Michael O'Leary by Alan Ruddock Read Free Book Online

months later the government took action against a travel agent who was prepared to discount Aer Lingus fares to London and Europe. In August the government moved again to stop Lonergan offering a £19 discount on an Aer Lingus flight to New York while in February 1984 it clamped down on an agent who was prepared to sell a full-price British Airways ticket but without forcing the customer to spend a Saturday night in the UK. In total, the government investigated nine infringements of its rules in seven months and, according to Ted Nealon, a junior minister with responsibility for transport, ‘Satisfactory assurances were obtained from the airlines involved that steps were being taken to ensure that further infringements of the terms of the minister’s approval would not take place.’ Trouble was, the airlines might agree, but the travel agents did not.
    Nealon and his colleagues were outraged by the defiance and sought an injunction in the High Court to stamp out the illegal discounting. The government won the action, but then lost on appeal in the Supreme Court, which decided that the government was within its rights to regulate the airlines but that it did not have the power to tell travel agents how to run their businesses.
    So Nealon, encouraged by Aer Lingus, introduced legislation to fine and imprison travel agents who broke the rules. He argued that a free-for-all could ‘lead to considerable instability in the market place, with discounting and other malpractices emerging on a scale that would undermine approved tariff structures and could have serious financial implications for airlines generally and for Aer Lingus in particular. In the long term, such a situationwould only serve to put at risk the range of air services which Ireland enjoys, a development which would not be welcomed by either business or tourism.’
    His argument was a perfect summary of Aer Lingus’s views on competition: it would cannibalize, not stimulate, the market and must be stopped.
    Nealon’s proposal to fine travel agents up to £100,000 and imprison them for up to three years met a ferocious response from Des O’Malley, a senior Irish politician who was soon to break from Fianna Fáil to launch the Progressive Democrats, a party that would embrace economic liberalism. The government, he said, was
    making a laughing stock of this country. [It is] the only government that I know of in the Western world at present who are bringing emergency legislation into their own parliament to push up air fares as much as possible. This is happening a week or two after the signature of an important bilateral agreement between the British government and the Dutch government which has been widely welcomed in both countries and has had the effect of reducing the return fare between London and Amsterdam to GB£49. But instead of increasing access to the country, making it cheaper for people to come here, we are introducing legislation which will ensure that our already extraordinarily high fares will be higher. We must be the only country in the world that puts people in jail for charging too little and for not making the maximum profit.
    Although O’Malley was still unusual among politicians in taking a stand for liberalization, the debate had given voice to the campaign for lower fares and allowed economists, such as Trinity College’s Sean Barrett, to highlight the enormous price discrepancies that existed between Ireland and the United States. In a newspaper article in 1984 Barrett pointed out the cost per mile of an airfare between London and Dublin was 39 cents, while the cost of a similar journey in the US, from New York to Buffalo, was just 12 cents a mile. On the west coast of America, where low-fare airlines were more prevalent, the costs fell lower still, with San Francisco to Los Angeles costing just 8 cents a mile.
    â€˜Barrett was probably the only public voice of any kind of stature making any