herald

Saturday 19 January 2019

I'm in negative equity, why leftie RTE should be sold and what I really think of the fat cats

In an exclusive interview with the Herald, the Ryanair chief tells our correspondent Eoghan Corry what's wrong with Ireland and how we can fix it

Things are going to get better. Michael O'Leary says so. He's the last man standing after the boom and arguably Ireland's most successful businessmen of all time.

Ryanair will carry 75 million passengers this year, putting it up there with the Lufthansa Group as Europe's biggest airline.

He gets his calls right on purchasing aircraft, has some spectacular successes with fuel hedging, but he got the call spectacularly wrong on the Irish economic downturn.

He lost money on bank shares. He purchased a house on Raglan Road at "the top of the bloody cycle, probably worth half what I paid for it", because his wife wanted somewhere near to the granny.

But he appreciates the fact that, unlike other unfortunates, he can afford it.

"I won't have to sell that house for 20 years. I don't really care. The property crash only affects you if you have a mortgage or you have to sell. I don't."

Did Michael O'Leary see the crash coming?

"I saw the crash coming but not the extent of it. We were gearing up for a recession and a downturn. Were we gearing up for Irish property values to fall by 60pc? No. Were we gearing up for Spanish property values to fall by 75-80pc? No. But was the world going to turn down again? Absolutely."

He wants the Government to close down large parts of the public service, slash taxes and speed us out of the recession.

"These things always go in cycles. But the difficulty in Ireland is unless we are to relieve the debt of the public sector where it is rotten to its core. Dermot McCarthy [retiring top civil servant] gets rewarded for 10 years of abject failure with a ¤600,000 package to depart and now he is up for the ambassadorship to the Vatican. He should have been sacked.

"Enda Kenny should go on TV and say this is worse than we thought and we are going to start and make Ireland the most competitive economy in Europe."







Unhealthy

As for passenger growth, something upon which he has an unhealthy degree of influence, he says the only way to resolve this is for Ireland to get competitive again. And for the Dublin Airport Authority (DAA) to be seriously downsized.

"Ryanair can continue to grow in recession. Our biggest growth market is Spain, in the midst of an even bigger recession than in Ireland. A bigger property crash than in Ireland. And if you look at Ryanair's growth during the recession, we have grown every year during the recession.

"The growth is being allocated to lower-cost airports. The growth is not getting allocated to Ireland because we are increasing the cost of the airport when most of the rest of the industry is slashing cost.

"We have huge tourism potential in Ireland. It is not being exploited by anyone. Because the product is now competitive again, the hotels, the restaurants, the green fees, everything has come down, but access capacity has been destroyed by the Department of Transport, the DAA and the travel tax. To return the Irish airports to competitive charges, there is any number of different ways to go.

"You could sell off one of the two terminals at Dublin airport. We would buy it. Then you would get competitive charges in a nano second.

"You can have 100pc discount for growth. We have given the Government a proposal where we deliver five million passenger growth at Cork, Dublin and Shannon. But if it is not 100pc discount growth they are not going to get it, because we have loads of those deals all over the UK and Europe.

"The DAA continuously hides the traffic figures in Shannon and Cork. They are collapsing. They have published the Dublin because year to date, helped by the volcanic ash, they are slightly ahead.







Problem

"The DAA say these facilities have to be paid for. No, actually, sorry, what facilities have to be paid for is the one you originally promised to deliver, which is the ¤170-200m second terminal. If you guys want to p*ss away ¤1.2bn on it, so be it. The DAA say they only spent ¤600m on the terminal and the other ¤600m was on beautifying and trees and shrubbery.

"We don't give a sh*t about trees and shrubbery. We are happy to pay ¤160m, but if you guys, led by a half-wit, so you can drain what you thought was the regulatory system, your problem. In Cork they spent ¤200m building a terminal building that has a capacity of three million passengers a year, and then closed the old terminal which has a capacity of three million passengers a year. Now Cork has less than two million passengers this year.

"Charleroi built a terminal which has a capacity of five million passengers a year for ¤26m, twice the size, one tenth of the cost. The DAA is the apocryphal property developer of the Irish Celtic Tiger, except it hasn't yet gone into NAMA. It is worse than Bernard McNamara. It is worse than Derek Quinlan, it is worse than Ray Grehan and all of them put together.

"They say T2 was a statement of the New Ireland. I can think of no better statement of the new Ireland than the big ¤1.2bn empty white elephant that is Dublin Airport, it and Anglo's half-finished headquarters are the two statements of modern Ireland."

He met McNamara once, never met Sean Dunne, never met Ray Grehan, never met Derek Quinlan.

"The property developers were a law unto themselves. I was never interested in property in Ireland anyway. It was always mad. One reason I never met the property developers is that over 10 years Ireland had become only a tiny part of our overall market in Ryanair, and that's the bit that everyone in this country misses.

"In a European context there are four airlines that matter, Lufthansa, Air France, BA/Iberia and Ryanair. Aer Lingus is an irrelevancy.

"The next big development is going to be the Europeans and the Americans merging, which is the inevitable by product of having an EU-USA Open Skies."







Megaphone

None of O'Leary's suggestions get anywhere, because O'Leary's way of doing business with the establishment is by megaphone. A department he wants to close down haven't rushed to take his views into consideration.

Why is it megaphone? "Because megaphone is the only way you can deal with those bastards in the Department of Transport who are rotten to the core.

"It isn't happening because once a proposal gets into the Department of Transport, it gets sent out of the DAA.

"We are back in to the same mess that used to happen to Irish transport policy in the 1980s. It is worse than the 1980s. Instead of now protecting Aer Lingus, they now protect the DAA.

"They protect the DAA now because they are responsible for the cock-ups that the DAA have made. Remember, even when the regulator, whom I think is a useless half-wit, even he came out with a report five years ago that said that the proposed T2 was 40pc oversized, it is too big, Cullen [then minister] issued a binding ministerial directive to proceed in the national interest because there are big queues in Dublin airport. It will be solved eventually because the DAA will go bust, unless you get a minister who is prepared to take on the public service unions."

hnews@herald.ie

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