Ryanair Finds Success By Keeping It Simple

Michael O'Leary, Ryanair

Chief Executive Officer, appeared on CNBC's Squawk Box to chat about the airline's record profits and continuing growth. In regards to Ryanair competing with other European airlines, O'Leary was confident. "It's not hard to, you know, outrun that lot," O'Leary said. He went on to say that he couldn't compete with an American airline like Southwest, calling them a behemoth in the states. It's simply a market he wouldn't consider getting into. According to O'Leary, there's no need to even try, since there's so much potential for growth in Europe. Ryanair is expanding from 80 million to 100 million passengers a year over the next five years through the purchase of new planes. While they expand, O'Leary said that many other European airlines are loosing money at heroic scales. O'Leary said that Ryanair got their strategy one that Southwest originally came up with: Keep it simple, keep it all the same. "It's all Toyota Corollas," O'Leary joked. He said that the issues with European airlines mirrors that of Europe's major issue of over regulation coming out of Brussels, the de facto capital of the European Union. "The kind of crazy protectionism of these failed flight carrier airlines. You know, we deregulated the airline industry in Europe some 15 years ago. Now Europe is busy truing to re-regulate it," O'Leary said. O'Leary went on to say that instead of creating rules on how European airlines should compete with each other, they should just let the market decide. He said that airline employee unions have lobbyists and strong support in Brussels, which hinder that possibility. "Nobody represents consumers," O'Leary declared. O'Leary does believe it's currently a market where growth can occur, however. He said that it's a great time in Europe for strong companies to do great things, but he maintains that Brussels works against growth rather than supports it. "I think Brussels has become much worse. The original heart of the European Project was going to be a single market, deregulation, and you have free movement of goods and labor," said O'Leary. O'Leary compared the current state of European economic regulation to a political gorilla. "Brussels has three presidents for God's sake. How the Hell? Who we talking to?" said O'Leary. Brussels hasn't stopped Ryanair from being a juggernaut. O'Leary shared some of their secrets to success. The core of their ability to grow is in doing frequent flights on the same paths more often than their competitors. According to O'Leary, pilots fly four to six flights daily, building up experience in the air on the same routes. Within three to five years, the can achieve captain status on a 737. Other officers at other European airlines usually wait through their captains' careers to reach the title of captain. This allows more planes to be in the air with captains who are familiar with their routes. As new planes keep coming in over the next five years, Ryanair is likely to sustain their growth.