Now, this Irishman ran a budget airline...

By Felix Gillette

Why does every plane have two pilots?" asks Michael O'Leary, chief executive officer of Ryanair, the largest low-cost airline in Europe.

Wearing sneakers and jeans, O'Leary is pontificating in his office on the outskirts of Dublin Airport.

"Really, you only need one pilot," he tells Bloomberg Businessweek.

"Let's take out the second pilot. Let the bloody computer fly it." One member of the cabin crew on all Ryanair flights would be trained to land a plane, just in case.

From time to time, O'Leary, 49, lets loose a provocative idea to make air travel cheaper by doing something that sounds nutty.

Dismissing his comments as the ravings of a headline hound would miss an opportunity to peer into the airline industry's hidden psyche.

When O'Leary explains how he'd like standing cabins and pay-toilets on all his flights - he says what rival airline chiefs are thinking.

In times when commercial flights may give the impression airlines consider you cattle, only O'Leary will call you a cow, lick his chops, and explain how he plans to carve you for dinner.

During an era when the commercial airline industry has lurched from one crisis to another, Ryanair has grown from a tiny regional airline into a legitimate powerhouse with 7000 employees, flying 1100 routes to 155 airports in 26 countries.

In July, Ryanair became the first airline in Europe to carry more than 7 million passengers in a month. The company has a market cap of US$7.2 billion, dwarfing Ireland's legacy airline Aer Lingus's US$612 million.

During the past decade Ryanair turned net profits in nine out of the 10 years - most recently earning US$431 million in the year to March.

None of this guarantees O'Leary's wilder fantasies will ever be realised, only that his ideas will shape air travel for years.

At the heart of his philosophy is the idea commercial air passengers are not delicate creatures whose repeat business depends on free pillows, blankets, and tea.

Rather, they are willing to endure discomfort and indignity so long as they get to their destination cheaply and with their suitcases.

The question for the airline business and passengers alike is not whether the O'Leary Way will be adopted by airlines scrambling for survival but how fast his paradigm will spread.

In July 2002, passengers in England were boarding a Ryanair flight bound for Dublin when the pilot announced that baggage handlers were short-staffed.

A delay was imminent. Soon, a handful of passengers started heaving bags onto the plane. O'Leary would like to see this on all his flights. "Airports are ludicrously complicated places," he says. "Get rid of all that crap.

It's 2010. Carry your own bag." O'Leary brags that Ryanair was the first airline to charge for luggage: "For a Mickey Mouse Irish airline - the whole industry around the world now watches us."

He has a dream that someday all passengers will fly for free on Ryanair and all the company's income will come from ancillary revenue, such as baggage fees, in-flight sales, and commissions on travel insurance, hotels, and car rentals sold through their website. But ancillary sales make up only 20 per cent of revenue.

Between him and his dream stand trade unions, who drive up costs; politicians, who favour state-run airlines; and regulators, who prevent him from enacting efficiencies such as flying short flights with one pilot.

"If you don't approach air travel with a radical point of view, then you get in the same bloody mindset as all the other morons in this industry."

In exchange for cheap fares, he says, passengers will put up with just about anything. On Ryanair, that can include high luggage fees; relentless in-flight sales pitches for smokeless cigarettes and scratch-lottery games; minimal customer service; bad, expensive food; cramped seats; and flights to secondary city airports often hours from the actual city.

O'Leary would like to get rid of two of the three toilets on all short flights, to pack in more passengers at lower fares. He would charge €1 to use the remaining toilet.

"In many ways, travel is pleasant and enriching," O'Leary says, leaning back in his chair. "It's just that the physical process of getting from point A to point B shouldn't be pleasant, nor enriching. It should be quick, efficient, affordable, and safe."

He'd like to renovate all 250 of Ryanair's Boeing 737s. Earlier this year, he announced he was planning to replace the last 10 rows of seats on his aircraft with 15 rows of upright "standing seats" - vertical benches with shoulder harnesses and arm rests - which would allow 30 more passengers onto each plane.

The idea has been a third rail in air travel since 2006, when Airbus floated then retracted the idea.O'Leary now says it won't save enough room. Instead, he wants to replace the last 10 rows with a standing cabin, fitted with handrails, like a New York City subway car. The new capacity, he says, would lower fares by 20-25 per cent.

"The argument against it is if there's ever a crash, people will be injured. If there's a crash, people in the seats will be injured, too."

O'Leary was born in March 1961, the second of six siblings. His father was an entrepreneur but although his family was well-off they never flew.

After graduating from Trinity College Dublin with a business degree, O'Leary worked for a tax accountancy firm. In 1987 he worked as a financial assistant to Tony Ryan (who died in 2007), an entrepreneur who had made a fortune in aircraft leasing and had started an airline, based at Dublin Airport.

O'Leary agreed to work for no-base salary and a percentage of Ryanair's earnings, should the airline's fortunes ever improve. The deal made him one of Ireland's wealthiest men.

Until 1994, when he became CEO, O'Leary was fairly conventional. He avoided the limelight. At Ryanair HQ, he cultivated a reputation for penuriousness, banning cover sheets on faxes and requiring employees to buy their own pens.

O'Leary worked hard to become known as the most unpleasant man in Ireland. He pulled off obnoxious stunts, including dressing as the Pope to launch a route to Rome and riding a tank into an airport outside London.

He took out ads insulting government officials and called Ireland's former Taoiseach (Prime Minister) Bertie Ahern, a "useless wastrel".

Ryanair has become infamous for its customer service, which some would characterise as minimalist and others have described as hell. Passengers have grappled with surcharges for using such things as wheelchairs.

Yet more and more people are flying Ryanair - which might be the ultimate validation of O'Leary's assessment of what travellers really want. "The customer is usually wrong. The only time you hear from a customer is when they're usually complaining because they want to break our rules. Bugger off."

"I'm not in it for the pride of how I served mankind," he says. "Would I like to see a statue made of me? Absolutely not."

He did concede one point of pride. "We exposed the myth that air travel was some kind of a uniquely sexual experience," he says. "It's not. It's just a commoditised way of getting from A to B."

- BLOOMBERG

© Copyright 2014, APN New Zealand Limited

Assembled by: (static) on red akl_a4 at 03 Sep 2014 06:09:03 Processing Time: 475ms