world, he laughs – “what crisis”. In 2009, the Irish low cost carrier transported 66 million passengers, up from 58 million in 2008. But better yet – they managed to double their profits. In just under 6000 square feet, the airline takes care of their sales, marketing, HR and web site management. Nobody uses email to discuss anything – they believe that getting up out of your chair and walking to the person in question is far more efficient.

In 2009, the average price of a Ryanair ticket was just 28 euros (about $40). Even with those low prices, the airline can make a profit. The key to their success, according to O’Leary, is to use smaller regional airports and to stick to a very simple principle – your ticket get you a seat and nothing else.

Ryanair has often been the source of jokes, mostly started by the airline itself. When they say they’ll add a coin slot to airplane bathrooms, people laugh, but O’Leary is dead serious. In 2010, they plan to remove some of the bathrooms on their planes, giving them room to add more seats. With just one bathroom and a coin slot, ticket prices can once again go down a little.

O’Leary also revealed that he’ll hand over control of his airline to someone else in two or three years. Despite his success, he dislikes the aviation world claiming “profit margins are slimmer than at the local grocery store”.

When asked about his transatlantic plans, he still insists that the airline is serious – it won’t be part of the current Ryanair, but flying a plane full of people from Europe to the US should be possible for around $15 per ticket. Like in Europe, a transatlantic Ryanair would most likely make use of smaller regional airports. If he ever pulls this off, he admits that he’d need to do it in one big blow – lots of planes, lots of destinations. Given how successful O’Leary has proven to be, I don’t think anyone in the aviation world should ever doubt he can succeed.

Brutally honest Ryanair CEO says: “go away” to demanding passengers

by Scott Carmichael on

The New York Times recently sat down with Ryanair CEO Michael O’Leary for what turned out to be a brutally honest interview.

The essence of his interview was simple – Ryanair will get you to your destination for a very low fare, on time, with few cancellations and few lost bags. Mr O’Leary was very clear about providing anything other than the most basic of services – anyone expecting or demanding more can “go away”.

The airline never grants refunds, has a zero tolerance policy for excess baggage and does not allow for rebookings or changes to unused tickets, no matter what kind of sob story you tell them.

The result of all this thriftiness is quite amazing – the average ticket price on their entire route network is just $56. In his interview, Mr. O’Leary really does paint an honest picture of how his airline operates – from a ban on highlighters and post-it notes in his offices, to his total lack of patience for email. The entire airline runs like a well oiled machine, albeit one very basic machine.

When Mr. O’Leary issues press releases about paid bathrooms, or a fat tax, everyone laughs. But at the same time, they are very well aware that he could be serious. When Ryanair speaks – the press listens, because at the end of the day, Ryanair is one of just a handful of airlines still making money.

Sure, there are always going to be people who’d rather be shot than step on board one of his planes (I’m one of them). But given his success in recent years, there are probably more people who’d rather pay $10 for a plane ticket and deal with the lack of stuff frequent fliers think they can’t do without.

If anything, the biggest thing to come out of Ryanair is forcing the European legacy carriers to pay close attention, and copy parts of his business model. It is quite obvious that behind the rude and obnoxious exterior lies a brilliant businessman who is changing the aviation world one “go away” at a time.

Will passengers stand for latest Ryanair stunt?

by Tom Johansmeyer on

Just when you think Ryanair CEO Michael O’Leary can’t come up with another way to mess with his passengers, he takes away the seats. The European low-cost carrier’s latest way to cut costs and cram more people on planes is to stick them on stools with seatbelts. According to the Daily Mail, he’s even spoken with Boeing about making this happen.

The nice expression for this, used Ryanair spokesman Stephen McNamara, is “vertical seating.”

But, it’s not a sure thing. The Irish Aviation Authority needs to give him the green light. Something tells me that there has to be a safety issue buried in this. There just has to be. If not, well, let them stand.

The airline estimates that it could increase passengers per flight by 30 percent with the standing room approach and at the same time cut costs by 20 percent. That’s a pretty big gap between revenue and expenses – the sort of financial upside that most airlines have been unable to figure out.

Ryanair: print your tickets at home or not, you pay

by Tom Johansmeyer on

We’re all used to airline fees that punish inconvenient behavior. So, I was beyond impressed when Ryanair found a way to punish the helpful … and punish the helpless. Starting on May 20, passengers will have to pay €10 if they print their own tickets. Essentially, taking matters into your own hands and saving time and expense at the airport will cost you somewhere between $10 and $15.

It sounds like incentive to cause a delay at the counter while you ask thousands of questions while a ticket agent tries to print your pass as quickly as possible. Michael O’Leary & Company thought of this, however, and are charging €40 ($40 to $60, depending on where exchange rates go) for those who try to avoid the €10 fee.

Put simply: the cost of flying Ryanair just went up €10, unless you want it to be up €40.

Fortunately, there is an exception to this rule. If you picked up a €5 fare that includes all fees, you won’t get slapped with any extras.

Online check-in used to be free. Apparently, this “discriminated” against passengers from outside the European Economic Area, as they weren’t able to check in via the web until recently, according to a report in the Sydney Morning Herald. Key word: weren’t. Now they are. So, the discrimination is gone.

That doesn’t stop Ryanair and its twisted logic, though: the new policy doesn’t discriminate because everybody has to pay!

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