The EU Refuses to Reimburse People Who Fly on Discount Carriers

Ryanair CEO Michael O'Leary delights in insulting his hosts for 17 minutes in this presentation

By way of oblique introduction, the subject of senior executives getting paid too much has been aired quite a lot of late, and for sure, there are a lot of senior executives who seem to add no more value to their work and their company than does a person fulfilling the most mindless of routine tasks on the company’s production line.

There are also a lot of senior executives getting a ‘free ride’ as a result of the company’s (and its people’s) past brilliance, and there are others who benefit from ‘a rising tide lifts all boats’ – in my area, we talk about the plethora of ‘Microsoft millionaires’ – ordinary people who just happened to be working for Microsoft at the right time, and getting bonanza bonuses due to the (way back then, not now) soaring value of their stock options.

But there are also some executives who clearly deserve every penny they earn.  This is even true in the airline industry, and if you think of some of the world’s most successful airlines, they often have, either now or in their past, a high profile ‘unique individual’ who was at the helm during a critical part of the company’s history and growth.

Two examples in the US would be Jetblue (a company that owes its success to its founder, David Neeleman, now deposed from office) and Southwest (a company that owes its original success to Lamar Muse, subsequently deposed, and its continued success to Herb Kelleher, now essentially retired), with a third possible example being Virgin America, trying to seize a free ride on Sir Richard Branson’s whimsical coat tails.

The same is true off shore.  Two of the largest discount airlines in Europe are both largely the creations of single charismatic individuals.  Easyjet owes its success to (now Sir) Stelios Haji-Ioannou, although of late the airline and its founder have been rather at odds with each other.

And then there is Ryanair, with its CEO being the deliberately controversial Michael O’Leary, a man who delights in tweaking the tails of tigers, and who regularly makes a point of threatening to charge passengers for using the toilets on planes (or, perhaps even worse, to simply remove the toilets entirely and replace them with more seats).  Everytime he makes this empty threat, he gets millions and millions of dollars worth of free publicity, and his airline and its success embodies the proof of the notion that while passengers might want better service, more amenities and inclusions, they steadfastly refuse to pay for them and will rush to take a lower fare, no matter how little is included in its price.

O’Leary deliberately attempts to shock (and spectacularly succeeds – as witness this video clip which contains him reveling in making X-rated suggestions about what he’d offer passengers in a notional new business class cabin on his planes – you can skip to the 1 minute point to get to the ‘good bit’ if you like).

Last year the EU daringly invited him to participate in their Innovation Convention, held in Brussels.  This was daring on their part, because O’Leary and the EU have enjoyed a semi-confrontational relationship over the years, and whenever one puts a microphone in front of him, there’s no telling what he may say.

O’Leary accepted with alacrity, and his address shows him at his charismatic and controversial best.  He immediately launches into an open and savage attack on the EU, and it just keeps getting better from there.

The video runs 17 minutes in length, and it wasn’t my original intention to watch it all.  But the more I watched, the more impressed I was.  He seemed to be talking entirely without notes, and was incredibly entertaining and informative.

I urge you to watch at least the very first few minutes where he manages to roundly insult the inviting organization, and then, if you are like me, time will fly and you’ll realize you’re still watching.

And now, at last, a link to the heading of this item.  One of my favorite parts was from about the 6’10” point where he tells how the EU invited him to the conference and offered to pay his airfare and taxi/limo transfer from the airport and hotel.  You might think it a bit strange to offer to pay for an airline CEO’s flight on his own airline, but that wasn’t the point he proceeded to make.

So O’Leary was flying on a cheap Ryanair flight instead of a very much more expensive full service airline – he says that if he’d flown from Dublin on Aer Lingus instead it would have cost almost ten times as much (probably an exaggeration).  If O’Leary hasn’t allowed his penchant for exaggeration and shock distort thing, it seems that when he told the EU he would fly on his own airline, he was told they wouldn’t reimburse him.  There is an EU policy not to reimburse travel on low cost airlines, only to pay for the cost of travel on full fare airlines.

This policy beggars the imagination, and highlights all that is wrong with the overpowering and unelected bureaucracy that threatens to overwhelm Europe with ridiculous legislation and pork barrel politics of a type that dwarfs anything ever countenanced in this country (did you know that every year the EU fails its own audit – it can’t even honestly account for its pork barrel politicking).  One could opine that it isn’t just the Euro that is a failure but the entire concept of the European Union and its bureaucractic master class that has been created.

But, back to O’Leary’s presentation.  Highly recommended.  And if you make it to the end, there’s a very amusing part where, as he sits down again, a characterless EU official attempts a small barb back at O’Leary, but gets instantly shot down by O’Leary’s razor sharp and lightning fast riposte.

One suspects O’Leary will not be invited back again this year.

Lastly, here’s an interesting example of Ryanair innovation – but for us in the US, most things are covered by our home insurance policy.

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