0:00:02 > 0:00:04I'd like to ask for everybody's attention, please.
0:00:09 > 0:00:12Low budget airlines have revolutionised the way we fly.
0:00:18 > 0:00:21EasyJet now carries more passengers than British Airways.
0:00:23 > 0:00:26And the giant of the low cost carriers is Ryanair.
0:00:27 > 0:00:32HE SINGS: We're off to see the wizard, the wonderful wizard of Oz.
0:00:32 > 0:00:34Michael O'Leary is its boss.
0:00:34 > 0:00:36This way, is it?
0:00:36 > 0:00:41He may not look like a tycoon, but he's built a multi-billion pound business.
0:00:41 > 0:00:43Just another dull day in Katowice.
0:00:46 > 0:00:50- That's our time in Amsterdam this morning.- No passport required.
0:00:50 > 0:00:53We've been here...
0:00:53 > 0:00:54ten minutes.
0:00:54 > 0:00:57- Good afternoon.- Morning, sir.
0:00:57 > 0:00:59Budget airlines are thriving -
0:00:59 > 0:01:02by making their planes and their staff work harder.
0:01:05 > 0:01:09And for passengers, too, air travel sometimes feels like hard work.
0:01:09 > 0:01:13I think people don't like being treated like cattle.
0:01:13 > 0:01:18Even the cattle in their lorries get free water.
0:01:18 > 0:01:20And they don't have cope with these things.
0:01:20 > 0:01:23GRUNTING
0:01:23 > 0:01:25CORK POPS Whoo!
0:01:25 > 0:01:28Good evening, easyJet. This is Stelios speaking. How can I help you?
0:01:28 > 0:01:33The battle of the low cost airlines has been a clash of big personalities.
0:01:35 > 0:01:39This is the inside story of how a Greek and an Irishman
0:01:39 > 0:01:42fought to turn the airline industry on its head.
0:01:43 > 0:01:47Millions now have a chance to experience more of the world than they used to.
0:01:50 > 0:01:55But in the process, air travel has, well, lost a little of its glamour.
0:01:56 > 0:01:59We do thank you very much indeed for your attention, ladies and gentlemen,
0:01:59 > 0:02:02and we hope you have a pleasant flight this afternoon.
0:02:13 > 0:02:16EasyJet has 200 planes.
0:02:16 > 0:02:18Each makes up to four round trips every day.
0:02:22 > 0:02:24Their crews meet up around 6am.
0:02:24 > 0:02:28- Morning, how are we all? All right?- Good, thank you.- Super.
0:02:28 > 0:02:31- Fit to fly?- Yes.- Outstanding.
0:02:31 > 0:02:34Matt Illman, a cabin crew manager, meets his three colleagues
0:02:34 > 0:02:38for the day, and puts them through their daily test of safety.
0:02:38 > 0:02:43Kendel, you noticed a milky white build-up on the wing,
0:02:43 > 0:02:45what might we think this build-up is?
0:02:45 > 0:02:48- I would think that it was a rime ice.- Absolutely, spot on.
0:02:49 > 0:02:54At the table next to them, their pilot and co-pilot check their flight plans and the weather.
0:02:54 > 0:02:58It's fine in Amsterdam, windy into Gatwick
0:02:58 > 0:02:59and windy into Edinburgh.
0:03:02 > 0:03:08Gatwick is just one of 22 airports where easyJet bases its planes.
0:03:08 > 0:03:11Right, so have I got Gatwick online yet?
0:03:11 > 0:03:14- 'Yeah, I'm here, Will.'- Morning. - So the issues this morning...
0:03:14 > 0:03:19While the first flights get underway, at company headquarters at Luton airport,
0:03:19 > 0:03:24the senior management meet to review yesterday's operations.
0:03:24 > 0:03:26OK, so we had a bit of a challenging weekend.
0:03:26 > 0:03:30So, on Saturday we had 1,120 sectors flown,
0:03:30 > 0:03:33we also had some snow closures in the evening.
0:03:33 > 0:03:38So the daily ops meeting is the one place where the right people
0:03:38 > 0:03:40get together who can take decisions
0:03:40 > 0:03:42about the day-to-day operation of the airline.
0:03:42 > 0:03:47We've got about five or six engineering issues during the course of the day.
0:03:47 > 0:03:51Everyone knows what they are doing, why they are doing it and how they're doing it.
0:03:51 > 0:03:54So it is an operation, I think, that is run in a militaristic fashion.
0:03:54 > 0:03:56CORK POPS
0:04:00 > 0:04:06Stelios Haji-Ioannou started easyJet with £5 million from his dad,
0:04:06 > 0:04:07a shipping tycoon.
0:04:13 > 0:04:17Stelios no longer runs easyJet, but he's still its biggest shareholder.
0:04:20 > 0:04:23Now, all told, it's been a great investment for me.
0:04:23 > 0:04:26I've made about a billion pounds in the process.
0:04:26 > 0:04:28So it's a significant investment I keep an eye on.
0:04:30 > 0:04:33Today Stelios also keeps an eye on other businesses he owns,
0:04:33 > 0:04:34and charities he funds.
0:04:36 > 0:04:41One, two, three, testing. Can you hear me? Testing, testing.
0:04:43 > 0:04:45Between them, Stelios, a Greek Cypriot,
0:04:45 > 0:04:47and Michael O'Leary, from rural Ireland,
0:04:47 > 0:04:51have transformed the way the British fly.
0:04:51 > 0:04:53It probably does take maybe a Greek mentality
0:04:53 > 0:05:00and an Irish mentality to come at it from a slightly different angle.
0:05:00 > 0:05:04I think it was logical that somebody growing a low-fare airline business
0:05:04 > 0:05:09would emerge out of Ireland. To be fair to Stelios it is much more impressive that
0:05:09 > 0:05:12the son of a Greek shipping billionaire -
0:05:12 > 0:05:15who could, if he wanted to, be swanning around the world in executive jets -
0:05:15 > 0:05:19has made another fortune by offering reasonably-priced air travel.
0:05:19 > 0:05:22It's just not as reasonably priced as Ryanair.
0:05:25 > 0:05:28The low cost rivals are fighting for traffic all over Europe.
0:05:31 > 0:05:34Katowice in Poland is getting a lightning visit from O'Leary.
0:05:37 > 0:05:40He's taking in three Polish airports today,
0:05:40 > 0:05:42getting Ryanair's name in the media.
0:05:42 > 0:05:45What do you like most about Poland?
0:05:45 > 0:05:48I think what I like most today about Poland
0:05:48 > 0:05:52is your rubbish football team, that are even more rubbish than the Irish football team,
0:05:52 > 0:05:55and that's setting the bar pretty low in terms of rubbish.
0:05:57 > 0:06:01O'Leary has business in his blood - he's the son of an Irish entrepreneur
0:06:01 > 0:06:04who'd had both successes and failures.
0:06:04 > 0:06:06Thank you very much. Dziekuje.
0:06:06 > 0:06:09- Were you ambitious to make money? - Yes.
0:06:09 > 0:06:11I think one of the great things you learn
0:06:11 > 0:06:14if your father has made money and lost money a couple of times,
0:06:14 > 0:06:18the great lesson you learn is the NOT having money.
0:06:18 > 0:06:23You don't remember the good times. You only remember the times when there wasn't money there.
0:06:23 > 0:06:27And generally it breeds determination not to repeat that in your own life.
0:06:32 > 0:06:34O'Leary learnt business less from his father
0:06:34 > 0:06:39than from a father-figure - a world-class Irish entrepreneur,
0:06:39 > 0:06:42Tony Ryan, who hired O'Leary as his personal assistant.
0:06:44 > 0:06:49This was an opportunity for him to learn at the feet of the master, if you like.
0:06:49 > 0:06:53Tony Ryan was a really tough task-master,
0:06:53 > 0:06:55somebody who was very, very successful in business,
0:06:55 > 0:06:58very driven and really drove people very hard himself.
0:06:59 > 0:07:05Ryan had established a huge and profitable aircraft-leasing business, GPA,
0:07:05 > 0:07:11and, in 1985, a small, loss-making airline which he called Ryanair.
0:07:12 > 0:07:15The problem was he had all of this income coming in from GPA
0:07:15 > 0:07:18and going straight out the door into Ryanair, which was a bottomless pit.
0:07:21 > 0:07:24O'Leary had studied accountancy, so Ryan sent him
0:07:24 > 0:07:28to his airline to see what could be done to stem its losses.
0:07:33 > 0:07:36I urged, repeatedly, shut this thing down, it can never make any money.
0:07:36 > 0:07:39It had lots of passengers but it could make no money,
0:07:39 > 0:07:40because the costs were too high.
0:07:45 > 0:07:48The early Ryanair had business class,
0:07:48 > 0:07:50a smart ticket office in Dublin,
0:07:50 > 0:07:55and a habit of dishing out free food and drink at every opportunity.
0:07:56 > 0:07:59Charlie Clifton was among its first staff.
0:08:01 > 0:08:03It was good, old-fashioned customer service.
0:08:03 > 0:08:08If there were flight delays, we'd give them food and drink and all the rest of it.
0:08:08 > 0:08:12And you would get passengers coming up to you who were not delayed,
0:08:12 > 0:08:14had no delay at all, queuing up for their food
0:08:14 > 0:08:15and everything like that,
0:08:15 > 0:08:18thinking, "It's Ryanair, it's feeding time at the zoo".
0:08:24 > 0:08:28O'Leary believed Ryanair would always lose money.
0:08:28 > 0:08:3031 through 60.
0:08:30 > 0:08:34But his boss, Tony Ryan, still had hope.
0:08:34 > 0:08:39He knew how deregulation had been shaking up American aviation since the late 1970s.
0:08:41 > 0:08:46We are looking at an evolution where an industry that was inefficient
0:08:46 > 0:08:50is required to become efficient in the marketplace.
0:08:50 > 0:08:52And those airlines that don't get their costs in line
0:08:52 > 0:08:54are not going to survive.
0:08:58 > 0:09:02Ryan had heard about an entrepreneur called Herb Kelleher.
0:09:02 > 0:09:06MUSIC: "Eye Of The Tiger" by Survivor
0:09:10 > 0:09:14Kelleher ran an airline called SouthWest.
0:09:14 > 0:09:17He was the kind of guy who'd settle a legal dispute
0:09:17 > 0:09:19with an arm-wrestling match.
0:09:20 > 0:09:23CHEERING
0:09:25 > 0:09:28Ryan sent O'Leary to find out more.
0:09:28 > 0:09:33He said, we're going to have one last go, would I go to the States, meet SouthWest Airlines.
0:09:33 > 0:09:35He arranged a meeting with Herb Kelleher
0:09:35 > 0:09:37and it was the kind of road to Damascus moment.
0:09:40 > 0:09:43Remember who brought those low fares and how you keep them.
0:09:43 > 0:09:46Because they go away unless you fly SouthWest Airlines
0:09:46 > 0:09:48again and again and again.
0:09:55 > 0:09:59SouthWest did everything airlines thought they shouldn't do
0:09:59 > 0:10:01if they wanted to make money.
0:10:03 > 0:10:06It let its passengers take any seat on the plane,
0:10:06 > 0:10:08just like on a bus or train.
0:10:08 > 0:10:14It didn't serve full meals, just drinks and snacks.
0:10:14 > 0:10:17It made its planes and its crews work more flights per day.
0:10:19 > 0:10:21And it offered dramatically cheaper tickets.
0:10:26 > 0:10:30It just seemed to be blatantly obvious that this was the way forward.
0:10:30 > 0:10:33That's what started the revolution in low fare air travel in Europe.
0:10:35 > 0:10:39ANNOUNCER: Could the last remaining passengers travelling to
0:10:39 > 0:10:43Amsterdam with easyJet flight EZY8873
0:10:43 > 0:10:46please go immediately to gate 112.
0:10:46 > 0:10:47Gate 112.
0:10:52 > 0:10:57Back at Gatwick, at 7am, easyJet's first wave of flights is boarding.
0:10:57 > 0:10:59Morning, sir.
0:11:00 > 0:11:03Once again ladies and gentlemen, a very good morning to you all
0:11:03 > 0:11:07and a warm welcome on board this easyJet flight to Amsterdam.
0:11:07 > 0:11:09Do you have a special voice?
0:11:09 > 0:11:13- SHE LAUGHS - Yes. Yes I do!
0:11:13 > 0:11:17My friends and family always ask me to do my work voice
0:11:17 > 0:11:22and show them what I say on board, and they all find it highly amusing.
0:11:39 > 0:11:41Are you ready for Freddie?
0:11:41 > 0:11:45It was back in the '70s when Freddie Laker tried to undercut
0:11:45 > 0:11:50the traditional airlines by offering cheap fares across the Atlantic.
0:11:50 > 0:11:53Which seat do you want, darling? Which seat?
0:11:54 > 0:11:57- Laker was knighted for his efforts...- Cheers!
0:11:57 > 0:12:01..but four years later his business went bust.
0:12:01 > 0:12:04National airlines were still owned by governments
0:12:04 > 0:12:07and governments didn't want too much competition.
0:12:12 > 0:12:15Travellers between Scotland and London
0:12:15 > 0:12:18will now be able to make the trip for as little as £29
0:12:18 > 0:12:22on a new airline called, appropriately enough, easyJet.
0:12:26 > 0:12:30More than 10 years later, deregulation finally came to Europe.
0:12:30 > 0:12:32Welcome on our first flight.
0:12:36 > 0:12:39For easyJet's young founder, business wasn't as much about
0:12:39 > 0:12:41the need to make money as the desire
0:12:41 > 0:12:44to escape from a privileged upbringing.
0:12:47 > 0:12:50I was suffering from the rich son syndrome,
0:12:50 > 0:12:52so whatever I was doing,
0:12:52 > 0:12:54people said, "It's really your father's doing."
0:12:54 > 0:12:57I'm eternally grateful that at the age of 28,
0:12:57 > 0:13:00he actually gave me the opportunity to do this amazing thing.
0:13:00 > 0:13:04"Here, son, go and prove yourself." And, of course, it wasn't a guaranteed success.
0:13:04 > 0:13:08Maybe it wouldn't have worked. It would have been very embarrassing to go back and say,
0:13:08 > 0:13:09"Dad, I've lost it all."
0:13:14 > 0:13:19Like O'Leary, Stelios made the pilgrimage to Texas to find out how to run a low cost airline.
0:13:23 > 0:13:27I had a big advantage because I've never worked in an airline before,
0:13:27 > 0:13:29so I literally travelled a bit on SouthWest,
0:13:29 > 0:13:34read a couple of books and a Harvard Business School case study on it.
0:13:34 > 0:13:37And then said, "OK, let's see how we're going to make this work."
0:13:46 > 0:13:53Richard Gooding was the manager of a small, unprofitable airport north of London at Luton
0:13:53 > 0:13:57when he got a visit from a keen young man who said he wanted to start an airline.
0:13:57 > 0:14:01We had seen many people who had wanted to start airlines.
0:14:01 > 0:14:03They had a common ingredient.
0:14:03 > 0:14:06They had been to the bank, who had laughed a lot, and had then
0:14:06 > 0:14:10come to us to say, would we lend them the money to get started.
0:14:10 > 0:14:15Stelios was different. He already had money.
0:14:15 > 0:14:18And he was less interested in planes than in selling tickets.
0:14:20 > 0:14:24He had a theory of something called the ignition price.
0:14:24 > 0:14:27His view of the ignition price was if you could
0:14:27 > 0:14:31get your price down to what that is, the market will explode.
0:14:31 > 0:14:34This was very interesting, innovative thinking for us in aviation.
0:14:34 > 0:14:37I know that it had happened in other retail industries,
0:14:37 > 0:14:39but in aviation we hadn't thought like that.
0:14:43 > 0:14:46Stelios hired a couple of planes at Luton.
0:14:49 > 0:14:53What would make easyJet different was its branding.
0:14:53 > 0:14:56Stelios felt that he wanted to own a colour,
0:14:56 > 0:15:00he wanted a colour that nobody else was using, and orange was his idea.
0:15:00 > 0:15:03And we sat behind a computer screen
0:15:03 > 0:15:08until we arrived at the most shocking, vivid shade of orange
0:15:08 > 0:15:12we could find, which was pantone 021C, I think,
0:15:12 > 0:15:14which is easyJet orange.
0:15:19 > 0:15:22EasyJet reservations, Vicky speaking. How may I help you?
0:15:22 > 0:15:24If you want to speak to her first...
0:15:24 > 0:15:29Even more original than the Pantone orange was Stelios's idea for selling tickets.
0:15:29 > 0:15:33EasyJet's call centre would take bookings direct from its customers.
0:15:34 > 0:15:39No longer would travel agents get a hefty slice of every air fare.
0:15:39 > 0:15:43It was suddenly possible to cut out the commission of the travel agent,
0:15:43 > 0:15:45cut out all the accounting of tickets,
0:15:45 > 0:15:48and save the best part of 20%.
0:15:48 > 0:15:51I've got two flights available there as well.
0:15:51 > 0:15:52I didn't know what I was doing.
0:15:52 > 0:15:54Remember, it could have been possible that
0:15:54 > 0:15:58I could have opened the airline, say, "We only take bookings over the telephone,"
0:15:58 > 0:16:02and the planes could have been empty. But I was the right place at the right time.
0:16:02 > 0:16:06Good evening, easyJet, this is Stelios speaking, how can I help you?
0:16:06 > 0:16:08The low fares revolution had begun.
0:16:15 > 0:16:2120 years ago, it would be unheard of for a group of lads to pop off to Eastern Europe for a stag party.
0:16:23 > 0:16:25Today, it's nothing special.
0:16:26 > 0:16:29We're going to Riga in Latvia. It's a mate's stag do,
0:16:29 > 0:16:32cheaper than Prague, etc, Amsterdam,
0:16:32 > 0:16:35so, yeah, should be a good craic. Off we go.
0:16:41 > 0:16:44Lower fares have changed attitudes to travel.
0:16:44 > 0:16:48Passengers are in many cases indifferent to where they go.
0:16:48 > 0:16:50So long as it's a sunshine destination
0:16:50 > 0:16:51or a historic destination,
0:16:51 > 0:16:54depending on what their personal preference is.
0:16:54 > 0:16:56If it's Krakow or Prague, it really doesn't matter.
0:16:56 > 0:16:59Or if it's Alicante or Malaga, it doesn't matter.
0:16:59 > 0:17:01It's the price that determines that demand.
0:17:03 > 0:17:05When you can travel to somewhere like, you know,
0:17:05 > 0:17:08a couple of hours away on a plane, different country,
0:17:08 > 0:17:12different culture for the same price it would take you to get up to somewhere
0:17:12 > 0:17:15like Manchester or Liverpool, then it's a bit of a no-brainer really.
0:17:17 > 0:17:20The arrival of low cost airlines has created work in Riga...
0:17:24 > 0:17:26..not least for the local police.
0:17:28 > 0:17:30Soon as we had Ryanair, for example,
0:17:30 > 0:17:33we had more and more Brits coming here.
0:17:33 > 0:17:36It's very easy to find here some cheap entertainment
0:17:36 > 0:17:38that concerns girls, some striptease,
0:17:38 > 0:17:41maybe even prostitution, and that it was easily available.
0:17:41 > 0:17:43That brought here a lot of youngsters.
0:17:45 > 0:17:49Riga responded to the influx by setting up a special
0:17:49 > 0:17:52police department just to deal with the new tourists.
0:17:52 > 0:17:55They were all taught English, which they would need
0:17:55 > 0:17:57on their nightly patrols.
0:17:57 > 0:18:00- Are you keeping us safe? - Is that a cameraman? Hello!
0:18:03 > 0:18:08The tourist police have learnt how Brits like to enjoy themselves.
0:18:08 > 0:18:11In the night there are many Brits having stag parties.
0:18:11 > 0:18:14There was one British guy dressed as Spider-Man,
0:18:14 > 0:18:16he was, like, fat Spider-Man.
0:18:19 > 0:18:21That's how they enjoy their time here.
0:18:21 > 0:18:26Richard and his friends are already impressed with Riga's nightlife.
0:18:37 > 0:18:40A lot going on. Lots of different places to go and see.
0:18:40 > 0:18:42It's what we expected when we came here,
0:18:42 > 0:18:44so it's been really good so far.
0:18:46 > 0:18:51Many locals see the new tourists as a gift from low cost airlines.
0:18:51 > 0:18:53Low cost airlines are doing a really good thing
0:18:53 > 0:18:55because they are bringing money here.
0:18:55 > 0:18:58Tourists come just for the weekend here
0:18:58 > 0:19:01and they are spending enormous money.
0:19:04 > 0:19:07Only when dawn breaks will the casualties be revealed.
0:19:10 > 0:19:12Yes, it usually happens.
0:19:12 > 0:19:15Some British guys wake up somewhere,
0:19:15 > 0:19:20they don't remember where they have been, where are their friends,
0:19:20 > 0:19:21where are they staying.
0:19:21 > 0:19:25So it takes hours to find the place where he is staying.
0:19:25 > 0:19:28BELL CHIMES
0:19:32 > 0:19:36Low cost airlines are certainly a boost to Riga's economy,
0:19:36 > 0:19:40but perhaps not the kind that locals would have chosen.
0:19:40 > 0:19:43All these stag parties going to Eastern European cities -
0:19:43 > 0:19:45do you feel you owe any apologies there?
0:19:47 > 0:19:51I think you're... Look, we're a low fares airline.
0:19:51 > 0:19:53We carry 80 million passengers a year.
0:19:53 > 0:19:56The overwhelming majority of the passengers
0:19:56 > 0:20:00we carry each year are families going on holidays, business people...
0:20:01 > 0:20:05I think the apocryphal stag or hen party is a tiny proportion
0:20:05 > 0:20:09of the business, and I think you'll find that in most Eastern European
0:20:09 > 0:20:12cities or in Dublin or in the cities where we bring that stag party
0:20:12 > 0:20:15or hen party business, they are very grateful for the business.
0:20:15 > 0:20:17The stag parties have to go somewhere.
0:20:25 > 0:20:28Back in the early '90s, when the young Michael O'Leary
0:20:28 > 0:20:31returned from the States inspired by SouthWest,
0:20:31 > 0:20:35he wasn't sure he'd be able to transform the ailing Ryanair.
0:20:35 > 0:20:39Perhaps he just didn't have the personality for it.
0:20:39 > 0:20:41All of our flights on time.
0:20:41 > 0:20:44Michael O'Leary was a sober-suited accountant
0:20:44 > 0:20:48who really sat at the side of the room, was very quiet.
0:20:48 > 0:20:50People really didn't know what to make of him.
0:20:50 > 0:20:54He turned up to work with blazers, he was very, very conservative.
0:20:55 > 0:21:00In 1994, the airline's founder, Tony Ryan, asked his protege
0:21:00 > 0:21:04to step up to the top job, as Chief Executive of Ryanair.
0:21:06 > 0:21:12I really didn't want to do it. I didn't want the profile of it.
0:21:12 > 0:21:15And eventually I was persuaded to do it.
0:21:20 > 0:21:23O'Leary threw out the smart suits, unbuttoned his collar
0:21:23 > 0:21:24and got to work.
0:21:27 > 0:21:31It was a very simple choice. Close the airline or cut the costs.
0:21:31 > 0:21:36It was brutal in terms of changing the model, but it changed
0:21:36 > 0:21:40dramatically and quickly, and Michael was the driver behind that.
0:21:43 > 0:21:47To be low cost, you really have to eat, sleep, drink and believe in low cost.
0:21:50 > 0:21:52No more stuff for free.
0:21:52 > 0:21:54When you took away the free stuff, guess what?
0:21:54 > 0:21:59Lots of people started buying a couple of litres and 200 fags.
0:22:02 > 0:22:06Even better than cutting costs was to turn a cost into a profit.
0:22:06 > 0:22:10It worked beautifully with the orange juice.
0:22:10 > 0:22:14Finches Orange Juice were trying to break into the UK market.
0:22:14 > 0:22:17So it was very valuable for them, even as a marketing tool,
0:22:17 > 0:22:22for people going from Ireland to the UK, to be drinking Finches Orange Juice.
0:22:22 > 0:22:26So, at the start, we were buying that product from them
0:22:26 > 0:22:29but we had to have a conversation with them then to say, "We can't afford to do this."
0:22:29 > 0:22:33They said, "OK, well, we still want to be on board,
0:22:33 > 0:22:34"so we'll give it to you for free."
0:22:34 > 0:22:37And then we discovered that this probably was a marketing
0:22:37 > 0:22:40opportunity for them, so they should pay for the privilege.
0:22:40 > 0:22:42And if they didn't want to do it, we'd get somebody else.
0:22:42 > 0:22:44So they said, "OK, we'll pay for it."
0:22:44 > 0:22:46Then we said, "Why don't you give us the glasses as well?"
0:22:51 > 0:22:54Ryanair was soon offering more flights
0:22:54 > 0:22:58and lower prices from Ireland than Aer Lingus and British Airways.
0:23:00 > 0:23:05High prices had kept families apart, so now even God was backing Ryanair.
0:23:07 > 0:23:10Ryanair was really surprised that they found a powerful marketing agent
0:23:10 > 0:23:13in the Catholic Church because the priests started preaching
0:23:13 > 0:23:17from the pulpits, reminding their congregations that now there were cheap flights to Ireland,
0:23:17 > 0:23:20so if they did want to go home and visit their families,
0:23:20 > 0:23:23they could afford to do it, and that they should check out Ryanair.
0:23:34 > 0:23:37Today, easyJet and Ryanair still follow most of the original
0:23:37 > 0:23:40SouthWest formula for how to run a low cost airline.
0:23:42 > 0:23:45Thanks very much, sir. Thank you, madam. Bye, now. Thank you. Goodbye.
0:23:45 > 0:23:50Thank you very much. You're very welcome. Thank you. Bye-bye.
0:23:50 > 0:23:53They both rely on quick turnarounds.
0:23:53 > 0:23:57- Right, have we got any gloves? - Yes, plenty.
0:23:57 > 0:24:00- Would you like one? - Yes, please, that'd be grand.
0:24:00 > 0:24:02In a 25-minute stop, there's no time for cleaning staff
0:24:02 > 0:24:05to come on board, so that's up to the crew.
0:24:06 > 0:24:09It's amazing what gets left behind.
0:24:09 > 0:24:14Laptops, iPads, passports... You name it.
0:24:16 > 0:24:18Even easyJet's co-pilot helps out.
0:24:18 > 0:24:22- Oh, thank you, darling. - That's all right.
0:24:22 > 0:24:25As you can see, the rubbish is now out and we are ready to go.
0:24:25 > 0:24:27Morning, sir.
0:24:27 > 0:24:29This team has landed in Amsterdam,
0:24:29 > 0:24:32but it doesn't make much difference to them.
0:24:32 > 0:24:35That's our time in Amsterdam for this morning.
0:24:35 > 0:24:38That was our trip to Amsterdam.
0:24:38 > 0:24:39How long have we been here?
0:24:39 > 0:24:42- No passport required. - We've been here...
0:24:42 > 0:24:44ten minutes.
0:24:44 > 0:24:47And the passengers, if you turn around, are already boarding,
0:24:47 > 0:24:49so it's my time to go, I'm afraid.
0:24:55 > 0:24:59Whatever passengers might assume, low cost airlines mostly fly
0:24:59 > 0:25:02younger planes than the rest of the industry.
0:25:03 > 0:25:08Each airline flies only one kind - easyJet only flies Airbus planes.
0:25:09 > 0:25:11And Ryanair only flies Boeings.
0:25:12 > 0:25:15It's another part of the original low cost model.
0:25:16 > 0:25:18All our pilots can fly all the planes.
0:25:18 > 0:25:21We only need one bank of spares for all those planes.
0:25:21 > 0:25:23The cabin crew, when they get on board, know all the galleys
0:25:23 > 0:25:26and everything will be in exactly the same spot.
0:25:26 > 0:25:28So it's simply replicating a simple formula
0:25:28 > 0:25:30and making it simpler and simpler.
0:25:30 > 0:25:32The more simple we can make it, the more lower cost
0:25:32 > 0:25:33and efficient it will be.
0:25:40 > 0:25:43There's a final, key part of the SouthWest formula
0:25:43 > 0:25:47that easyJet never adopted, but Ryanair has embraced.
0:25:48 > 0:25:52It's the use of smaller, out-of-the-way airports.
0:25:53 > 0:25:55If you are going to Frankfurt, they'll bring you to
0:25:55 > 0:25:59Frankfurt-Hahn, which is about an hour and 20 minutes away.
0:25:59 > 0:26:02You can go to Paris, but you go to Beauvais with Ryanair,
0:26:02 > 0:26:04which is a good hour from Paris.
0:26:06 > 0:26:10So their model has been to develop secondary airports.
0:26:10 > 0:26:13They're mainly disused, old airbases that they have got
0:26:13 > 0:26:15scattered around Europe.
0:26:15 > 0:26:18So this is what your cheap flight with Ryanair will get you.
0:26:25 > 0:26:30Conor McCarthy helped set up Ryanair's European network.
0:26:30 > 0:26:33We just lined up these small airports, maybe ten at a time
0:26:33 > 0:26:39and did a bake-off, tried to pick the top three and, basically,
0:26:39 > 0:26:41competitive tension did the rest for us.
0:26:42 > 0:26:46Most of those airports had never seen anything like it in the past,
0:26:46 > 0:26:49but the prospects of them getting a daily flight to London
0:26:49 > 0:26:52was just far too mouth-watering for them to ignore it.
0:27:00 > 0:27:03Next, Ryanair developed a cunning scheme to make its network
0:27:03 > 0:27:07of obscure airports sound more important - by renaming them.
0:27:07 > 0:27:09If you wanted
0:27:09 > 0:27:12Beauvais, for example, which is outside Paris,
0:27:12 > 0:27:15to be designated as a Paris airport,
0:27:15 > 0:27:20then the airlines that flew there had to vote for it to be such.
0:27:23 > 0:27:26Since Ryanair was often the only airline at many of these airports,
0:27:26 > 0:27:29the votes went Ryanair's way.
0:27:31 > 0:27:34Small airports suddenly got grander.
0:27:34 > 0:27:39And so Beauvais became Paris, Charleroi became Brussels,
0:27:39 > 0:27:43Prestwick became Glasgow and we developed
0:27:43 > 0:27:47a pretty unique way of, again, circumventing the status quo
0:27:47 > 0:27:50while the other airlines were fast asleep.
0:27:56 > 0:27:59So, how do airlines make money from low fares?
0:28:00 > 0:28:04At Ryanair, it's a strategy of pile it high and sell it cheap.
0:28:05 > 0:28:07Howard Millar is one of the company's
0:28:07 > 0:28:11deputy chief executives, and its chief accountant.
0:28:11 > 0:28:15- How are you? Good to see you. - Good to see you as well.
0:28:15 > 0:28:20Our objective is to keep our planes full as much of the time as we possibly can.
0:28:20 > 0:28:23So to that end we are always aggressively targeting
0:28:23 > 0:28:27the maximum number of bums on seats on every flight.
0:28:27 > 0:28:30We're less worried about what the average passenger pays
0:28:30 > 0:28:33on the basis that we've a very low break-even load factor.
0:28:33 > 0:28:38And the fact that every passenger spends about 13 euros on
0:28:38 > 0:28:40other things such as hotels, car hires, etc.
0:28:42 > 0:28:47Ryanair's average fare is £40, but that additional revenue,
0:28:47 > 0:28:53including in-flight sales, brings the total per passenger up to £52,
0:28:53 > 0:28:55excluding air passenger taxes.
0:28:56 > 0:28:59On the cost side, fuel comes to £20.
0:28:59 > 0:29:02And, here's where being a low cost airline really counts.
0:29:02 > 0:29:05Everything else, including the staff, the planes,
0:29:05 > 0:29:07airport charges and financing,
0:29:07 > 0:29:09comes to £26.
0:29:11 > 0:29:14Which means there's a profit per passenger of £6.
0:29:22 > 0:29:27Keeping costs low enough to make a profit on low fares is hard work.
0:29:29 > 0:29:32For staff in Ryanair's old, cramped offices,
0:29:32 > 0:29:36it means a battle for everything that costs money.
0:29:37 > 0:29:40There is a head of stationery, and you go upstairs
0:29:40 > 0:29:42and you request whatever item you want
0:29:42 > 0:29:46and you are usually cross-examined as to whether you actually need them
0:29:46 > 0:29:51and if it's a pen, you're encouraged to go to the local hotel and get them.
0:29:51 > 0:29:56And if it's staples, they are given out by line rather than box. So...
0:29:56 > 0:30:00I do ban us buying biros for the staff in Ryanair,
0:30:00 > 0:30:04and I'm happy to supply hotel pens whenever I can.
0:30:04 > 0:30:08I can give you the pen from the DeSilva hotel in Katowice.
0:30:12 > 0:30:15O'Leary keeps tabs on the bigger items from his desk
0:30:15 > 0:30:17at the end of the office.
0:30:19 > 0:30:23Every Monday at 8.30, senior management is summoned.
0:30:25 > 0:30:29You had a list of items to complete.
0:30:29 > 0:30:32You had a date beside them when the items were given to you.
0:30:32 > 0:30:34If you haven't achieved what's on the list,
0:30:34 > 0:30:36then you're in big trouble.
0:30:36 > 0:30:41And people had their shit together on Monday morning, that's for sure.
0:30:44 > 0:30:47O'Leary adopted the practice from his mentor, Tony Ryan,
0:30:47 > 0:30:50along with some of Ryan's personal style.
0:30:51 > 0:30:53Razor-sharp mind, he's a razor-sharp mouth
0:30:53 > 0:30:58and he had the ability to decimate somebody fairly quickly
0:30:58 > 0:31:02if they weren't thinking in the right direction.
0:31:02 > 0:31:05It was always going to be somebody's turn,
0:31:05 > 0:31:08and if the hate beam came in your direction,
0:31:08 > 0:31:10it wasn't a very pleasant experience.
0:31:12 > 0:31:16The word is that you're pretty aggressive at those meetings.
0:31:16 > 0:31:19I think, you know, some of that is sort of,
0:31:19 > 0:31:21what do you call it? Water-font talk.
0:31:21 > 0:31:25I think we try to have a very open culture in Ryanair.
0:31:25 > 0:31:28I will be critical of people who don't accomplish what they are supposed to accomplish.
0:31:28 > 0:31:31But people are equally critical of me.
0:31:31 > 0:31:34And we, I think, try to foster a culture in Ryanair where I think
0:31:34 > 0:31:37the person that gets criticised most at the Monday morning meetings is me.
0:31:37 > 0:31:40HE LAUGHS
0:31:42 > 0:31:45I don't think so.
0:31:45 > 0:31:50Maybe he saw it that way, but no, I think it was pretty one-way traffic.
0:31:50 > 0:31:53Is it true that you have been reduced to tears in that meeting?
0:31:53 > 0:31:55Yeah, initially.
0:31:55 > 0:31:59I suppose I've been in that meeting for ten years now, so I didn't like
0:31:59 > 0:32:03the kind of loudness of some elements of the meeting.
0:32:03 > 0:32:07But yes, I've... I can't remember the last time I cried in a meeting.
0:32:07 > 0:32:12We've had a few shouts and storming out, but they are very interesting.
0:32:12 > 0:32:14I don't think she's unique.
0:32:14 > 0:32:17I think there'd be quite a few people, grown men included.
0:32:18 > 0:32:22I mean... Nobody, to my knowledge, has ever cried
0:32:22 > 0:32:25at a Monday morning management meeting, including myself.
0:32:25 > 0:32:29But, you know, we don't hang around, we don't have this...
0:32:29 > 0:32:33We don't hold hands and sing the company song.
0:32:34 > 0:32:38Despite being on the receiving end of O'Leary's anger,
0:32:38 > 0:32:42many of his managers have continued working with him for years.
0:32:42 > 0:32:46You could have had the worst gouging of your life
0:32:46 > 0:32:49at 9.30 in the morning, and by 11.30 he'd be
0:32:49 > 0:32:52sitting in your office having a cup of coffee.
0:32:53 > 0:32:55He's not out there to upset people,
0:32:55 > 0:32:58but it's certainly a life experience,
0:32:58 > 0:33:01and I've developed hugely as a manager because of Michael.
0:33:06 > 0:33:10By 1998, four years after O'Leary took over,
0:33:10 > 0:33:13Ryanair was making solid profits.
0:33:13 > 0:33:15Just wait for the rest.
0:33:15 > 0:33:18O'Leary had done well personally, too, after negotiating with
0:33:18 > 0:33:22Tony Ryan for almost a quarter of the company's shares.
0:33:25 > 0:33:29Today he's thought to be worth more than £350 million.
0:33:31 > 0:33:34Do you feel like you've made enough money now?
0:33:34 > 0:33:36I made enough money a long time ago.
0:33:36 > 0:33:42- Have you made enough money? - I don't know. What is enough?
0:33:42 > 0:33:45Which credit card are you using to pay with?
0:33:45 > 0:33:46And the expiry date is?
0:33:48 > 0:33:51After the elation of easyJet's inaugural flight, there was
0:33:51 > 0:33:53a drastic fall in ticket sales.
0:33:57 > 0:33:59Stelios started getting worried.
0:33:59 > 0:34:02We were two months in, it wasn't looking good, and at that point
0:34:02 > 0:34:06Stelios pulled out his chequebook and said, "Spend, spend, spend."
0:34:06 > 0:34:07In fact, I think he said,
0:34:07 > 0:34:10"Spend a million pounds this week or you're fired."
0:34:10 > 0:34:14In one moment I'll give you a confirmation reference for this flight, OK?
0:34:14 > 0:34:18Anderson splurged a couple of million in six weeks, producing
0:34:18 > 0:34:23a blitz of orange advertising in the press and on television.
0:34:23 > 0:34:27Well, I mean, is two million quid a lot of money or not? I don't know.
0:34:27 > 0:34:30I'm afraid they have all been booked up on that date.
0:34:30 > 0:34:33It was part of launching a company, you know, you had to do it.
0:34:33 > 0:34:35Do you have another date in mind?
0:34:35 > 0:34:37When you spend those sorts of sums of money,
0:34:37 > 0:34:39you expect an effect and we got an effect.
0:34:39 > 0:34:41The public responded, the public got the message,
0:34:41 > 0:34:44people could see that we had substance.
0:34:51 > 0:34:54With easyJet making a splash and Ryanair already established,
0:34:54 > 0:34:58the big airlines started getting interested in these new rivals.
0:34:59 > 0:35:01It was the first time
0:35:01 > 0:35:05we got some acknowledgement of the business model.
0:35:05 > 0:35:08Until that moment the discussion was,
0:35:08 > 0:35:12"Well, these things don't really work, they're not really safe,
0:35:12 > 0:35:16"how can they do it for such a low price? Are they maintaining the aircraft?"
0:35:16 > 0:35:20So we went from rubbishing the concept basically,
0:35:20 > 0:35:24to saying, "It is a valid business model, and we're going to copy it."
0:35:24 > 0:35:27British Airways appointed one of its star executives,
0:35:27 > 0:35:31Barbara Cassani, to create BA's own budget airline.
0:35:32 > 0:35:34She began by studying the competition.
0:35:36 > 0:35:41We felt that Ryanair was... I mean, I call it a flying pub.
0:35:42 > 0:35:44It was just all, kind of,
0:35:44 > 0:35:48chaotic and a little bit dehumanising to customers.
0:35:48 > 0:35:50And easyJet was too orange to my taste.
0:35:50 > 0:35:54I thought, "How much orange can one person take?"
0:35:57 > 0:36:00British Airways' own budget airline, Go, was born.
0:36:02 > 0:36:06Stelios took British Airways to court, claiming Go had copied easyJet,
0:36:06 > 0:36:10and was trying to put his airline out of business.
0:36:13 > 0:36:16Take nothing away from easyJet, but I didn't copy them.
0:36:16 > 0:36:21And in fact, what we did was we looked at all of the low-cost airlines,
0:36:21 > 0:36:26Southwest in the US, as well as Ryanair and easyJet, etc, and we created our own.
0:36:26 > 0:36:30Gate number is number 14, boarding time for the flight is 8.30.
0:36:34 > 0:36:39On Go's inaugural flight, it was Stelios who had the last laugh.
0:36:39 > 0:36:40I was wandering around the call centre,
0:36:40 > 0:36:44as the folks were taking bookings, and one of them came over to me
0:36:44 > 0:36:47and said, "You won't believe who I've just taken a booking for."
0:36:53 > 0:36:57Stelios had booked ten seats for himself and other easyJet staff.
0:37:02 > 0:37:05Somebody called the police and the police just laughed.
0:37:05 > 0:37:09We got on the flight and Stelios walked up and down the aisle
0:37:09 > 0:37:11talking to the passengers.
0:37:11 > 0:37:15We decided to give away free easyJet flights to the passengers of Go.
0:37:15 > 0:37:17And I think that took the edge out of it
0:37:17 > 0:37:21because you're giving people something for free, they take it. They enjoy it.
0:37:27 > 0:37:31After a couple of years, Cassani's Go started making money,
0:37:31 > 0:37:34but it never got a chance to prove itself.
0:37:34 > 0:37:38BA sold it to venture capitalists, who, in turn,
0:37:38 > 0:37:42couldn't resist the offer made to them by...
0:37:42 > 0:37:44none other than Stelios.
0:37:45 > 0:37:47All the stars aligned for easyJet
0:37:47 > 0:37:52and they very shrewdly took out their most effective competitor.
0:37:52 > 0:37:55By allowing Go and easyJet to be merged,
0:37:55 > 0:37:59BA really created a huge competitor for itself,
0:37:59 > 0:38:02which was most unfortunate,
0:38:02 > 0:38:06and I think the British flying public lost a great product.
0:38:08 > 0:38:12To Ryanair, with its separate network of smaller airports,
0:38:12 > 0:38:15Go was less of a threat than an entertaining sideshow.
0:38:16 > 0:38:20I never cease to be amazed at the spectacular capacity of, you know,
0:38:20 > 0:38:24legacy flag carrier airlines to screw it up.
0:38:26 > 0:38:28- You have no bags you are checking in, no?- No.
0:38:28 > 0:38:30That's fine, you can go directly to security.
0:38:32 > 0:38:36Low cost airlines have reversed the traditional pricing of air tickets.
0:38:37 > 0:38:41In the past, if you waited till the last minute you might get
0:38:41 > 0:38:43a standby ticket at a bargain price.
0:38:45 > 0:38:47Boarding will be at 1 o'clock
0:38:47 > 0:38:49and security straight down the end of the hall.
0:38:49 > 0:38:52Today, the longer you leave it, the higher the price.
0:38:54 > 0:38:58Ryanair aims to sell at least 80% of its seats.
0:39:00 > 0:39:04Say we launch a route in January and the first flights were in June,
0:39:04 > 0:39:07we will monitor the bookings each month as we go along
0:39:07 > 0:39:09and in order to have 80% of the seats sold
0:39:09 > 0:39:12by the time the first flight is flown,
0:39:12 > 0:39:16we will know four to five months out from the experience
0:39:16 > 0:39:18of similar routes that we've had over a number of years
0:39:18 > 0:39:21that we need to have 5% sold by the end of January,
0:39:21 > 0:39:2315% by the end of February and so on.
0:39:26 > 0:39:30We will know whether we are over or below that target,
0:39:30 > 0:39:33and if we are above it, we can increase the fares,
0:39:33 > 0:39:35because we need to slow down the rate of booking,
0:39:35 > 0:39:38or if we are below it, we need to reduce the fares.
0:39:43 > 0:39:44We tracked the prices of
0:39:44 > 0:39:47three flights from London to Berlin.
0:39:47 > 0:39:48As the flight date approaches,
0:39:48 > 0:39:50fares rise.
0:39:50 > 0:39:51But when a flight isn't
0:39:51 > 0:39:53selling well enough,
0:39:53 > 0:39:55prices are cut to increase sales.
0:39:56 > 0:39:58In the last few days before the flights,
0:39:58 > 0:40:01the British Airways fare rose dramatically,
0:40:01 > 0:40:04leaving Ryanair the cheapest, with easyJet in the middle.
0:40:06 > 0:40:08BELL CHIMES
0:40:14 > 0:40:17C'est tous les bijoux que je fabrique moi-meme.
0:40:17 > 0:40:22Brenda Henderson is from Surrey, but she's moved to Excideuil,
0:40:22 > 0:40:25a small town in south-west France.
0:40:26 > 0:40:29Lovely countryside, lovely people, lovely food.
0:40:32 > 0:40:35Brenda is one of many British expats in the region.
0:40:35 > 0:40:38There's areas that are almost like a little England,
0:40:38 > 0:40:41with lots of activities, lots of enjoyable things,
0:40:41 > 0:40:44and I'm sure that community wouldn't have been as large
0:40:44 > 0:40:46if we weren't near an airport
0:40:46 > 0:40:49and the low-cost airlines weren't available.
0:40:55 > 0:41:00At nearby Limoges airport, 80% of the traffic is to and from the UK.
0:41:02 > 0:41:05Passenger numbers have trebled in the past ten years,
0:41:05 > 0:41:07and the French talk about a revitalisation of the area
0:41:07 > 0:41:10thanks to the British.
0:41:11 > 0:41:15Excideuil even boasts its own English cafe.
0:41:15 > 0:41:17If the low-cost airlines weren't around,
0:41:17 > 0:41:19my business would definitely suffer.
0:41:19 > 0:41:22For example, there are lots of Brits who have second homes here,
0:41:22 > 0:41:24so they will often pop out for the weekend.
0:41:24 > 0:41:28We wouldn't see them, I don't think, if they had to drive each time just for a few days.
0:41:30 > 0:41:34Sheila Pickering moved to France more than 20 years ago,
0:41:34 > 0:41:38before you could fly cheaply between England and Limoges.
0:41:38 > 0:41:42It's really changed family life because they can just pop over.
0:41:42 > 0:41:46The family can pop over if we're having an anniversary.
0:41:46 > 0:41:50They can pop over for the weekend. This would never have happened before.
0:41:50 > 0:41:52Gone are the days when it cost you,
0:41:52 > 0:41:55to go to the South of France, £500.
0:41:55 > 0:41:59Those times have gone. We're moving on,
0:41:59 > 0:42:01and we're moving on very, very fast.
0:42:03 > 0:42:07I think the greatest contribution of the concept of the low-cost airline in Europe,
0:42:07 > 0:42:10at its most idealistic, if you like, is that it creates
0:42:10 > 0:42:14an environment where people can cross borders easily and frequently.
0:42:14 > 0:42:17Tous les jeunes comme moi alors...
0:42:17 > 0:42:20However bold it may sound, it promotes peace.
0:42:20 > 0:42:22BELL CHIMES
0:42:22 > 0:42:25If the low cost revolution has led to peace,
0:42:25 > 0:42:27it's only been achieved through conflict.
0:42:28 > 0:42:30- O'LEARY:- I've been told and it's no lie.
0:42:30 > 0:42:32ALL: I've been told and it's no lie.
0:42:32 > 0:42:35- O'LEARY:- EasyJet's fares are far too high.
0:42:35 > 0:42:37ALL: EasyJet's fares are far too high.
0:42:42 > 0:42:45Ryanair and easyJet have argued over which is the cheapest.
0:42:45 > 0:42:48Ryanair has always admitted it chases controversy
0:42:48 > 0:42:51as an alternative to paid publicity.
0:42:58 > 0:43:01The core of our marketing strategy is always to spend
0:43:01 > 0:43:03as little money as possible advertising.
0:43:03 > 0:43:05We don't have an advertising agency,
0:43:05 > 0:43:06we don't use any advertising agencies.
0:43:06 > 0:43:08We design them all ourselves.
0:43:08 > 0:43:10We have a group of young kids who get together once or twice a week
0:43:10 > 0:43:12and come up with ideas for new ads.
0:43:12 > 0:43:17And the more controversial, the funnier, the more humorous they are, the better.
0:43:20 > 0:43:24A classic Ryanair ad featured the Pope whispering to a nun
0:43:24 > 0:43:26the fourth secret of Fatima.
0:43:26 > 0:43:30Ryanair paid for it to appear in just one newspaper.
0:43:32 > 0:43:35That ad went all over the world, kind of annoyed a lot of people,
0:43:35 > 0:43:38offended some Catholics, and it was seen as, you know,
0:43:38 > 0:43:42a really cheeky, and pushing the boat out,
0:43:42 > 0:43:44but for the publicity it garnered
0:43:44 > 0:43:49it was probably the best ad Ryanair has ever placed in its history.
0:43:51 > 0:43:55The idea that all publicity is good publicity was tested
0:43:55 > 0:43:59to destruction by Ryanair in a story that began happily enough.
0:43:59 > 0:44:03The winner is Miss J O'Keeffe.
0:44:03 > 0:44:07APPLAUSE
0:44:09 > 0:44:14In 1988, Ryanair gave a prize to its one millionth passenger.
0:44:14 > 0:44:17Jane O'Keeffe was a secretary from Dublin.
0:44:17 > 0:44:20I was sitting up in the bar with my sister and I said, "No way will I win this.
0:44:20 > 0:44:23"I've never won a thing in my life, and I won't win this time."
0:44:23 > 0:44:27- You're trembling. Is it the drink or the excitement?- I think it's a bit of both.
0:44:30 > 0:44:34The generous prize was free flights for life on Ryanair.
0:44:36 > 0:44:40For almost ten years, O'Keeffe made modest use of her free flights.
0:44:41 > 0:44:46Then one day, she found Ryanair wouldn't book another flight for her.
0:44:46 > 0:44:48O'Leary was now in charge.
0:44:50 > 0:44:53Michael said, "I'm not having any more of this.
0:44:55 > 0:44:57"You're to stop her free flights."
0:44:57 > 0:45:00So yours truly was dispatched to take the free flights for life
0:45:00 > 0:45:03off the person who had won free flights for life.
0:45:03 > 0:45:06You can imagine what a thankless task that was.
0:45:10 > 0:45:13O'Leary's objection was that there was no formal agreement between
0:45:13 > 0:45:17Ryanair and O'Keeffe to support her claim to free flights for life.
0:45:20 > 0:45:24Here's the free flights for life. Well, what does that actually mean?
0:45:24 > 0:45:25Is it documented? No.
0:45:25 > 0:45:29She had nothing in writing to evidence the prize
0:45:29 > 0:45:32other than some interview on an Irish TV station.
0:45:33 > 0:45:35O'Keeffe sued Ryanair.
0:45:35 > 0:45:37And in Dublin's High Court,
0:45:37 > 0:45:40she claimed O'Leary had shouted at her on the phone.
0:45:41 > 0:45:44Mr Justice Peter Kelly found Ryanair had
0:45:44 > 0:45:46breached its contract with her.
0:45:46 > 0:45:49Jane O'Keeffe, he said, was clear in her recollection
0:45:49 > 0:45:50and was a more persuasive witness
0:45:50 > 0:45:53than the airline chief executive Michael O'Leary.
0:45:53 > 0:45:55I can only reiterate what I said in court -
0:45:55 > 0:45:58I was shabbily treated by them, and the judgement has vindicated me.
0:46:00 > 0:46:03O'Keeffe won £43,000 in compensation.
0:46:05 > 0:46:08The High Court row with the one millionth passenger was
0:46:08 > 0:46:12a disaster for Ryanair, and it kind of exposed for the first time, I suppose,
0:46:12 > 0:46:16how rotten they could be to customers and how ruthless they were.
0:46:16 > 0:46:20We looked bad, we were bad, we looked in the wrong, we were in the wrong,
0:46:20 > 0:46:24but there were whole pages of publicity about Ryanair
0:46:24 > 0:46:27and so as far as we were concerned, it was another case of,
0:46:27 > 0:46:30win, lose or draw, a court case is good news.
0:46:30 > 0:46:33- Where are you going today? - Oklahoma City.
0:46:33 > 0:46:36The next one is at 3.10. We can put you on that one.
0:46:36 > 0:46:39Ryanair was inspired by SouthWest airlines...
0:46:39 > 0:46:43Check in at gate number four, to get your boarding card.
0:46:43 > 0:46:46..after the visit to the States that had so influenced the young O'Leary.
0:46:48 > 0:46:52But there's one part of the SouthWest formula he didn't pick up on.
0:46:52 > 0:46:54I love customers.
0:46:56 > 0:47:00We just enjoy each other. We really do, and love each other.
0:47:00 > 0:47:03We'd much rather have a company that was bound by love rather than
0:47:03 > 0:47:04one that was bound by hate.
0:47:06 > 0:47:09I think one of the greatest slogans we ever had was,
0:47:09 > 0:47:12"We smile because we want to, not because we have to."
0:47:12 > 0:47:15- HE LAUGHS - Wham!
0:47:18 > 0:47:22O'Leary believed he didn't need that kind of thing at Ryanair.
0:47:24 > 0:47:27I think that a lot of the peace and love at SouthWest
0:47:27 > 0:47:31is very much a cultural phenomenon, particularly in the Southern states,
0:47:31 > 0:47:35in the US, where you go to MacDonald's and you go to restaurants and it's,
0:47:35 > 0:47:38"Have a nice day, y'all, missin' you, come back and see us again sometime."
0:47:38 > 0:47:42That kind of schlock doesn't work here in Europe.
0:47:42 > 0:47:45Tonight on Watchdog, the boss of Ryanair who says he wishes
0:47:45 > 0:47:48he could charge extra for fat people and to use the loo.
0:47:51 > 0:47:54Budget airlines, like the schlock-free Ryanair,
0:47:54 > 0:47:56are a gift to consumer journalism.
0:47:57 > 0:48:01The BBC's Watchdog gets more than one complaint a day about easyJet
0:48:01 > 0:48:04and the same for Ryanair...
0:48:05 > 0:48:07..usually about unexpected charges.
0:48:09 > 0:48:12Hello and good evening and welcome to Watchdog...
0:48:12 > 0:48:14So many people get caught out and it's very common
0:48:14 > 0:48:19for the complaints to end with "I will never fly with them again
0:48:19 > 0:48:23"and I want to warn anybody else not to make the same mistake we did."
0:48:23 > 0:48:26Michael O'Leary, the Ryanair boss, has been listening to all that.
0:48:26 > 0:48:31As long as you're talking about us, Anne, I know we're doing a good job.
0:48:31 > 0:48:34OK, you've done away with check-in desks, what's next?
0:48:34 > 0:48:38In many ways, Michael O'Leary is a journalist's and a broadcaster's dream
0:48:38 > 0:48:40because he just comes out with fantastic quotes.
0:48:40 > 0:48:43But I think all of us have to be aware that he's very media savvy
0:48:43 > 0:48:45and he will use us for his own ends.
0:48:45 > 0:48:48If you like high fares, don't book Ryanair.
0:48:48 > 0:48:52If you want the guaranteed lowest fares in Europe, fly Ryanair.
0:48:52 > 0:48:54It's a very good commercial.
0:48:54 > 0:48:57Now, welcome to our very special Ryanair flight.
0:48:57 > 0:48:58I'm sorry it's a bit cramped.
0:48:58 > 0:49:02O'Leary makes journalists' jobs easy by coming up with stories
0:49:02 > 0:49:06that write themselves, whether or not they're true.
0:49:06 > 0:49:10We are, as you know, working hard on a plan to charge for the toilets.
0:49:10 > 0:49:13Myself and Mike were in London and we arrived into Gatwick
0:49:13 > 0:49:16and Michael needed to use the bathroom.
0:49:16 > 0:49:18Of course we had no money, no change so we had to go
0:49:18 > 0:49:21and buy a can of Coke in order to get the money
0:49:21 > 0:49:24and of course somebody asked him about hidden charges.
0:49:24 > 0:49:27And he said, "Well, actually, I'll tell you about hidden charges,
0:49:27 > 0:49:29"I'm going to charge to go to the bathroom."
0:49:29 > 0:49:34And of course, if Michael says something like that, the media coverage is absolutely enormous.
0:49:34 > 0:49:37So it's not what actually the message is, it's the fact that
0:49:37 > 0:49:40you are in the media generating lots of free publicity
0:49:40 > 0:49:44that we're using ultimately to convert into substantial profits.
0:49:46 > 0:49:50Caroline Green has to deal with the fallout from O'Leary's remarks.
0:49:50 > 0:49:52He might make a comment in the press,
0:49:52 > 0:49:55whether it's putting porn on the aircraft
0:49:55 > 0:50:00or paying for the toilets, or some other... Standing up on aircraft.
0:50:00 > 0:50:03People think they're ridiculous, but they do believe it, to a certain extent.
0:50:03 > 0:50:06But we all know that's what Michael is, and, you know, I would
0:50:06 > 0:50:11prefer if some of the comments weren't made, but that's publicity.
0:50:14 > 0:50:18We asked O'Leary to clear up, once and for all, some of the myths.
0:50:19 > 0:50:22- You want to charge people to use the toilet?- False.
0:50:22 > 0:50:25You want to have people standing up at the back of the plane?
0:50:25 > 0:50:26No, it's never been a plan.
0:50:26 > 0:50:29- Would you like to charge fat people more?- No.
0:50:29 > 0:50:34Is there a rule against Ryanair staff charging their personal mobiles in the office?
0:50:34 > 0:50:36Yes, it's one of the great PR initiatives.
0:50:36 > 0:50:38Does anybody obey the ban?
0:50:38 > 0:50:40No, they all charge up their mobile phones.
0:50:40 > 0:50:43But it makes for great PR - we're so focussed on not wasting money
0:50:43 > 0:50:46that we don't even allow people to charge up their mobile phones.
0:50:59 > 0:51:02Today, easyJet is launching a new route to Moscow.
0:51:03 > 0:51:06While they've always been seen as rivals,
0:51:06 > 0:51:09easyJet and Ryanair mostly fly to different airports
0:51:09 > 0:51:13and only compete directly on a small proportion of routes.
0:51:15 > 0:51:17Now they're diverging even more.
0:51:17 > 0:51:20EasyJet wants to appeal to business travellers.
0:51:22 > 0:51:25Russia's outside the deregulated EU,
0:51:25 > 0:51:27so this route needed government approval.
0:51:31 > 0:51:34What was really good was that we were awarded this
0:51:34 > 0:51:38and I think it showed that we have the credibility to fly the route
0:51:38 > 0:51:41and it is predominantly a business route.
0:51:41 > 0:51:44So I thought it said quite a lot about easyJet today.
0:51:46 > 0:51:50Carolyn MacCall is making the most of it with a press trip on the inaugural flight.
0:51:53 > 0:51:57Last year, easyJet started offering assigned seats instead of
0:51:57 > 0:52:01the usual low cost practice of finding a seat when you board.
0:52:01 > 0:52:05MacCall denies she's making easyJet more like a traditional airline,
0:52:05 > 0:52:08and moving away from the low cost model.
0:52:12 > 0:52:17We are completely a low-cost airline in our operating model.
0:52:17 > 0:52:21Completely. We are also a low fares airline to the passenger.
0:52:21 > 0:52:24So, what I think a passenger doesn't say is
0:52:24 > 0:52:27"I'm going to fly a low-cost airline today."
0:52:27 > 0:52:29They just don't use that terminology.
0:52:29 > 0:52:33They think, "Yeah, low fares, good value, great service. I'm off.
0:52:33 > 0:52:34"I'll try easyJet."
0:52:37 > 0:52:39Back in Moscow, easyJet's party of journalists
0:52:39 > 0:52:43and businesspeople are entertained at a local restaurant.
0:52:44 > 0:52:48The highlight is a performance by a couple of easyJet cabin crew.
0:52:49 > 0:52:53# We flew here to Moscow Flight 8401
0:52:53 > 0:52:57# We're known as Pearl and Dean
0:52:57 > 0:53:00# Que sera, sera
0:53:00 > 0:53:05# Whatever will be, will be
0:53:05 > 0:53:09# The future's not ours to see
0:53:09 > 0:53:14# Que sera, sera. #
0:53:14 > 0:53:18APPLAUSE AND CHEERING
0:53:18 > 0:53:21If things appear to be going well for easyJet,
0:53:21 > 0:53:25it's despite a long-running battle over different visions of its future.
0:53:27 > 0:53:32Surprisingly, it's easyJet's founder who's sceptical about how much more can be achieved.
0:53:34 > 0:53:39He's worried that rising fares caused by rising fuel prices
0:53:39 > 0:53:43and higher charges by airports are eroding the company's profitability.
0:53:44 > 0:53:47The available opportunity to grow this business must have
0:53:47 > 0:53:50gone down because the costs have gone up.
0:53:50 > 0:53:52As easyJet's biggest shareholder,
0:53:52 > 0:53:55he wants to stop the company buying new planes.
0:53:57 > 0:54:00Every airline at the end of the day goes bust because it buys
0:54:00 > 0:54:02one aircraft too many that flies on one unprofitable route.
0:54:02 > 0:54:07And multiply that by 150, and you end up like Pan American, TWA
0:54:07 > 0:54:09and other great names of the sky.
0:54:11 > 0:54:15Stelios's fears are at odds with easyJet's management.
0:54:15 > 0:54:19For the airline not to buy any more planes, we would be in decline
0:54:19 > 0:54:22and we believe that we can continue to grow, as I said,
0:54:22 > 0:54:25to grow profitably and to deliver returns to shareholders.
0:54:34 > 0:54:38Welcome, easyJet, for their first flight and more opportunities
0:54:38 > 0:54:41for more Russians to come and see more of Britain.
0:54:46 > 0:54:50So how much more scope is there for low-cost airlines to grow?
0:54:50 > 0:54:52That's great, hold that there, thank you.
0:54:52 > 0:54:58Well, while the average Brit now makes more than three short haul flights a year,
0:54:58 > 0:55:00in France, it's less than two,
0:55:00 > 0:55:04and in Poland it's less than one flight every two years.
0:55:04 > 0:55:06Carolyn, down here, please.
0:55:06 > 0:55:10So, if the rest of Europe starts flying as much as the British,
0:55:10 > 0:55:13low-cost airlines should continue to do well.
0:55:16 > 0:55:19But Stelios has his doubts.
0:55:19 > 0:55:24I mean, some of these countries that display a very low propensity
0:55:24 > 0:55:28to travel is because they live in a very beautiful country in the first place.
0:55:28 > 0:55:29Remember, you live in the UK,
0:55:29 > 0:55:34and you're conditioned over the last three or four decades that
0:55:34 > 0:55:37holiday means getting on an aeroplane and going to the sun, mostly,
0:55:37 > 0:55:40away from your country, because your country doesn't have sun.
0:55:40 > 0:55:43But this doesn't happen in the South of France and in Spain and Portugal.
0:55:43 > 0:55:45They live in the sun already.
0:55:45 > 0:55:51Despite Stelios's fears, easyJet's announced plans to order 135 new planes from Airbus.
0:55:51 > 0:55:56But McCall says the battle of the low-cost airlines is about customers.
0:55:56 > 0:55:59The difference between easyJet and Ryanair is that we have
0:55:59 > 0:56:02really good service on board and on the ground
0:56:02 > 0:56:06and we care about our passengers. There's a big difference there.
0:56:06 > 0:56:09You don't think Ryanair cares about their passengers?
0:56:09 > 0:56:10I'll leave you to judge that.
0:56:11 > 0:56:14I think we're the airline that people love to hate.
0:56:14 > 0:56:19You know, there's the sensationalism that comes out of Michael's interactions with the press,
0:56:19 > 0:56:23but underneath the covers we're an incredibly efficient airline.
0:56:23 > 0:56:29We're today announcing and celebrating four new routes here at Katowice...
0:56:29 > 0:56:34As a business, Ryanair is now valued at £7 billion -
0:56:34 > 0:56:37more than both easyJet and British Airways.
0:56:40 > 0:56:44The strategy remains what it's been since O'Leary took over.
0:56:46 > 0:56:50We cannot offer low fares without having a really low cost base.
0:56:50 > 0:56:53So that means that if we have to get up in the morning
0:56:53 > 0:56:54and have a fight with everybody, we will.
0:56:54 > 0:56:57We are absolutely determined to do that.
0:56:57 > 0:57:02Any of the carriers that we have seen that have failed
0:57:02 > 0:57:05have all lost one thing - they lost control of their cost base.
0:57:05 > 0:57:07And you do that in this industry at your peril.
0:57:07 > 0:57:09This is a very, very competitive industry,
0:57:09 > 0:57:14very, very capital intensive, and if you are not in control of your cost base,
0:57:14 > 0:57:16you've got lots of problems coming your way.
0:57:20 > 0:57:24In April, Ryanair demonstrated its confidence in the future with
0:57:24 > 0:57:28an order for 175 new planes from Boeing.
0:57:29 > 0:57:34I still have this vision that, in time, the flights will be free,
0:57:34 > 0:57:37but we'll get paid for all the other optional services around.
0:57:37 > 0:57:40Now, we're not quite at that level yet,
0:57:40 > 0:57:43but you can really begin to say to people around the UK and Europe,
0:57:43 > 0:57:44"Your flight will cost 20 quid.
0:57:44 > 0:57:47"In five years' time, it will cost ten quid.
0:57:47 > 0:57:49"And then in ten years' time it might cost 5 quid."
0:57:49 > 0:57:53Then we'll be carrying 500 million passengers. And why not?
0:57:55 > 0:57:58A realistic ambition from one of the most successful
0:57:58 > 0:58:03executives in the business - or just another piece of O'Leary spin?
0:58:03 > 0:58:04You decide.
0:58:07 > 0:58:10- How many more cities today, then? - Two more cities today.
0:58:10 > 0:58:13We do... Next is Wroclaw, and then back home to Dublin.
0:58:13 > 0:58:16Should be back in the office by about 4 o'clock.
0:58:16 > 0:58:18And then the day's work has to start.
0:58:20 > 0:58:22All the best.
0:58:34 > 0:58:37Subtitles by Red Bee Media Ltd