War in Irish skies as regional rival claims Ryan Air boss O'Leary told him 'F**k off'
Monday, 4 August 2008 (Belfast Telegraph)
The war of words between two of Ireland's top airline tycoons has taken a bitter turn with the head of regional airline Aer Arann claiming Ryanair boss Michael O'Leary told him: "F**k off back to Connemara where you come from."
Aer Arann boss Padraig O Ceidigh says the abusive remarks were made during a meeting which he called with the Ryanair chief late last year to try to sort out the increasingly hostile situation between the two airlines.
Mr O Ceidigh also alleged that Mr O'Leary, who is one of Ireland's richest chief executives, pretended to play the fiddle on several occasions during the meeting when the Aer Arann boss asked him why he was trying to put his comparatively small airline out of business.
But yesterday Ryanair said they would not comment on the matter unless they were told the exact date in 2007 of the meeting between the two men.
"Ryanair has been attacking me and my business for the past two years. Their strategy is to close down regional airports and Aer Arann.
"So I called a meeting with him some months back to ask him face to face about what he was doing," explained Mr O Ceidigh.
"[His] airline has about 55 million passengers, [but] they're focusing on a small little airline with one million passengers? It doesn't seem to add up for me that he is putting so much time and energy in to that.
"So I rang him up last year and I said 'Can I meet you to see what the story is and to see what you're at here?' We met in his office in Dublin airport at about half past eight in the morning and I said 'Michael, what are you trying to do to me? I'm not in your space. I have no aspirations to be in that league, I'm just trying to run my own business.'
"That's when he told me that he'd give me a bit of advice and said: 'Why don't you **** off back to Connemara where you came from?' Then he said in no uncertain terms that he was going to take my business out and either take over or do the same to Aer Lingus."
Although the Aer Arann boss doesn't believe the alleged remark about Connemara was intended as a slur against people from the West of Ireland, Mr O Ceidigh said he believes Mr O'Leary was making it clear that he should get out of the airline business if he could not handle Ryanair's tactics.
"I took it to mean that 'This is the situation' and that 'This is the aim'. In other words, 'If you can't stand the heat then get out of the kitchen.' And I think that was just his way of putting it."
He added: "I wasn't surprised by his comments, he has made ruder remarks in his time, but I just think that if this is the image of the Irish business person abroad -- because he is a world-class airline manager -- then that's certainly not a good thing."
Mr O Ceidigh went on to say that he was particularly offended when Mr O'Leary pretended to play the fiddle while he raised his concerns.
"What really hurt me was the way [he pretended] to play the fiddle. The Connemara remark didn't damage or hurt me but the fiddle thing was crazy.
"I was just asking him what his strategy was, what was he was trying to do, what was his beef with Aer Arann and he told me he doesn't have beef with Aer Arann.
"I said 'Michael, you've 700 routes I've only 40 but you're focusing on my key 40 routes. I said to him 'It's about you competing with me rather than me competing with you'. And then that's when he started pretending to play the fiddle. He did that on two or three occasions during the meeting. I got very frustrated but I didn't say anything to him. I realised it was probably a mistake for me to go and meet the guy. There was no point on arguing with him."
Mr O Ceidigh also claimed that at the end of the meeting, Mr O'Leary insisted on walking him to his car through an open plan office rather than down the original route that he had come in.
"I came up one stairs to meet with him and [afterwards] I was walking down the stairs and he said, 'No, I'll walk you out.' He walked me through the office where there were about 40 or 50 people working in an open plan office. Afterwards, I just felt that the reason he wanted me to go out that way was because he wanted to show his staff that I was trying to go to him on my hands and knees and that he had me where he wanted.
"I felt that was the reason because I had said to him 'I'll go out this way, I'll go out this way, the way I came in' and he replied 'Ah no, no, no, we'll go out this other way', and he walked me the long way around through the office."
Despite the meeting, Mr O Ceidigh says he is not intimidated by Michael O'Leary's so-called 'bullying tactics' and believes his company can maintain its position as one of the top European airlines.
"He uses a lot of bullying tactics towards Aer Arann but I'm not worried about it. Worrying is not a productive pastime -- I've a tsunami hitting me and that's Ryanair and I have to do what I have to do to protect my business and survive this tsunami.
"We have 1.2m passengers; we're up about 10 per cent on last year in relation to passenger numbers, we have new airplanes that we have taken delivery of and some more that are on the way. We also received the Palme D'Or some time back, which means that we are one of the top European regional airlines.
"But all that's not withstanding that we are in extremely difficult and challenging times. We are changing our business model to look at doing more third party work for example in relation to Jamaica we're helping them set up regional airlines out there, so we are diversifying our model any way we can do so.
He continued, "It's just very unfortunate that a fellow Irishman is trying to close me down. The future is looking tough and there are some very challenging times ahead. A lot of things have gone against us. Fuel is the big thing and I don't know what will happen with the economy, we'll have to just wait and see. But I believe Aer Arann is reasonably solid in the current climate and we are looking forward to maintaining our position as one of the top European airlines."
Asked how he felt about Mr O'Leary's comments on a personal level, Mr O Ceidigh said, "I was taken aback but you have to have a tough skin in this business. I want Michael O'Leary to know that you can take the man out of Connemara but you can't take the Connemara out of the man. And I ain't giving up easily."
And he added, "I don't want it to get personal between myself and him. I don't want to throw stuff at him in the media; I'm not interested in a media war with Michael O'Leary."
The airline tycoon also stressed that he wished to acknowledge Mr O'Leary's success to date, describing his achievements as "unparalleled".
"I think it's important to say that in relation to the success that Michael O'Leary has achieved with Ryanair, it's unparalleled.
"I think he has created a huge success out of the airline and I very much admire that, and I wish him and the team in Ryanair well and even more continued success.
"I have huge respect for what Michael O'Leary has achieved but I think he needs to realise that Ryanair could be a lot more successful if their style was more ethical and not simply a 'my way or the highway' approach. You don't make money by screwing everyone around you."
In the past, Michael O'Leary has questioned the viability of Ireland's regional airports. However there is considerable money to be made in operating flights out of peripheral areas.
The Republic's Department of Transport and Marine subsidises airlines to operate flights from regional routes to Dublin.
These so-called public service obligation contracts are awarded every three years and airlines are invited to tender for them.
The latest round of contracts were awarded earlier this year and, between them, Aer Arann and Ryanair won the most lucrative slice of the considerable €44.6m pot of funds, which come courtesy of Irish taxpayer.
Ryanair won the contract to operate flights out of Kerry, in a contract worth €5.2m over three years. Aer Arann won contracts for Galway, Derry and Donegal/Sligo, generating a total of €33.5m for the airline. The value of the contract from Donegal/Sligo alone is €16.9m, while it is paid €10m for the Galway route and €7m for Derry.
City Jet also won a €4.8m contract to operate flights from Knock, but the company is unable to service the route.
Meanwhile, when asked to respond to the claim that he had several months ago told Mr O Ceidigh to "F**k off back to Connemara where you came from", a spokesperson for Mr O'Leary said "Padraig O Ceidigh's claim that he 'called a meeting with Michael O'Leary' in recent months is entirely untrue.
"Michael O'Leary has had no request from Padraig O Ceidigh for a meeting in recent months, and nor has any such meeting been called or taken place during the last seven months of 2008. Since no such meeting took place, clearly the claims made by Padraig O Ceidigh about the content of this imaginary meeting are also fictitious.
"Michael O'Leary is disappointed by these latest false claims by Padraig O Ceidigh, which are sadly consistent with the false claims Padraig O Ceidigh recently made to Irish Entrepreneur Magazine."
When it was clarified that the meeting was alleged to have taken place in 2007, Mr O'Leary's spokesperson refused to comment further until an exact date, time and location of the meeting had been produced.
Ryanair last week announced that their profits in the first quarter of this year had plunged 85 per cent and that they were likely to lose €60m in the year to next March. As a result, a whopping €1.3bn was wiped off the value of Ryanair's stock price last week, with four million shares changing hands last Friday -- when Ryanair closed down at €2.34 a share. This has come about because of airline's failure to hedge against the massive increases in oil prices. Hedging allows airlines to buy several months worth of oil at a fixed price and many airlines hedged at about $75 a barrel.
In contrast, Michael O'Leary refused to hedge and his airline has been paying the market rate for fuel, which has gone as high as $140 a barrel. O'Leary's gamble has severely dented the airline's short-term prospects.
But despite the turmoil in the airline's share price Mr O'Leary, who turned the airline into the success story of world aviation has been awarded a bonus of €195,000 bringing his salary, pension and bonus package for the year ended 2008 to €1.2m, a 23 per cent increase on his package last year.
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