Will Ryanair Bring down the Irish Government?

Ryanair has been all over the Irish news recently for reasons I will come to. But first, a bit of background for those of you unfamiliar with Ryanair and Michael O'Leary, their 'either love him or hate him' CEO.

Ryanair is one of the great success stories of Irish Business. Founded in 1985, it has become the largest, low cost airline in Europe and one of the largest airlines in the world: No.1 by the volume of international passengers carried and No.8 by the total volume of passengers carried. The full Ryanair history is available on their website. Those interested can also check out Ryanair on wikipedia.

Despite their success, and the employment they have created, the Irish government has never really forgiven Ryanair for taking on and beating Aer Lingus, the formerly state-owned Irish Airline – and still part state-owned, with several government appointees on the Board - which for many years ran a high fare duopoly with British Airways. For example, Ryanair's 1986 launch fare of £99 return to London was less than half the Aer Lingus/British Airways lowest return fare of £209. Today, most fares are less than a fifth of that. Aer Lingus manages to be a white elephant and sacred cow at the same time, partly because the Board and senior management (from its days of being state-owned) is full of government party cronies and partly because Dublin Airport, where the bulk of the highly unionized Aer Lingus employees work, live and vote, is based in the prime minister's constituency. All politics is local, as they say. Ryanair's much smaller, non-unionized workforce has no similar clout.

Ryanair have also had an extremely fractious relationship with the Dublin Airport Authority (DAA) who run Dublin Airport and set landing fees, etc. The DAA (in a previous incarnation) was spun off from Aer Lingus in 1988, when the latter was semi-privatized, although some would argue that the umbilical cord has never really been cut. Ostensibly an independent agency, the DAA has a largely government appointed Board. Consequently political interference in DAA decisions is not unknown.

Michael O'Leary has been Ryanair CEO since 1994 and has been an outspoken critic of the government's cozy relationship with Aer Lingus and the DAA who often seem to think as one. He had a particularly public, bitter and long-drawn out fight with them over their plans for the second terminal at Dublin Airport which has now been almost completed. Much to their chagrin he also launched an unsuccessful takeover bid for Aer Lingus last year. Some would argue that O'Leary, who has a reputation for plain speaking and, at times, colorful language, goes out of his way to antagonize a government that he sees as inept and anti-business. Unlike many other Irish high-fliers, O'Leary for all his faults chooses to live in Ireland and pay Irish taxes. Those interested can find more about Michael O'Leary on wikipedia.

The reason Michael O'Leary and Ryanair have been all over the Irish news recently is that O'Leary has accused the prime minister and deputy prime minister (who is also the Minister for Enterprise, Trade and Employment) of scuppering his plans to create 300 jobs at Dublin Airport. 300 jobs may not seem many but in the current Irish context it is a large figure and this is a very highly charged accusation. Needless to say they deny this, prompting O'Leary to call them liars and accuse them of misleading parliament, which if proven would in all likelihood bring down the government. He has already published letters that at the very least raise serious questions for them to answer.

I find this interesting from a Public Affairs perspective because of a recent analysis I came across today. Prompted by government accusations that this is all just another PR stunt by O'Leary, one commentator decided to look at the extent to which Ryanair dictate their own media agenda. How one airline is dictating its own online media agenda concludes that:

1) Ryanair, in the majority of cases, do dictate their own media agenda.

2) They generate far more column inches online than any of their competitors, most notably Aer Lingus.

3) For an Irish company, they generate significant international coverage in the US, UK and Germany.

4) Michael O’Leary, while popular, features in a limited number of total articles mentioning Ryanair.

While this study only looks at online media, I think the same is true of all media and I think there are a number of reasons for Ryanair's success:

1) They tend to be very forthright in their comments and what they say usually has a ring of authenticity. Whoever their spokesperson – usually, but not always, O'Leary – they don't dodge questions and they don't equivocate. They answer questions with "Yes and here's why" or "No and here's why."

2) O'Leary himself is a great character. It doesn't matter what he's saying, he's always entertaining, and so journalists love him because he'll always provide a good sound bite.

3) No matter what their latest "stunt", their position is always "We are the cheapest airline who will get you there on time more than anyone else" And that's true. It's simply irrefutable, and it's a killer point. If O'Leary does actually bring in a fat tax or start charging people to use the toilet on board, his argument will be "We can either charge the individual who's utilizing the service, or we can make everyone pay for the that individual using the service."

4) Whether one likes their business model or not, it works. Unlike Aer Lingus, they're not losing money every day, they're looking to create jobs, and they're not dealing with strike threats and canceled flights. Every time they get in a debate with Aer Lingus, the Aer Lingus person is out-gunned simply because of the nature of the two companies.

5) They get the benefit of the doubt in 'he said, she said' situations because of their history. They did bring down airfares, making it possible for millions of ordinary people to fly, people who could never have dreamed of doing so in the 1980's when national monopolies abounded. Dublin Airport and the people running it are disasters as anyone who has passed through them can verify.

6) As I've written elsewhere, journalists are lazy. In the era of 24 hour news channels and online media, the pressure is on to get a story out as quickly as possible. And what simpler way to do that than simply regurgitating someone's press release. No analysis of the issues behind it. No investigation of claims of X hundred jobs to be created. In print journalism, the issue seems to be more one of cost than time.

It is hard not to conclude that Ryanair are PR geniuses. Therefore, from a Public Affairs perspective, the million dollar question has to be: if Ryanair are so effective at setting the media agenda why have they singularly failed to influence government policy? I'll try to answer this in one of my next blogs. (Apologies if this comes as an anti-climax.)