Underhill, William, Newsweek International
Times are hard for aviation-industry bosses. Passenger levels and profits are in free fall; jobs and routes are vanishing fast. But try telling Michael O'Leary. Next year the Ryanair CEO will take delivery of eight new aircraft and open 10 more routes from a new European base in Frankfurt. He's promised there'll be no job losses or pay cuts and he has few worries about what lies over the horizon. Within the next seven years O'Leary reckons he can triple passenger numbers, making his budget carrier Europe's busiest airline.
He might just be right. A glance at the corporate record since O'Leary took charge in 1991 suggests his optimism is well founded. Appointed CEO at 29, he's turned a failing family company, inconveniently based in Ireland, into Europe's most profitable airline. More than 50 Ryanair routes now crisscross the continent, mostly from Britain. Profits for the six months to September topped a record $88 million. His own stake is now worth a reported $322 million.
Not that O'Leary, a champion of inexpensive travel, makes a big deal of his success: "Trying to do better than BA or Lufthansa really isn't that hard. The simple fact of life is that if they weren't so high- priced I wouldn't be so successful."
The bloated fares charged by the national flag carriers certainly provide a partial explanation for his triumph. Ryanair grew big by keeping prices much closer to ground level. A trip to the United States 10 years ago convinced O'Leary that the company's best hope lay with the "no frills" model pioneered by Southwest Airlines in the United States. There are no free meals on a Ryanair flight--but a round-trip ticket from London to Brussels can cost as little as 90 euro, less than one third of the BA fare.
But high-flying O'Leary has to do much more than undercut the flag carriers. Europe's cheapskate market is growing more tight as rivals move in. Other budget carriers with catchy brand names--Go, Buzz and easyJet--have been crowding the terminals since the EU's deregulation splurge opened up the airways in the late 1990s. …