Michael O'Leary - "only four airlines will survive"....

[Jet2LeedsTom]

...and surprise, surprise he tips his own to be one of the lucky ones.

So - soon just BA, AF, Lufths and good ol' Ryanair will be left in Europe. Which surpriseses me 'cos I thought Easy, BMI, Jet2 were doing just fine, and those are just the British locos.

Is this more bleating from this self-publicist or reasonable predictions from a man in-the-know?

(source Sky News, which may of course be twisting things).

[wobble2plank]

Well I suppose we can put BMI in the Lufthansa folder now, along with Austrian Arrows, Swiss, Brussels Air and soon to be SAS!

One down, how many more to go?

[no sponsor]

He is causing mischief by causing worry to those who are thinking of booking flights on airlines other than Ryanair by announcing on BBC breakfast at 730am that 5 airlines would go bust in the next 6 weeks. On Sky news at 8.15am, he then increased the number to 8.

Blatant advertising.

[Capot]

Michael O'Leary 's motive in spreading the word like that is to engineer a loss of confidence resulting in people not paying for bookings with the airlines concerned, thus damaging the cash flow of the airlines concerned, and triggering a rapid slide into bankruptcy.

It's a deliberate, classic and very effective tactic, so long as it does not backfire.

Which it won't; Ryanair has huge reserves, augmented by the large financial benefit derived from Boeing's problems.

[Willowfly]

My thoughts exactly no sponsor and Capot. He is merely creating hype to unsettle pax and steer them in his direction - underhand publicity.

[JW411]

In fact, just the sort of tactics that BA et al used to get rid of Fred Laker.

[loggerhead]

In fact, just the sort of tactics that BA et al used to get rid of Fred Laker.

Except this time, it won't work!

[doubleu-anker]

What an arrogant, conceited piece of work this guy comes across as. Just getting too big for his boots, altogether.

I just hope he has egg on his face in the not too distant future.

[JW411]

I agree, he is almost as arrogant as Lord King was but not quite.

[davidjohnson6]

I believe the technical term for this kind of marketing is FUD - 'Fear, Uncertainty and Doubt', a specific form of a more general 'Appeal to fear'

I think the term was first coined in 1975 with IBM persuading people 'Nobody ever got fired for buying IBM equipment' and spread from there

Fear, uncertainty and doubt - Wikipedia, the free encyclopedia (http://en.wikipedia.org/wiki/Fear,_uncertainty_and_doubt)

Appeal to fear - Wikipedia, the free encyclopedia (http://en.wikipedia.org/wiki/Appeal_to_fear)

[v6g]

Fear & uncertainty are indeed powerful marketing techniques. It's more than proven it's worth for religion over the centuries and it's clearly evident in the latter stages of the current US election campaign.

[BIGBAD]

BMI were never loco, they were rubbish but never loco

[Whispering Giant]

It's funny how he's the one saying that his is the only airline that's financial stable and how he's the only one thats going to still be here etc etc.
What he fails to point out is that his is the only airline that's laying people off (in the region of 600 i believe if previous posters have been correct ) - putting staff and crew on unpaid leave, grounding 20 aircraft, closing down bases and routes everywhere if he cant get his own way and get everything he wants for free and this morning it was reported that Ryanair have reported a loss of 46% on there profits for the last quarter where as the airline I work has reported a record profit along with the likes of Jet2 and several other airline's.
So something does not quite add up here ! - if anything it looks more like his own airline is the one suffering the most and would be the most likley one to fail.
Sure would be good to see that smug smile wiped off his face.

[timelapse]

RYANAIR TO OFFER £8 TRANSATLANTIC SH*TFEST - The Daily Mash (http://www.thedailymash.co.uk/index.php?option=com_content&task=view&id=1370&Itemid=59)

[2Planks]

Whispering Giant, all the actions you describe seem to point to a company battening down the hatches for a storm - which FR can do because of their hard nosed (and heard hearted, I agree) approach to business. However, this probably means they will survive ahead of others. Also be careful of comparisons - you don't name your airline or 'others' but Jet2's report was for Jan - Jun, FRs report is Apr - Sep a period which did not include easter this year and also a period when the price of jet juice hit the rafters. In addition, FRs share price rose today so it can't be all bad; there's a lot less emotion there regarding MOL than on here...

[GemDeveloper]

2Planks...

I am less sure... the market price movements are based very much on sentiment, and that sentiment may be as much about the movements in the overall market as they are about individual shares... remember that the FTSE is dominated by a number of very major players, particularly the big energy companies, and when their shares go up, the others get dragged up with them… and vice versa…

And then… apropos to FUD… indeed, also well known in the tech world... where it's usually sown by competitors when a new product or operating system is due out. In other words, change and newness are dangerous -- best to stick with what hasn't worked before because who knows, some day it just might work.

Current global politics, anyone?

[Fanatic]

Methinks he doth protest too much...

Any cr*p airline will do badly in time of crisis.
Seem to remember Airtours/Mytravel having huge cash reserves months before the real figures were revealed.

How many times has this dwarf predicted a blood bath and always Jersey Euro at the top of his list? Must be his biggest rival. Now they announce record profits while O'shortone concentrates on filling seats at all costs. Has he no plan B?

If FR are the only LOCO left not only will I eat my hat and his (no doubt very short) shorts but I will take the train.

[CornishFlyer]

Gonna take stab in the dark and guess that Whispering Giant works for FlyBe. I also have a friend that works for them and indeed, they are in a good position but also they have the control of the majority of the UK domestic market outside of London so they'll probably survive also. Jet2 have money coming in from other directions other than just pax with their freight etc. MOL is way off the mark and we all know this. It's just scare tactics for the public. I like the way he left out it's biggest competitor, easyJet. What does he think is gonna happen to them? Does he think they'll just disappear? I think not. MOL is just talking crap but hey, the public don't know the full extent of it unfortunately

[MOLWillie]

With Lufthansa on LHR's doorstep and RYAN..whatever going to cross the bigger pond, BA are in for some competition.

[BEagle]

Every time the idiot BBC trot Mikey-the-Pikey in front of their Breakfast TV cameras, he comes up with yet more free advertising for his tawdry little operation. Why don't they cut just him off as soon as he opens his yap to tout his latest too-good-to-be-true hores$hit?
http://i14.photobucket.com/albums/a341/nw969/Internet/zxzxz.jpg

His Transatlantic strategy hinges on being able to pick up long range aircraft at rock-bottom prices from either Airbus or Boeing. Both of whom he claimed have 'collapsing order books' at the moment. I'm sure that comment will impress them both......

Hopefully neither manufacturer will lower their standards to deal with O'Leary in this market.

[2Planks]

Beagle - hardly a little operation with 160 odd aircraft (even if a few are having a rest for the winter). Given that MOL is still feted as a saviour in Renton because of his 2002 orders I am sure that Boeing will happily deal again and not see it as a lowering of standards.

[Nightfire]

Oh, sure, Boeing and Airbus will happily sell some planes to MOL, if he pays for it.

But low-cost long haul will never work! No way; unless Ryanair deliberately operates those trans-atlantic routes at a loss, just to enhance the European network.

In this case we will see how good MOL's calculations were.

AirBerlin tried that, when they inherited LTU's fleet of A330's, and it turned out to be a disaster.

[captplaystation]

You may think he is full of crap, but he ( as he himself claimed) "raped" Boeing in the past & could do so again. If Boeing can at some stage actually get around to deivering the 787 there are a lot of Airlines out there with embarrasingly large orders that might be inclined to hold off a while. Boeing won't want to see rows of "wunderjets" standing idly by . . . et voila.
Airlines like Kingfisher have been happy to let the likes of Arik Air pick up new build airframes that they ordered in better times, so I don't think there is any
market shortage of widebodies probably looking for a "loving home" :rolleyes:
You should never underestimate his business acumen (and before we discuss fuel hedging I don't think Southwest fared any better) whatever you think of his ethics. Don't want to see the roster though. . . . Good news, only a 2 sector day :ooh:

[calypso]

Southwest hedged at 51$ per barrel. So yes, they did fare a LOT better.

[captplaystation]

I read an article somewhere today that Southwest & Continental had both lost a lot of money by screwing up hedging,don't know exactly what period was being referred to, think it was written in here somewhere.
They ( SW) had made money but a lot less than they would have done. I stand to be corrected but sure I read that today.
I know he is a bit gobby & you can call it dirty tactics, but nonetheless would you bet a months wages on Skyeurope/ Air Berlin & a few others being around next Spring ? nope me neither. I don't wish any of them misfortune, we don't need more Boeing drivers on the market ta very much, MOL may not be entirely wrong even if he is a "little";) prone to creative exaggeration.

Edited to say, the article in fact said SW fuel hedging contracts had lost between 2 & 2.5 billion $ in value due to drop in fuel prices which may have effect on 4th quarter results, however they declared themselves happy anyhow at drop in prices.
Seems with hedging in these times you screw yourself whichever way you play it.

[MOLWillie]

Bullhooey there JLT.

The one that is going to bite the dust first will be ole mother hen BA.

[Locked door]

I think not MOLWillie, BA's target this year is to break even. Even if they lost £3mil a day they have enough cash in the bank tolast two years.

Others are not so strong......

[interpreter]

The man himself has a major Achilles heel - and he knows it. The wind and the puff are to intimidate others but in fact it is his own staff who should be looking around. It will all catch up with you Michael - pride comes before a fall. And the wee folk wont help you this time.

And so many new airframes all looking for another renter!

[MOLWillie]

Most likely will happen Locked door, but BA are burdened with a hi cost structure for the future.

[anartificialhorizon]

What a self publicising pilchard that guy is!

A quick surf on the net brings up 62 low cost carriers alone in Europe! And how many more full service carriers? So more than 58 plus others will go bust eh Leo?

The guy is so uneducated about the AIRLINE industry it is funny.

Cannot wait to see him come undone.

[MOLWillie]

FR $236 mil for the second qtr is ok.

ATW Daily News (http://www.atwonline.com/news/story.html?storyID=14580)

[pilot999]

A brilliant guy, I'm glad he's my boss and not yours.

[Midland Alpha9]

That would be the BMI which has lasted 70 years, the past 27 years going head to head fighting state aided carriers without any hand outs of it's own!:D:D

[calypso]

For accounting purposes Southwest had to mark to market their fuel position. This means that with fuel at 140 d/barrell they where worth XXXmillions (ie they had a massive profit on the fuel postion alone)
now that fuel is 60 d/barrell they had to adjust their account to the fact that they are only only worth XXX millions (ie the massive profit on the fuel postion is no longer there). The difference of the price at which they hedged (51) and the actual price has reduced.

In any case they hedged at 51 and they are sitting very pretty indeed.

[MOLWillie]

FR slice it again in these times we're in.....$236 mil for the second qtr.

ATW Daily News (http://www.atwonline.com/news/story.html?storyID=14580)

[Nightfire]

Pilot 999: And I'm glad he is YOUR boss, not mine. :p

[6chimes]

The little lunatic from the peat bogs should be made to explain his comments and what 'facts' he has as an industry leader that allow him to make such comments that do indeed put fear into the public.

At a time of financial uncertainty across the aviation industry, someone that feeds off it and makes comments that could ultimately cause further distress is not only a disgrace but liable to all those that end up on the dole queue because of it.

If he can produce the evidence then fair enough. If not he should be made to apologise.

There is a crisis in the banks at the moment but you don't see any bank bosses coming out and telling the public that they should not bank with bank xxxx because they will go under. That is because they know that confidence in the whole industry affects everyone. The little peat bog rat has no morality and is interested in himself and to hell with anyone else.

6

[HZ123]

Here @ waterside we value MOL's comments and it does not serve some of you to heap criticism on him. He has been and is very sucessful and may well know a great deal more on this industry than most of us put together. I doubt that there are any threaders that have sat at the table with Boeings and told them just how much he will pay them. The guy has changed the face of airline travel and still needs to do a lot more to break the mould.

[davidc8]

A lot of what HZ123 says about MOL and his achievements are true. However he seems to continue to believe that all publicity is good publicity which it isn't. He is a divisive figure as this thread shows only too clearly. Here in Luton we tend to keep a lot more of our opinions to ourselves. You won't find Andy Harrison specualting on who is or isn't going bust because confrontational comments always cause somebody offence - and they may well be people who could be your customers. Ray Webster was much the same and Sir Stelios himself tends to keep his nose out of confrontation. Still, you can't deny that MOL is entertaining!

Finally no airline - even RYR - is immune to the challenges all airlines are currently experiencing, but if I was a betting man I'd put money on EZY to hang on as long as anybody else. But what do I know!

[Capetonian]

Against my advice, elderly, well-travelled and intelligent friends of ours decided to travel on Ryanair for a break to Spain. I did the whole process, on their computer, printed everything out, pointed out the conditions and rules, highlighted the relevant parts, and warned them about the rigorously applied restrictions.

The result was that they spent 3 weeks prior to departure working themselves into a state of nerves about it, and when they travelled they were charged extra for hand luggage which had been weighed and measured and which apparently conformed to the parameters. The agent forced them to pay for new boarding passes as they'd folded the pre-printed ones across the bar code and it was apparently not machine readable.

They found the experience on board the flight thoroughly unpleasant due to all the noise, announcements, haranguing, and the surly and clearly overworked cabin crew, and as a result had a miserable trip. This airline is to be avoided by anyone except those who enjoy being flagellated at every step of the process.

They abandoned Ryanair for the homebound flight and bought tickets on easyJet - as they said 'a totally different and superior experience in every way.'