Michael O'Leary by Alan Ruddock Read Free Book Online Page A

comment on the nonsense that existed in the 80s,’ says Liam Lonergan. ‘There was a general acceptance at the time that Aer Lingus was always right, it wasn’t Aer Lingus’s fault…There was no recognition of [Ireland’s needs] at all. If they had any recognition of Ireland being an island they would have deregulated airfares twenty years before that. There should never have been regulated airfares out of Ireland. The government had no concept whatsoever of how to encourage tourism, how to get people onto the island, or how to get them off the island.’
    Lonergan’s views were far from mainstream at the time. The government and Aer Lingus believed that Ireland being an island meant that it was essential to protect air services, because if carriers were allowed to compete they would collapse and Ireland would be left without an air link. The only sure way of keeping the market stable, they argued, was through state control. They did not trust the market and deemed air travel too important to be left to the fickle interests of investors.
    Few apart from Barrett, O’Malley, Ryan and his collaborators embraced the idea that competition would create a more vibrant market and that tourism – one of the country’s most important industries – would blossom rather than wither as a result. But slowly the evidence from America, where fares continued to fall and the numbers flying to climb, from a small number of competitive routes in Europe such as London-Amsterdam, and from the success of the transatlantic discounters in stimulating market demand, prompted the Irish government to dip a toe in the dangerous waters of deregulation.
    Its first experiment – allowing Avair to fly to Britain – failed because Aer Lingus ensured that it failed. Without a change in government policy, a change that would see a government minister face down Aer Lingus’s protestations and prevent predatory attacks on a newcomer, Avair’s successors would also fail.
    Pressure for change was also building fast outside Ireland and the catalyst for action had come from the courts. Just as the Irish government had introduced legislation in 1984 to outlaw discounting bytravel agents, so too the French had moved to bring discounters to court. After the case, which the French government lost, the European Court of Justice was invited to determine whether aviation should be included within the European Community’s strict rules on cartels and free competition.
    To the dismay of the national airlines and the governments that owned them the court ruled that aviation should be subjected to the general ban on price fixing laid down under article 85 of the original Treaty of Rome. This increased pressure on Europe’s senior politicians to finalize a new aviation policy. The days of bilateral agreements – where two governments carved up the airline routes between their countries and controlled both prices and capacity – were numbered.
    Jim Mitchell, the senior minister responsible for Irish transport policy, had seen and heard enough. He had been converted to the benefits of aviation competition, but while he wanted competition he did not want another Avair fiasco on his hands. He had to ensure that the next licence he granted went to a company that had the funds and the leadership to mount a credible challenge to the Aer Lingus monopoly. Mitchell’s strategy was not to undermine Aer Lingus, but to introduce a modicum of competition on regional routes between Ireland and the UK. Tony Ryan, a respected multimillionaire and recognized entrepreneur, fitted the bill, and so in May 1985 Ryan’s Irelandia project, renamed Ryanair, became Ireland’s second airline, with a licence to fly between a small airport in Waterford and London Gatwick.
    Tony Ryan had his licence and was preparing for his first flights that summer but Michael O’Leary was oblivious to the dramas in the aviation