More free seats, Ryanair chief says
By JAMES WALLACE
SEATTLE POST-INTELLIGENCER AEROSPACE REPORTER
Saturday, October 2, 2004
At a time when many airlines, especially in the United States, are losing buckets of money, Michael O'Leary talks about giving away more free seats on Ryanair, Europe's biggest low-cost carrier.
In a few years, he said yesterday during a Seattle visit to Boeing, up to 75 percent of the passengers on Ryanair might be flying on free tickets.
Last year, about 15 percent of Ryanair passengers got free tickets, although they still must pay taxes and airport fees. This year, that figure will be about 25 percent, he said.
O'Leary, the executive who runs Ryanair, is an Irishman. But he's not crazy.
Well, maybe just a little.
But he's certainly colorful and always entertaining.
And successful.
He has built Ryanair into the Southwest Airlines of Europe by using the Southwest no-frills model -- stick with one airplane type in one class, fly direct to smaller airports and find any way to reduce the cost of operating.
Ryanair is a fourth the size of Southwest, based on revenue. But it's growing fast.
Just as Southwest is under pressure from rival low-cost carriers in the United States, Dublin-based Ryanair faces tough competition in Europe and a brutal fare war, from the likes of EasyJet, Air Berlin and a number of other low-cost startups.
But Ryanair is able to offer some of the cheapest fares in Europe. The average Ryanair ticket costs less than $50.
Last week, O'Leary said in an interview, Ryanair began offering 3 million free seats.
Is this anyway to run an airline?
O'Leary noted that the airline is giving away free seats that would otherwise go empty during certain travel times.
And once on the plane, passengers must pay for everything, from a sandwich to a soda. Nothing is free.
These "ancillary revenue," as O'Leary calls them, totaled $180 million in 2003.
On Nov. 1, Ryanair will break with the Southwest business model, however, and begin offering in-flight entertainment.
It is a hand-held device with a screen about the size of a paperback book and a 40-gigabyte hard drive. Passengers can watch movies and recorded TV, play games and listen to music. The system was developed, initially for Alaska Airlines, by Tacoma-based Aircraft Protection Systems.
Handing out a device to passengers is much cheaper than installing seat-back TVs as some other airlines have done, O'Leary said.
The system will first be rented to passengers on five 737s operating out of Stansted Airport in Britain. Passengers will have to pay about 5 pounds ($9) per flight to use the device.
If successful, the in-flight entertainment will be offered throughout Ryanair's growing fleet of Boeing 737s.
Two years ago, O'Leary ordered 100 Boeing 737-800s, which Ryanair operates with 189 seats in a single class
In 2003, O'Leary ordered 22 more 737-800s and took options on 78.
So far, 54 of the next generation Boeing jets have been delivered, with 96 still on firm order. And there are many more Ryanair options for additional 737s on Boeing's books.
O'Leary said he might be ready to convert options into orders by 2006 or 2007, for delivery between 2010 and 2015.
"We intend to keep growing," he said. That growth will see from 10 to 30 new jets added to the Ryanair fleet each year, he said.
Two more 737-800s were delivered to O'Leary yesterday in a ceremony at Boeing Field. One was painted in the new Boeing livery of blues and whites that is featured on pictures of Boeing's planned 7E7 jetliner.
In 2002, when he took delivery of his first 737-800 at Boeing Field, O'Leary picked up Boeing's Carolyn Corvi, vice president of the 737 program, and placed her inside the cowling of one of the jet's two engines as photographers snapped away.
Yesterday, he did it again, only this time O'Leary joined Corvi in the engine cowling.
The 43-year-old O'Leary is known for outlandish stunts, as well as his trash-talking, blunt language and casual dress.
For the delivery ceremony, O'Leary wore jeans, tennis shoes and an unbuttoned dress shirt that revealed a "Ryanair loves Boeing" T-shirt.
And in brief comments to Boeing workers and others at the delivery ceremony, he did a little trash-talking of Boeing rival Airbus.
He said he would make sure the 737-800 that is painted in the livery of the 7E7 is flown to airports all over Europe where they are lots of Airbus planes.
"That should really piss those (Airbus) people off," he said to laughter and applause.
For Michael O'Leary, it was pretty tame stuff.
