Middle East a rising star on aviation horizon: Ryanair

When a fledgling aviation company wanted to embrace e-commerce at the beginning of the Internet revolution, they spiked two expensive professional quotations from Dublin and London and turned to a group of four A-level students to develop their Web portal, the backbone of their future business. They paid them in free plane tickets and some cash and subsequently absorbed two of them.

Welcome to the weird and wacky world of corporate ingenuity. The growth story of Ryanair, Europe’s largest low-cost airline with over 80 million passengers per year, might read like stranger than fiction, but it sheds light on the courage of their convictions.

The “keep it cheap, keep it simple” business model not only carved out a business empire in an already saturated market, it went on to change the way people fly. And Kell Ryan, co-founder along with his older brother Dr T.A. Ryan, was a member of the pioneering team that made the dream of flying affordable to everyone and navigated the company through the industry’s worst economic turbulences.

Talking to Khaleej Times ahead of his Dubai lecture at the Mena Customer Delight Award function on November 7, Ryan was upbeat about the aviation sector in the region. “The Middle East is a rising star,” Ryan said. He said the concept of no-frills travel is here to stay and stressed the importance of continually cutting corners.

He said the series of snags the Boeing Dreamliner had suffered were mere teething problems. “I personally believe that the 787 will be a resounding success.”

Now an avid speaker keen on passing his wealth of knowledge in aviation, tourism and business management to entrepreneurs worldwide, Ryan offered an insight into the low-cost travel industry.

He said Ryanair was essentially his brother’s dream that took wings with a three-pronged strategy on board. It was conceived chiefly to create employment in Ireland, to make low fares available so that everyone could fly and to spur tourism in the country.

“My brother felt that there was no competition on fares and the prices per mile were just too expensive,” Ryan said, explaining the basic business principle that went on to revolutionise the industry. The idea was to fly people safely and on time with affordable fares, he added.

Handholding a team of 25 in 1985 to a multi-billion stable of over 300 planes and 9,000 employees was a Herculean task, no less. More commendable was the visionary streak that runs in their blood.

Asked if the brothers had foreseen a runaway success for the carrier when it all started, Ryan said: “We always believed that people would avail of low fares and seize the opportunity to explore countries that were beyond their price range before.”

Typically, most passengers spew venom on low-cost airlines, but then they all ultimately fly them. Ryan said this paradox is a commonality of the passenger mindset.

“Passengers scorn all airlines at some time or other, but low fares will always win out,” he added.

As much as they earned their wings after decades of remarkable flying, Ryanair also piled on customer wrath, with taglines ranging from “the world’s most favourite airline” to “the world’s most hated airline”. But isn’t it unfair for the very common man who benefited from the visionary low-cost concept to badmouth the airline? Ryan believes so: “Absolutely.”

He said the reality was that because of Ryanair, all passengers on all airlines were now paying less than what they used to before the low-cost concept came on the scene.

Ryanair’s reputation plummeted as it splurged on brash promotions and ruthless cost-cutting. Chief executive Michael O’Leary admitted recently that customers liked the airline’s cheap prices, but loathed how they’re treated.

After a customer service survey by Britain’s premier consumer magazine, Which?, placed Ryanair last among 100 top brands in quality, O’Leary told shareholders: “We should try to eliminate things that unnecessarily piss people off.”

Fat tax for obese passengers and charges for toilet paper — of course with O’Leary’s face on it — were some of the politically-incorrect cost-cutting ideas Ryanair once mooted. Are low-cost airlines stooping too low to make money? Ryan doesn’t think so.

“Ancillary revenue accounts for 30 per cent of the airline’s turnover, and costs will be continually looked at and closely monitored to increase revenue stream,” he said.

Many legacy airlines, which continued to flourish alongside budget carriers, have started own low-cost divisions to explore different markets. But Ryan said most of the budget lines started by legacy carriers have failed.

Asked if low-cost carriers were here to stay or the world will come full circle with passengers seeking back luxury in the skies, the former executive said: “There is no going back on high fares as people have experienced cheap tickets, but there will always be a place for people who want to pay for extra comfort.”

And what is the one mantra that Ryan thinks every airline must keep in mind to run a successful business? “Keep a very close eye on your costs, create a business plan that works, and stay determined.”

Ryan said the proposed EU tax on airline carbon emissions was not justified. “Because airlines flying into Europe will impose a similar charge in their home markets, it will end in chaos.”

Giving his take on the outlook for the aviation industry, Ryan said the Middle East was a rising star, but major opportunities would develop for the BRIC countries as well.

He was all praise for the Boeing Dreamliner which, two years into service, has suffered a string of mishaps ranging from battery fires to fallen parts.

He said Boeing’s teething problem could not be attributed to global outsourcing. “The 787, similar to other new aircraft in the past, has developed some faults. But I personally believe that the 787 will be a resounding success.”

Ryan diverted his “flight” from aviation to public speaking because he wanted to conquer new horizons. “I spent over 40 years actively involved in aviation and felt that I wanted to seek new horizons in business. Public speaking is only one of the avenues I am involved in. I also believe that education is vital for our future entrepreneurs so I am on the board of several universities in the US and UK.”

Ryan’s sense of humour fluttered as he was asked if he had some tips for Air India, which has nosedived from national pride to a pathetic state. “Maybe they should come and ask me!”

— suresh@khaleejtimes.com