Fly For Free In Ten Years’ Time
Yes, that’s the tastiest point to emerge out of the interview two writers for Germany’s Die Zeit (Marc Brost and Dietmar H. Lamparter) managed to swing by actually travelling all the way to Dublin to catch Ryanair chief Michael O’Leary in his lair. (As you’ll see if you click on the link, it’s more-or-less the headline that they use themselves.) But the article also covers a number of other intriguing current issues of the European budget carriers’ world, and that of European aviation in general, spiced by O’Leary’s combative interactive style.
Admittedly, Brost and Lamparter put spark to the powder of O’Leary’s combustible nature right off the bat, by informing him as they walk in his office door that they got to Dublin with a budget carrier – O’Leary beams “Ah, two new customers!” – only to add “but not Ryanair. Otherwise we would have been underway three days for a two-hour interview.” The airline chief’s response: “Bullshit! And how much did you pay? As little as you could have with us?”
LOW COSTS, OUT-OF-THE-WAY AIRPORTS
For all the theatrics, that’s probably a suitable thematic introduction to the entire get-together, for offering the lowest ticket-prices is of course what Ryanair is supposed to be all about. (Brost and Lamparter leaven the interview’s transcript with interwoven paragraphs of pure reportage, and in the first such paragraph they note the “Ryanair – the low fares airline” plaque hanging on the wall behind airline chief’s desk.) But it’s all a little more subtle than that: as O’Leary notes in the interview, “Any idiot can offer low prices today,” and indeed, it seems that more and more airlines, old and new, are doing just that. “The trick is low costs.”
Part of achieving that is Ryanair’s noted policy of shunning the bigger, established European airports for their smaller counterparts – “Hamburg-Lübeck” instead of Hamburg’s Fühlsbuttel airport, for example (Lübeck is about 100km away from Hamburg proper), or “Brussels-Charleroi” (50km removed) instead of Brussels’ Zaventem airport. These smaller airports attract Ryanair flights by demanding lower usage payments than do the more-established ones, and the interview predictably touches upon the European Union’s current campaign against these supposedly unfair “subsidies.” (Although, as O’Leary is quick to point out rightly, “Brussels is the fatherland of subsidies” – maybe they just get offended when it’s someone else’s “subsidies” and not their own.) O’Leary expresses his confidence that this whole silliness will be cut short by the European Court of Justice.
For what if it isn’t? “No one will fly from there!” No flights means no revenue from airport shops, from cars rented, from hotels lying in the vicinity – actually, of course, no reason to exist, at least as a civilian airport. And also no “glamor”; so far, the airports in Germany that Ryanair has made agreements to use have all insisted on handling “glamorous” international flights, rather than run-of-the-mill inter-German routes. So Ryanair so far does not offer the latter, although the evolution of EU airline de-regulation means that it certainly has the legal right to do so. Indeed, O’Leary gives the clear impression to these German journalists that the budget airline’s expansion in the routes and destinations it offers German customers has gone more slowly than preferred, due to difficulties in finding low-cost airports to work with. In any case, though, he makes it clear that his airline will never give up the fight and sign up with the main city airports: “the best thing that could happen to Munich is to blow up the airport [“Franz Josef Strauss”; super-expensive, in O’Leary’s opinion] and build a rather smaller one there instead.”
NO LIMIT DOWNWARD FOR PRICES
All right then, it’s low costs that are essential to being able to offer lower prices; the other budget competitors springing up may offer them too, but they’re all losing money, O’Leary contends, while Ryanair is not. But how low can you go? All the way to zero, according to the Irishman. Indeed, he claims that Ryanair last year already sold a full 15% of its tickets “at a price of zero euros.” Within four or five years Ryanair expects to expand that proportion to a full half, and in fact O’Leary claims to reduce Ryanair ticket prices by 5% each year. And in ten years: everyone flies for free. How is that possible? Again, because money is to be earned elsewhere, from hotels, rental car agencies, airport shops, perhaps even from local governments happy to pay to gain a stream of cash-spending tourists and other travellers through their city, which these travellers might otherwise avoid (being at present shamefully unaware, for example, of the charms of the past-its-prime steel factory town that is Charleroi, Belgium).
One of Die Zeit’s men then tries to amend O’Leary’s “zero euros” price to “zero euros plus tax,” but that only launches the Irishman on a PG-rated rave against Eurocrats and their taxes. The gist of it is: What’s the point of an airport tax – are train travellers charged a train station tax?
Other points covered in the interview: Although the European airline industry has now seemingly entered a stage of consolidation, of merger-and-acquisition (as in the joining of Air France and KLM), Ryanair is uninterested in any of that. His airline continues to grow faster, with lower costs, than any other, O’Leary contends; a partner would only slow it down. Besides, the airline mergers you see hardly have as their point lowering costs, but rather lowering competition – which only leads to higher prices (specifically mentioning Air France-KLM here). And Ryanair is uninterested in trans-Atlantic flights, for the simple reason that its low-cost model depends on using one aircraft-type only, the Boeing 737 – and the Boeing 737 doesn’t have the range to fly to America. (So no trans-Atlantic flights unless passengers are willing to swim the last three hours, O’Leary decrees.) Finally, how does he see the European airline industry in five years (when, to repeat, Ryanair will be giving half of its tickets away)? There will be the Lufthansa family, the Air France family, the British Airways family – and Ryanair. No other budget carriers? “They will continue to lose money. And at some point they will all be gone.”
