Transition Year

Entrepreneur: Michael O’Leary
Company: Ryanair
Company Location:Dublin Airport
Interviewer: Danielle McKay

1. Where did you get your idea from? It was actually Tony Ryan’s idea originally. He got the idea from the low cost American airline Southwest Airlines. We took the operations that had been put in place with the American airline and took them to the next level by offering even cheaper flights via the internet.
2. How long are you in business? Ryanair began in 1985 and in January of 1994 I became CEO of the company. I had previously worked with Tony Ryan before becoming CEO.
3. Have you tried other ideas before this one? No, Michael had never tried any other idea before this one.
4. Why did you choose this sector? I didn’t choose this sector, the sector chose me.
5. What characteristics do you think make an entrepreneur? I believe that if you are hard working, you will most definitely make it as an entrepreneur. I also believe that you have to be somewhat of a revolutionary to make it in business. Other characteristics which are necessary are being a risk taker and also recognising the mistakes that you have made and fixing them as fast as possible.
6. What are your individual characteristics that make you a successful entrepreneur?I am very humble, shy and retiring! It is my humility that makes me the success I am today and also the fact that I am caring helps too.
7. What motivates you?Well, making money motivates me and I suppose in a weird way competition motivates me. Not only do I try to keep up with my competitors but I also set out to beat them and to become the best.
8. How much time do you spend working? / Do you take holidays?On average I work 12 hours a day, 6 days a week. I don’t usually take holidays because I really enjoy the work that I do. Since I got married I usually take one holiday during the year but if I can avoid it I will. When you love what you do even the bad days here are interesting and challenging.
9. What barriers, personal and professional, have you encountered?The incompetence of the Irish government has been a huge barrier. They can’t even build a Luas, never mind run a country. They put operations in place to prevent entrepreneurship from flourishing and they support and protect gross inefficiencies in the public sector.
10. How did you overcome these barriers?I haven’t yet but I believe the way to overcome it is to get rid of the government from business. Monopoly situations don’t work, competition does.We should privatise everything in order to create more competition.
11. What is your legal structure?We are a Public Limited Company and are quoted on the stock exchanges in Dublin, New York and London.
12. How did you recognise the opportunity?It was Tony Ryan that recognised the opportunity.20 years ago an airfare to/from Ireland would cost the average person about two weeks wages. People usually travelled by boat so the opportunity was always there it was just a matter of time before somebody discovered it and exploited it.
13. What kind of market research have you done?We haven’t carried out any market research as I believe that what we offer is self-explanatory. If you can fly to the obviously you will choose the cheaper fare, there’s no research needed for that.
14. How do you market your business?We market our business based on price. We do very little advertising but we do create a lot of controversy to raise awareness of the company.For example, I dressed as a leprechaun this week to promote the opening of twelve new routes.
15. Has the media influenced your business? If so how?We need the media for exposure and promotion but other than that the media doesn’t have much of an influence over the company.
16. Why did you choose this specific location to set up your business? Why did you choose/not choose Ireland?We chose Ireland simply because we come from Ireland and there was an opportunity to set up the business here.
17. How did you source finance? Do you have investors? If so, what sort of relationship do you have with your investors?Yes we do have investors as we are quoted on the stock exchange in Dublin, London and New York. Between 1997 and 1999 we raised about €400 million from investors. Therefore, now we have no need to raise further finance. Any finance we need is taken from the companies profits.Ryanair has a good relationship with its investors and we maintain that relationship by growing our share price and by growing more profits.
18. How much involvement do you have in managing and controlling company finances?Intimate.
19. How do you set your prices?We allow the passengers to set the prices on our flights. We often open up cheap seats in order to get a full aircraft and will accept whatever customers are willing to pay us.
20. What is your profit margin? Is it always stable?The company’s margin is about 20 per cent however, it is not always stable. I fear that the current increase in oil prices may affect the company by reducing our margins.
21. Do you plan on growing your business? If yes, how? Where do you think the new markets will be? We plan to double the amount of passengers we carry from 35 to 70 million in the next 5 years.Thanks to the enlargement of the European Union, we have opened 12 new routes from Dublin and Europe which means we have more potential locations and customers.
22. Is there anything you would do differently?There are obviously many mistakes which I would have preferred not to have made but I believe that we have realised and corrected our mistakes before they became too serious
23. Is there one incident in your business career that has taught you a valuable lesson?Every mistake that you make teaches you a valuable lesson. There’s something new to be learned from every mistake.Make more mistakes.
24. What advice would you give to someone starting off in business?It’s all about working hard, working harder, working even harder, and then working even harder than that!
25. Do you operate an autocratic, democratic or laissez faire style of management? Why do you think this style of management suit’s the type of work you do?I operate a democratic style of management although many people mistakenly believe that I operate an autocratic style.I think democracy suits the Irish personality. I involve our people in decision making and ensure the environment they work in is a relaxing and casual one. I have Monday morning meetings every week where I consult with managers on the goings on within the company.
26. Everybody has a dream in life. Was your dream always to go into business? If not what career path did you have in mind?When I was younger I dreamed of playing football for Manchester City.
27. What measure did you put in place to ensure that the company became profitable?We always keep our fares and costs low and we always try to beat our competitors’ prices. I am also constantly trying to increase the company’s sales.
28. I have read that you:A) Plan to offer advertisers the opportunity to paint the exteriors of the planes:I have offered companies this opportunity and many companies have already taken them up on their offer for example, Cable and Wireless, Vodafone and Hertz have already agreed.
) Intend to offer in-flight gambling:We plan to offer gambling on the web in approximately two months. Also we plan to introduce the use of mobiles on planes. At 35,000 feet customers will have to pay the regular charges however Ryanair will get a percentage of the money from the mobile networks.
29. What has been your proudest moment during your time at Ryanair?My proudest moment has to be in May 1997 when the company was floated on the New York stock exchange. At one point the company had virtually been bankrupt and then to see it turn into a huge success made me extremely proud.
30. Obviously a big part of business is keeping up with your competitors and in 2004 over 60 new low cost airlines were formed. How do you gain a competitive advantage over all the other low cost airlines?First of all, we don’t keep up with competitors we beat them. We beat them thanks to our lower costs and the lower fares we offer. Also, out of the 60 new low cost airlines that have been formed only about 8 of them still exist today.
31. Would you ever consider adopting Japanese styles of management such as empowerment or TQM?No, definitely not I prefer Irish styles of management. ….Without management styles such as TQM how do you ensure that you deliver a consistent level of quality to consumers?We have the best punctuality, the fewest cancellations, the fewest bags lost and the lowest fares. …However you do have a “no refund policy”The way I see it is when you book a ticket in the UCI cinema and cancel it you don’t get a refund so why should we offer refunds on “non refund” flights. We do change flights but do not give refunds.…How do you keep your employees motivated and happy?(Laughing)Fear – no seriously I motivate them by offering high rates of pay but I expect higher levels of productivity in return. We have a somewhat flat hierarchical structure within the company.Is it true that the company does not recognise trade unions?The company does not recognise trade unions because Ryanair offer higher rates of pay than unions will bargain for. Our employees are paid more than the employees at Aer Lingus. I don’t feel trade unions make any positive contribution to a company. We also have a huge HR department to deal with problems and hold monthly meetings to ensure employees are happy.
33. Do you incorporate philanthropy into your marketing plan?Every year we give a six figure sum to a charity nominated by the employees. Last year we donated the money to the Asian Tsunami appeal and this year the money will go to Orbis – which is fighting preventable blindness in the Third World.
34. I read an interview you did in the times in June 06 and in it you said “when I stuff British Airways I’ll quit.” I also read that you announced late in 2005 that you plan to stand down from CEO of Ryan Air in 2008. So do you plan to have “stuffed” British Airways by 2008?We have already stuffed British Airways. We are now the biggest international airline, by passenger numbers, in the world. So now we plan to stuff Lufthansa and Air France next! As for me standing down as CEO, that won’t be happening for a few years.
35. What plans do you have for the future after Ryanair? Do you plan to have a few more Cheltenham gold cup winners?We plan to double in size over the next five years. When I quit I have no idea what I’ll do. I don’t think anybody is lucky enough to have more than one Cheltenham Gold Cup winner in their lives, but a second one would be nice – beyond my wildest dreams.