‘Is it in our national interest,’ O’Malley baited Nealon, ‘that this should be so, or will we continue to make the mistake of equating Ireland’s national interest with the health of Aer Lingus’s balance sheet?’
When it came to the vote on whether to take the bill to the next stage, the opposition whip, Bertie Ahern, sensing an opportunity, announced that his party would not be supporting the Government on the Air Transport Bill. That decision was straight politics. The Fianna Fáil leader, Charles Haughey, liked to oppose everything he could that was not his own policy when out of office. (Fianna Fáil, for example, opposed the Anglo-Irish Agreement in this period but later worked it successfully in government.) Now their opposition, along with sufficient discontent from free marketeers on the Government’s own benches, was enough to stop the bill in its tracks. Mitchell soon announced that he would be parking the legislation in order to better appraise the issue.
‘Air fares bill hits turbulence’, reported the Irish Press. It was turbulence for some, clear air for others. Tony had been exultant at the failure of the Air Transport Bill. The door of airline deregulation had been held ajar; Tony now went barging through. Within five months Ryanair was incorporated and the principle of deregulation established with the Waterford–Gatwick route.
In April 1985 Ryanair applied for a licence to operate on the Dublin–Luton route. Again it was a clever choice: an unfashionable airport outside London to which Aer Lingus did not fly at that time. It was subtle competition rather than head-to-head conflict with the national carrier. Over the next eight months Tony quietly lobbied Jim Mitchell and the Taoiseach, Garret FitzGerald, who was regularly invited to Kilboy and would eventually join the GPA board as a non-executive director in 1987.
These personal contacts were vital to what happened next. Ireland was still getting the hang of the processes of deregulation. Later, more transparent procedures for putting a service or utility out to tender would be adopted; but in 1985 having a word with the minister seemed to be enough.
It turned out to be a win-win situation. The Government had a problem with hostility from the public and the Dáil, including its own backbenchers, about a deeply unpopular air-fares policy. Now here was Tony Ryan, someone with an international reputation in the aviation business, offering to get them off the hook. Give us the Luton route that Aer Lingus doesn’t want, Tony told them, and all your problems are solved.
The political expediency of the decision was reflected in the strange scenes in the Dáil when it was announced on 4 December 1985. The committee stage of the Air Transport Bill had been resumed. The chamber was almost empty following the excitement of a controversial statement on European affairs by the Taoiseach immediately beforehand. Now, during discussion of an opposition amendment to the Air Transport Bill, Mitchell pulled a rabbit from his ministerial hat. ‘It is appropriate to announce now’, he declared, ‘that I have approved in principle a new air service from Dublin to Luton, return, costing £99. I have given Ryanair the go-ahead, and it will be announced by my department later today.’
A moment of stunned silence was interrupted by audible laughter from Des O’Malley’s direction. Mitchell ploughed on, passionately declaring himself ‘among the most ardent advocates of liberalisation of air transport’ and ‘all for an open-skies policy throughout the European Community’.
‘At last I am beginning to see the fruits of my labours!’ O’Malley jeered. He then sought assurances that it was ‘a genuine £99 fare and not full of all kinds of restrictions.’ When he received them, O’Malley hailed the moment as ‘a great step forward in terms of Irish aviation policy’ and ‘quite an event’. He even congratulated the minister.
Meanwhile, it was left to the Ceann Comhairle to point out from the chair that the minister’s unscripted change of policy had broken procedure. ‘The minister has announced it, and the deputy has welcomed it,’ he complained, ‘and neither was in order.’ After all, the minister’s announcement was a volte-face on the bill under discussion, which had been put before the Dáil in his name.
Having the Dublin–Luton licence granted was a triumphant moment for Tony, but it was also one with immediate dangers. As the Irish Times pointed out, ‘Ryan Air strongly deny that Cathal Ryan is a stalking horse for Tony Ryan. Were this to be the case, it would prove embarrassing for the elder Ryan, who is a partner in Guinness Peat Aviation.’ The newspaper continued mischievously: ‘The national carrier would not take too kindly to him starting an airline in competition with Aer Lingus.’
Years afterwards the chief executive of Aer Lingus, David Kennedy, would happily admit that the advent of Ryanair was good for the national airline. ‘To look out the window at Dublin Airport and see a Ryanair aircraft sitting there was a wake-up call,’ he says. At the time, however, there was only anger and bemusement within Aer Lingus. Kennedy didn’t even bother seeking assurances from Tony about his role in Ryanair, because everyone accepted that the GPA boss ‘was involved, absolutely’.
That involvement itself prompted fury within Aer Lingus, but so too did the way in which Tony had got the licence. ‘He found it so easy to get a licence from the Government without any formal tendering process,’ Kennedy complains. The Dublin–London route was the ‘most profitable part of the Aer Lingus network’. For Tony to get a piece of that action, even though it was to Luton, without a proper bidding process or a requirement to take on other public-service requirements stuck in the craw of everyone at Aer Lingus.
Sometimes that displeasure felt personal. When Derek O’Brien, who was on unpaid leave from Aer Lingus at the time, was tapped up by Tony in January 1986 to join the new airline as commercial director, he found himself hauled into the offices of the national carrier. ‘We’ve heard a rumour that you’re thinking of joining Ryanair,’ he says he was told. ‘If this is so, your unpaid leave is cancelled and we expect you back in the office by Monday. If you don’t turn up we will assume you’ve resigned.’ O’Brien didn’t need time to think it over. ‘It was “Goodbye and get lost” from Aer Lingus,’ he says, ‘so I just said, “Stuff it,” and decided that I would join Ryanair anyway.’
Over the next few months Tony focused on getting the airline ready for its inaugural flight to Luton on 23 May 1986. He had to maintain the illusion of an arm’s length relationship, so most of the meetings took place down in Kilboy rather than in Dublin. There was no detail too small for Tony to consider, right down to the quality of the desk in the new booking office that would open in Dublin’s south city centre. In many ways that desk, individually designed and constructed, was an early indication of the dichotomy at the heart of early Ryanair: while Tony wanted the airline to be a low-cost carrier, he also wanted it be elegant and in some ways classy. Cheap and cheerful, he would remind everyone, ‘does not have to mean shite.’
Eugene O’Neill was the man tasked with selling the Ryanair image. Among the many old hands that Tony had brought in from Aer Lingus, there was a certain bemusement, even annoyance, that someone with so little understanding of the aviation industry should have been asked to run the new airline. But it was for their experience that those more seasoned figures had been recruited. What Tony wanted from O’Neill was pizzazz—a youthful face that could put Ryanair forward as a contemporary, populist and entrepreneurial alternative to the staid, out-of-touch Aer Lingus.
O’Neill was perfectly suited to the role of master of ceremonies. Flashy, even brash, he also had a winning way that combined charm and a knowing look that said, ‘Sure it’s gas, isn’t it!’ He would organise publicity stunts for each new Ryanair initiative, involving bagpipers and lots of pretty women. Everything shouted that you could pay more money to fly Aer Lingus if you wanted, but whatever your age or class you would have more fun on Ireland’s second airline.
Dressing in natty Armani suits and occupying a vast, expensively designed office in Dawson Street, O’Neill also seemed to represent something else new. He was the next generation of businessman— the heir to Tony’s class
of 1936, which had done so much to transform the landscape of Irish business. The ‘Celtic Tiger’ was not yet born, but O’Neill in 1986 was an early prototype for a kind of businessperson that would become familiar in the following decade. He had confidence in himself and also in Ireland as a place where things could happen. In the context of the mid-1980s, with the economy in tatters, that belief offered a much-needed burst of optimism. ‘Eugene O’Neill is a young man with big ambitions,’ declared the Irish Times’s ‘People’ profile. ‘Ryanair’s 30-year-old managing director plans to make the company one of the most successful in the country.’
Among Ryanair’s trickiest first tasks was convincing people to fly to Luton Airport. It had been made famous for all the wrong reasons in the 1970s by a television ad for Campari featuring the actor Lorraine Chase. Chatted up by a ‘posh’ suitor, her character pointed out in a chirpy Cockney accent that she had wafted not from paradise but from Luton Airport. There was probably no television-owner in England or Ireland (where ITV was readily available) who didn’t immediately have Chase’s voice come to mind when thinking about that unfortunate airport.
The snob value surrounding Luton Airport might have counted for less than people imagined. Heathrow Airport, after all, was next to Hounslow, a destination visited by few of the millions of travellers who passed through each year. More problematic, however, was the fact that Luton was outside London and had poor transport connections. Yet even this was a mixed blessing. On the one hand it allowed Ryanair to set its own fares, as it was not competing directly with Aer Lingus on one of the London routes regulated through bilateral agreements between Ireland and Britain; on the other hand it put the new airline at a disadvantage with passengers who wanted to fly directly to the capital. Tony’s answer was as simple as it was brilliant. ‘Just call it London anyway,’ he told O’Neill. And so the Dublin to ‘London Luton’ route was born.
The onward-transport issue was harder to solve. With no underground railway line into the city centre, unlike at Heathrow, passengers were confronted with having to catch a bus, get a shuttle connection to the train station or pay an expensive taxi fare. It would turn out to be the major irritant for passengers in using the service.
Another issue to be neutralised was the fact that the journey with Ryanair took half an hour longer than Aer Lingus’s to Heathrow. Ryanair’s air operator’s certificate was surely the only licence in the world in which the exact type of aircraft had been dictated. ‘It was another example of the “downtown office” syndrome,’ Declan Ryan suggests. Tony had originally planned to fly ancient Vickers Viscount aircraft on the route, but in the end he paid out £3 million to Dan-Air for two second-hand BAe 748 turboprop aircraft that could accommodate forty-eight passengers. These were still noisier and slower—‘marginally slower’, Tony corrected—than the jet aircraft that allowed Aer Lingus to give passengers a quicker, smoother journey to London. Eventually Ryanair would force the minister’s hand with a typically cheeky ad announcing that they would soon be flying jets, ‘subject to government approval’.
Down at Kilboy, Tony was constantly urging the Ryanair team to come up with imaginative solutions to these and other problems. But he also believed that if the price of a ticket was right, the paying public would understand that, like taking a bus instead of a taxi, the cheap fare made up for any minor inconveniences.
That the issue of price was Tony’s ace in the hole was confirmed the day before Ryanair’s first London flight. With the clock ticking down, the three big airlines operating across the Irish Sea each launched an assault on Tony’s newcomer in an obvious attempt to spoil his big day. Ryanair was operating the route to London Luton for £99 return. Now Aer Lingus, British Airways and Dan-Air all announced that they were slashing their round-trip fares to Britain to £95. It was a declaration of intent: you wanted competition, the move said, so here it is.
Ryanair might well have reacted with anger and outrage. Instead they used humour to make a point. ‘At last the penny has dropped,’ quipped the Ryanair chairman, Arthur Walls, CEO of Clery’s department store, before announcing that the airline had dropped its own prices to £94.99. It was a clever one-liner that reinforced Ryanair’s image as a cheeky newcomer thumbing its nose at the big operators while helping to bring down prices for the ordinary punter.
What could have been a depressing beginning to the new service was instead launched in party style at Dublin Airport. O’Neill sent the first flight on its way amid the hoopla of pipers and cheerful banter. The inaugural passengers were presented with commemorative glassware. Among the first on board were top brass from Aer Rianta and Bord Fáilte, accompanied by the Aldermen and Burgesses of the City of Dublin. Tony’s boys were there to receive congratulations on getting their new venture off the ground. RTE cameras rolled to capture a ‘historic’ day in Irish travel. In fact, amid the general excitement and jollification, it would have occurred to only the most observant that the one person who was missing was the man paying for everything. Tony Ryan, unwilling to undermine the assertion that Ryanair had nothing to do with him, did not attend the maiden flight from Dublin to London.
At Kilboy the following Saturday, however, Tony’s commitment was to a different matter. He grilled O’Neill and his team on the first days of operation, wanting every detail. Then it was on to strategy. Aer Lingus slashing prices had been a warning. Ryanair could expect no favours from the national carrier. The rumour, vehemently denied, was that Aer Lingus had set up a special unit to target its low-cost, no-frills rival, taking aim at both price and reputation. Tony had seen what Aer Lingus could do to newcomers in the market. The previous year it had enveloped and then crushed the small independent airline Avair. The lesson Tony drew from this was that Ryanair had to establish itself quickly as a proper competitor to Aer Lingus. To run Ryanair as a small-scale operation was asking to be overwhelmed by the behemoth that was the national carrier.
Tony now laid out a threefold strategy to bite at the ankles of Aer Lingus. Firstly, Ryanair had to remain competitive on price no matter what Aer Lingus did to undercut it. Secondly, it had to go head-to-head with Aer Lingus in the publicity war that was already under way. When Aer Lingus launched a series of snarky advertisements deriding ‘cosmopolitan Luton Airport’ and enquiring why anyone would fly there instead of to a real London airport, Ryanair hit back in kind, asking if it was really worth paying an extra £150 ‘for breakfast’. That approach made an advantage of the ‘no frills’ aspect of Ryanair and emphasised the importance of price. Similarly, the fiftieth anniversary of Aer Lingus that year was greeted in tongue-in-cheek style by Ryanair with a poster of a giant birthday cake with a huge slice missing. These and other publicity stunts captured the popular and critical imagination. In 1987 Ryanair won the Sunday Tribune advertising campaign of the year award for its broadsides against Aer Lingus.
The third element of Tony’s three-pronged attack was in many ways the most audacious. If Ryanair wasn’t to be seen as a pipsqueak in comparison with Aer Lingus it had to do more than talk big: it had to act like a significant carrier. That meant expanding its fleet, looking beyond the Dublin–Luton route to find niche markets ready for development, and sometimes taking on Aer Lingus on its major routes. This policy would see Ryanair embark on a major dash for growth in the next two years, pulling in obscure routes such as Knock–Luton while simultaneously offering direct competition to Aer Lingus on the strategically critical route to Manchester.
That growth would be an expensive business for Tony, who over the coming years would have to dig deeper and deeper into his pockets to keep Ryanair aloft. Yet he was sustained by the belief that Ryanair had identified a new market that would transform commercial aviation, making it democratic and popular in ways that would have been unthinkable in the days when he started out in Shannon or worked amid the glamour of JFK Airport.
That Tony understood this new market better than anyone else was highlighted by the difference between Ryanair and Aer Lingus on price. W
hile Aer Lingus had attempted to spoil Ryanair’s party with a price slash in May 1986, the real contrast between the two companies on fares came in the small print. A Ryanair passenger bought a return ticket at the advertised price. For an Aer Lingus passenger the cheap fare was available only on a super-apex ticket bought a month in advance for a stay that had to include a Saturday night. That arrangement was all very well when planning a family holiday months in advance, but if you lived in London and someone in your family died in Dublin you might end up paying hundreds, if not thousands, of pounds to bring everyone home for a funeral that would take place in days. With Ryanair you just booked the flight at the normal price.
In happier times, Irish people began making more frequent and often spontaneous trips between Dublin and London. British tourists visited Dublin in greater number, making the city a favourite weekend destination. And workers who might otherwise have left Ireland at a time of economic hardship were now able to fly home at the end of every week. Derek O’Brien recalls that
we had plasterers going to London, commuting for £94.99, which was unheard of before. And what’s more important, they were bringing their wage packets back to Ireland. That was thanks to Tony Ryan’s vision, no question. My own belief is that in the beginning he saw it as an investment in the country rather just a money-making enterprise.
Two months after the launch of the Ryanair route to Luton the verdict came in from the voice of the Irish establishment. ‘Still a few hitches, but Ryanair’s price is right,’ announced the Irish Times, which had sent a reporter to judge the experience. Yes, there were problems with the transport system getting from London out to the airport, but Luton Airport itself had actually turned out to be quite agreeable, with ‘an excellent duty-free shop far superior to the boxlike structure provided for the Irish flights from Heathrow.’ Businesspeople on the flight ‘love the flexibility it gives them without the vast expense of a £200 ticket.’ Everything was rooted in the ‘big advantage Ryanair has over every other airline’, namely the price of tickets and no restrictions. All in all, concluded the newspaper’s slightly surprised reporter, ‘Ryanair was a pleasant experience.’
Tony Ryan Page 13
