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That is due to Central Engineering work that is taking place. It is | :00:06. | :00:14. | |
now time for HARDtalk. The aviation business is in a mess. | :00:14. | :00:18. | |
Fuel prices have increased, passenger numbers are squeezed and | :00:18. | :00:23. | |
a number of airlines have gone out of business. But one airline has | :00:23. | :00:31. | |
bucked the trend. That is why any error, which last year pulled in | :00:31. | :00:37. | |
almost 80 million passengers. -- Rainier. My guest tonight is | :00:38. | :00:42. | |
Michael O'Leary. He has become the anti- hero of the airline's | :00:42. | :00:52. | |
:00:52. | :01:00. | ||
business. But how far can he fly before he gets shut down? | :01:00. | :01:05. | |
Michael O'Leary, welcome to HARDtalk. It is a pleasure to be | :01:06. | :01:10. | |
back. Your business is doing pretty well all stop your profits are up | :01:10. | :01:15. | |
and passenger numbers are looking pretty good. How close are you to | :01:15. | :01:20. | |
the limits of how far you can go? think we have barely scratched the | :01:20. | :01:26. | |
surface. Over the next ten years we would like to see passenger numbers | :01:27. | :01:33. | |
double to around 160 million passengers. We would like to go | :01:33. | :01:38. | |
across the UK and across continental Europe. It is limitless. | :01:38. | :01:42. | |
A but the message from the aviation industry generally, and | :01:42. | :01:50. | |
particularly in Europe, is to find growth you have to consolidate. | :01:50. | :01:58. | |
Look at various other groups. They had tried to maximise their place | :01:58. | :02:03. | |
in the industry by consolidation. Is that what he will have to do? | :02:03. | :02:13. | |
:02:13. | :02:13. | ||
do not think so. The industry has two different types of carriers. | :02:13. | :02:23. | |
:02:23. | :02:23. | ||
You have the ones that need people to connect. You will inevitably go | :02:23. | :02:31. | |
with those ones. but it is expensive and not punctual. If you | :02:31. | :02:36. | |
want to get there for a patching of the price, you go with us. You say | :02:36. | :02:42. | |
they too can grow without limits in Europe and taking on other airlines, | :02:42. | :02:48. | |
so why are you so keen to purchase Ireland's national airline? You | :02:48. | :02:57. | |
will not let it go. We will carry 80 million passengers. They will | :02:57. | :03:07. | |
:03:07. | :03:08. | ||
carry around 9 million passengers. Their legacy, nobody wants it. | :03:08. | :03:18. | |
:03:18. | :03:18. | ||
do you want it? We can grow Aer Lingus as a separate brand. They | :03:18. | :03:23. | |
already have a good brand. We think we can restructure Air Lingus and | :03:23. | :03:30. | |
put it on the path of growth. have been accused of monopoly | :03:30. | :03:36. | |
control. Is there any way you could soft and the takeover by giving | :03:36. | :03:43. | |
away groups to a point with the EU is satisfied? We are prepared to | :03:43. | :03:48. | |
give whatever the commission wants. Whatever concessions they want, we | :03:48. | :03:58. | |
:03:58. | :03:59. | ||
will give. You are prepared to give away? If need be. What we did in | :03:59. | :04:06. | |
2007, our offer was rejected. This time around, we have those terms. | :04:06. | :04:11. | |
We are hopeful that it will be approved. But we are still waiting | :04:11. | :04:15. | |
for the commission to explain why an people are allowed to buy | :04:15. | :04:23. | |
British Midland, clearly a emergent monopoly, but we have to jump | :04:23. | :04:31. | |
through hoops. The EU needs a more consistent competition policy. On | :04:31. | :04:37. | |
one occasion, we tried to rescue her Lingus and we have been shut | :04:37. | :04:46. | |
down. There has been a lot of talk that you were already negotiating | :04:47. | :04:52. | |
to get rid of your stake and make a tidy profit. We never comment on | :04:52. | :04:59. | |
speculation. Our contract will be accepted. If it is not, we will | :04:59. | :05:06. | |
appeal. We will not speculate on what we will do in the future. We | :05:07. | :05:15. | |
had to be allowed to produce their Lingus. They will be broken up and | :05:15. | :05:21. | |
disappear as a friend. Speaking about growth in a difficult | :05:21. | :05:27. | |
business, another area you have looked at is getting a stake in one | :05:27. | :05:32. | |
of Britain's growing upwards. It is part of the infrastructure of | :05:32. | :05:38. | |
airports around London. It seems to be problematic. It seems the people | :05:38. | :05:43. | |
who currently in the airport do not want you involved in any sale. | :05:43. | :05:46. | |
Despite her ambition, it seems pretty clear that you cannot be | :05:46. | :05:56. | |
part of it. That is not clear. We have been written to. We have been | :05:56. | :05:59. | |
written to in recent weeks saying that people are not prepared to | :05:59. | :06:09. | |
deal or engage with us. Any consortium that involves us. That | :06:09. | :06:16. | |
is an extraordinary decision. The Competition Commission say they | :06:16. | :06:20. | |
want a customer-focused sale process. I do not know how you can | :06:20. | :06:27. | |
exclude the largest customer. We have accepted the reality. So you | :06:27. | :06:32. | |
are backing out? We are withdrawing from the process because we do not | :06:32. | :06:38. | |
want to prevent the number of other consortiums and investors from | :06:38. | :06:44. | |
bidding. We look forward to working with whoever is the owner. We have | :06:44. | :06:54. | |
faced worse. We think it has a bad future. You know that Boris Johnson | :06:54. | :07:00. | |
is pushing very hard for a new airport on the Thames estuary. He | :07:00. | :07:04. | |
is trying to attract business support for that. Are you prepared | :07:04. | :07:11. | |
to back him? I think it is an insane idea. There has been no | :07:11. | :07:16. | |
mediation policy. -- aviation policy. What we need is the | :07:16. | :07:21. | |
multiplicity of airports. It is good for the UK and the south-east. | :07:21. | :07:26. | |
They can compete with each other. You have a massive capacity | :07:26. | :07:33. | |
constraint at each of them. The way to redress that is to build on the | :07:33. | :07:40. | |
airports that already exist. The government needs to take this and | :07:40. | :07:46. | |
say they are committed to an additional runway. They can cope | :07:46. | :07:52. | |
with additional capacity. But you still do not end up with a hub | :07:52. | :07:57. | |
airport that can compete with Singapore and elsewhere. Yes you | :07:57. | :08:04. | |
would, it would be Heathrow. Let us talk about the culture of Ryanair. | :08:04. | :08:09. | |
I think it is worth looking at the way you run your business. It is | :08:09. | :08:14. | |
fair to say that you seem to take pride in ignoring everything they | :08:14. | :08:20. | |
teach at business school about the customer being king, that care and | :08:20. | :08:24. | |
comfort about the customer being first priority. That is not the way | :08:24. | :08:29. | |
you run it. I think it is absolutely wrong. The difficulty is | :08:29. | :08:34. | |
that most businesses talk about the customer being king but provide | :08:34. | :08:38. | |
high-priced services and poor service. We think the customer is | :08:38. | :08:44. | |
king because we deliver what passengers really want. Knows so | :08:44. | :08:49. | |
charges, very low prices, the best on-time performance and low | :08:50. | :08:58. | |
complaints. To take just one example, the lady who tried to take | :08:58. | :09:04. | |
legal action against you because you charged her hundreds of pounds | :09:04. | :09:08. | |
to print out boarding passes because she was not able to do it | :09:08. | :09:13. | |
when she was in Spain. She came to the airport when she was in Spain. | :09:13. | :09:19. | |
You charge to hundreds of pounds. It was in the small print. But she | :09:19. | :09:27. | |
said that in the circumstances you did not. If the customer is truly | :09:27. | :09:33. | |
king, why did you choose to take on that woman in that situation? | :09:33. | :09:39. | |
did not choose to take on the woman. More than 99.9 % of Ryanair | :09:39. | :09:43. | |
passengers agree at the time that the chicken on the website before | :09:43. | :09:50. | |
the arrival. It is not small print. It is in big print. We send you an | :09:50. | :09:56. | |
e-mail asking people to chicken. If you do not, you have to pay 50 quid. | :09:56. | :10:06. | |
:10:06. | :10:08. | ||
The lady did not. She then arrived at the returns lounged. I am very | :10:08. | :10:13. | |
sorry. We regret that you did not comply with your agreement. That | :10:13. | :10:21. | |
means you pay the fee. What I am getting to is that the style that | :10:21. | :10:30. | |
you adopt, you said that if you mess up you have to pay up. And for | :10:30. | :10:35. | |
you that seems to work. What works for us is that we are very | :10:35. | :10:40. | |
sympathetic and we have simple policies. Do not show up asking for | :10:40. | :10:49. | |
a free gin and tonic. To not arrive with a cheque in back if you do not | :10:49. | :10:55. | |
have a ticket for it. When and 99% of passengers comply with these | :10:55. | :11:02. | |
rules. What we say to the 0.1% is to not expect us to break the rules. | :11:02. | :11:06. | |
What I am driving at and is interesting to people trying to run | :11:06. | :11:11. | |
businesses around the world is how it works so well for you. Who | :11:11. | :11:19. | |
deliver messages that turn you into the anti- hero of aviation. A | :11:19. | :11:23. | |
couple more examples. You floated an idea that you might try and fly | :11:23. | :11:32. | |
your planes with just one pilot to save money. Then you said, long- | :11:32. | :11:38. | |
term, you love the idea of standing room areas in the back of the plane. | :11:38. | :11:42. | |
Birth of those are never going to happen and you know it. But to seem | :11:43. | :11:48. | |
to like creating these controversies. I am not attracting | :11:48. | :11:54. | |
publicity. We are thinking outside the box. We are trying to make our | :11:54. | :11:58. | |
air fares even lower. There is some point that there will be one pilot | :11:58. | :12:05. | |
fights. To quote your own PR office, they admitted later that idea was a | :12:05. | :12:10. | |
publicity and advertising sand. should never trust anybody's | :12:10. | :12:18. | |
publicity Office. The West's Afghan over | :12:18. | :12:26. | |
Afghanistan. But they do not have any passengers on board. They have | :12:26. | :12:33. | |
explosives on board. Never is a long time. I understand it is not | :12:33. | :12:38. | |
likely to be happening in the next five-ten years. The technology is | :12:38. | :12:47. | |
advancing all the time. It may take 10, 20 years. But we believe that | :12:47. | :12:54. | |
people will be flying wanderings. In Stansted, there is a driverless | :12:54. | :13:03. | |
train. Statistically, there are quite safe. It is a constant quest | :13:03. | :13:09. | |
in Ryanair to find ways to question existing orthodoxies. So that we | :13:09. | :13:14. | |
can make things more affordable for passengers. But she will probably | :13:14. | :13:17. | |
acknowledge that while people respond well to the low-cost | :13:17. | :13:23. | |
message they want to be sure that safety is never compromised. We ran | :13:23. | :13:33. | |
:13:33. | :13:37. | ||
into a particular set of problems In Spain, three of your planes were | :13:37. | :13:42. | |
forced into emergency landings in Valencia. There were are questions | :13:42. | :13:49. | |
about how much fuel your planes were carrying. The press has | :13:49. | :13:54. | |
reported memos in which your pilots are being told they need to get | :13:54. | :13:58. | |
special authorisation to carry fuel which is a few hundred kilograms | :13:58. | :14:04. | |
above the minimum threshold. Is that true? A no. They had three | :14:04. | :14:09. | |
fuel emergency landings in Valencia. They are the only fuel emergencies | :14:09. | :14:14. | |
we have had in the last 18 months. There was bad circumstances in | :14:14. | :14:20. | |
Madrid that evening. All of the planes flew for one up for more | :14:20. | :14:26. | |
than scheduled. All around 30 minutes of reserve fuel. In | :14:26. | :14:31. | |
exceptional circumstances. The Civil Aviation Authority has | :14:31. | :14:34. | |
confirmed that there were 20 such landings in the last ten years. | :14:34. | :14:43. | |
This is not unusual. -- this is unusual, not unprecedented. | :14:43. | :14:49. | |
Spanish pilots union claims that Ryan Air Pilots are confronted by a | :14:50. | :14:57. | |
cost cutting exercise on fuel that You around the limit of doubt. | :14:57. | :15:03. | |
cannot trust what you are told. What does not get reported is the | :15:03. | :15:09. | |
official confirmation from the Irish Aviation Authority which says | :15:09. | :15:15. | |
our fuel policy complies fully with all EU requirements. Does it not | :15:15. | :15:20. | |
worry you bring your own pilates, quoted anonymously, say things like | :15:21. | :15:25. | |
this "the authority of the pilot is being taken away by Ryanair and | :15:25. | :15:31. | |
this policy on field could lead to more fuel emergencies than before." | :15:31. | :15:36. | |
It is unfair to quote an anonymous pilot. They are anonymous because | :15:36. | :15:43. | |
they dare not speak out. These are lies. Your pilots are lying? How do | :15:43. | :15:50. | |
I know it is my pilot? It is anonymous. You have confirmation | :15:50. | :15:54. | |
from the European safety regulator which confirms that Ryanair's fuel | :15:54. | :16:00. | |
policy fully confirms that complies with the lot. We follow the same | :16:00. | :16:03. | |
rules as the other European airlines. That is why more than one | :16:04. | :16:12. | |
million Flight's, we have only had three fuel emergencies. There were | :16:12. | :16:18. | |
exceptional weather circumstances in Madrid. I am driving at a | :16:18. | :16:22. | |
perception that, as Ryanair expanse, and you have talked about ambitious | :16:22. | :16:27. | |
plans for the future, it may have to revolt. I want to quote you | :16:27. | :16:31. | |
something said by Michael O'Leary a couple of years ago. Never believe | :16:31. | :16:38. | |
temple stopped he said "I think there will be a time for it is | :16:38. | :16:43. | |
appropriate to replace me. In two three years, Ryanair will need a | :16:43. | :16:47. | |
different face, a different personality, someone who will care | :16:47. | :16:50. | |
about fuel and the environment and all but staff because then they | :16:50. | :16:57. | |
will be a big company and that will not be me." I qualified that remark | :16:57. | :17:04. | |
by saying there were a number of including Stansted, the double | :17:04. | :17:10. | |
airport issue, the future of Aer Lingus. -- Dublin airport. I think | :17:10. | :17:17. | |
once we have tackled all of those issues and Ryanair is set fair | :17:17. | :17:24. | |
Witham plan, it will be time for me too well. I will tell you what | :17:24. | :17:31. | |
entreat me about the comment that you made about two or three years, | :17:31. | :17:35. | |
I wonder if that's something different might be a role in the | :17:35. | :17:40. | |
public domain and Ireland. World you have been leading this business, | :17:40. | :17:45. | |
your own country has got itself into the worst sort of economic and | :17:45. | :17:50. | |
political mess. I wonder whether you see a role for yourself in | :17:50. | :17:57. | |
trying to get our island out of the hole that it is in. No. There is a | :17:57. | :18:02. | |
great danger because people of limited ability like myself, you | :18:02. | :18:07. | |
might occasionally get lucky and be good at one particular job. I think | :18:07. | :18:12. | |
I am good at running a kneeling. You get into dangerous territory of | :18:12. | :18:17. | |
when you think you can walk on water. -- running in Ealing. I do | :18:17. | :18:22. | |
not know about dealing with the economic problems and Ireland. Many | :18:22. | :18:26. | |
successful business people have gone into politics and had a | :18:26. | :18:33. | |
disaster. You have been mouthing off about what you think I'll and's | :18:33. | :18:39. | |
problems are. This is a democracy. Everyone can have an opinion. -- | :18:39. | :18:45. | |
Ireland's problems. I just wonder, you have said you want to see an | :18:45. | :18:52. | |
end to what you call too much welfare, you want to cut | :18:52. | :18:57. | |
entitlement, you want to privatise the health system. This is in a | :18:57. | :19:01. | |
country which is going through the most intense period of austerity. | :19:01. | :19:09. | |
Do you think that the Irish people are ready for that? I think it | :19:09. | :19:15. | |
needs to happen at some point in time in the not-too-distant future. | :19:15. | :19:23. | |
Everyone is having been behind the banking crisis. Ireland as an | :19:23. | :19:31. | |
economy has a fiscal deficit of about 15 billion a year. We take in | :19:31. | :19:34. | |
about 35 billion and we spend about 50 billion. That is simply | :19:35. | :19:44. | |
:19:45. | :19:45. | ||
unsustainable. One way of dealing with it would be to raise some tax. | :19:45. | :19:50. | |
1.3 million euros a year, your salary. You'll get 20 million euros | :19:50. | :19:55. | |
for the dividends. Not quite that but not far off that. You a very | :19:55. | :20:00. | |
wealthy man. I am also the largest single taxpayer in the country. | :20:00. | :20:05. | |
Adult paid 12 million euros in tax to the Irish government. You have | :20:05. | :20:09. | |
also said that you are so fed up with being tax but you might walk | :20:09. | :20:15. | |
out of the country. I get fed up with me and my family are tax to | :20:15. | :20:19. | |
the hilt and the money is squandered on doing things like | :20:19. | :20:23. | |
being Sinn Fein politicians 50 million euros to buy toner | :20:24. | :20:32. | |
cartridges. There is a 15 billion deficit every year. Unless you | :20:32. | :20:38. | |
close that deficit, you will not close taxation. There is not enough | :20:38. | :20:42. | |
people and the country to pay 15 billion euros in tax a year. | :20:42. | :20:48. | |
something that strikes me about Ireland as an outsider, after the | :20:48. | :20:52. | |
Celtic Tiger, what we see in this country is immigration on a serious | :20:52. | :20:58. | |
scale. On average, every day in this country, 238 people are | :20:58. | :21:04. | |
leading and most of them are young Irish people. If you were starting | :21:04. | :21:09. | |
out after school or college today, a young Michael Levey in Ireland, | :21:09. | :21:15. | |
out get out of here? -- Michael Levey. | :21:15. | :21:20. | |
grew up during the last recession in Ireland. We need a programme | :21:21. | :21:25. | |
that eliminates the fiscal deficit. Unless you eliminate that debt is | :21:25. | :21:31. | |
it, we cannot return to growth. Ryanair delivers rapid traffic in | :21:31. | :21:37. | |
tourism growth here, 5 million passengers a year. There is only 20 | :21:37. | :21:42. | |
million passengers in total. We could grow by 25 % over a five-year | :21:43. | :21:47. | |
government and we cannot get a reply by from the Government. The | :21:47. | :21:51. | |
fire was an American multinational, he would be building statues, | :21:52. | :21:56. | |
giving the tax breaks in giving me but I want. When you are an Irish | :21:56. | :22:02. | |
company, roadblocks are put in your way. You have chosen to answer in | :22:02. | :22:06. | |
an economically. Talking about economic changes and the forms you | :22:06. | :22:10. | |
would like to see. Is there not something deeper than that? Is | :22:10. | :22:14. | |
there not something wrong with the political culture in this country? | :22:14. | :22:19. | |
If you turn on the news, you see a whole host of the country's top | :22:19. | :22:23. | |
bankers, property developers and sometimes even politicians who are | :22:23. | :22:30. | |
being hauled over the coals for this sort of cosy, crony stick | :22:30. | :22:33. | |
relationship which has developed in this country which allowed people | :22:33. | :22:38. | |
to make vast amounts of money and, frankly, build businesses that were | :22:38. | :22:42. | |
based on a pack of lies. Is there not something wrong with the | :22:43. | :22:48. | |
culture if that is allowed to happen? There was a big property | :22:48. | :22:52. | |
bubble here, as there was in Spain, Greece, and other European | :22:52. | :22:56. | |
countries. Ireland is also responsible for a great success | :22:56. | :23:01. | |
stories, Ryanair and not the least of them. Have you had to play the | :23:01. | :23:07. | |
crony game to get things done? Thankfully, Thankfully,e has not been | :23:07. | :23:11. | |
a great deal done in this country in recent years. A substantial | :23:11. | :23:16. | |
point. A lot of your business is overseas. The figure used to be 40 | :23:16. | :23:25. | |
%, now it is 10 % for traffic. have said in the past that Ireland | :23:25. | :23:30. | |
and the EU is dominated by half- wits and idiots. Why, if that's the | :23:30. | :23:40. | |
case, are you asking the Irish people to vote for the fiscal | :23:40. | :23:45. | |
treaty that is currently under discussion? Because it is painfully | :23:45. | :23:50. | |
self-evident that we don't have any alternative. We are borrowing 15 | :23:50. | :23:53. | |
billion a year to sustain the current government's spending | :23:53. | :23:57. | |
programmes. The only people who will lend us that money is the | :23:57. | :24:01. | |
European Union. We'd better vote for it because it's the only show | :24:01. | :24:05. | |
in town. We cannot afford an Icelander overnight devaluation | :24:05. | :24:11. |