If anyone thinks to categorise the insults hurled at each other by two middle-aged superstars such as Elon Musk, the richest man on earth, and Michael O’Leary, CEO of Ryanair, Europe’s leading airline, as an argument between two prima donnas, they are wrong. After calling each other ‘idiots’ for a week, the low-cost airline did not miss the opportunity to turn the controversy in its favour and launch an ad hoc advertising campaign, taking advantage of the visibility it gained for free. Bookings increased by 3 per cent in a few days, significant numbers in a low season month like January.
The provocations
The manager who loves to provoke and tease is at the helm of a group that has made cost control a top priority, a principle that has led Ryanair to be the number one airline in Europe in terms of passengers, achieving high levels of profitability accompanied by costs that are among the lowest in the sector. The savings are reinvested in the company’s growth and in dividends for shareholders. The proof of these results lies in the margins: very few airlines in the world achieve double-digit operating margins. Of the five in Europe that did it in 2024, one is Ryanair, the other three belong to the IAG group (Iberia, British Airways, Vueling and Air Lingus) writes Bernestein analyst Alex Irving. It saves on everything from advertising costs to on-board wifi, the latter the fuse that sparked the controversy with Elon Musk over his Starlink jewel, the satellite system for the internet that the Irish carrier aims to install free of charge on board its 640 aircraft.
History of savings
Ryanair is an all-round low-cost company. For more than three decades – ever since Herb Kelleher, founder of the American Southwest Airlines, the world’s first low-cost airline, unveiled its secrets to Michael O’Leary – the airline has always pursued the goal of low operating costs in order to obtain low fares. The company follows the basic principles of low-cost aviation: fast turnaround times, one aircraft type, high productivity, point-to-point connections. It also extends this approach to other areas such as marketing. Why pay if you can get it for free?
Little decorum but lots of revenue
If you look around, airline advertisements are everywhere, except for one, Ryanair: Europe’s leading airline is nowhere to be seen. It is a deliberate choice. Advertising costs money and Ryanair prefers not to spend it. To quote CEO Michael O’Leary: ‘When the company was launched we had no money for advertising. So we had to come up with something to attract media attention. I don’t mind dressing up as a fool or making silly faces if it helps. Frankly, I don’t give a damn about my personal dignity’.
Launching a route to Venice? O’Leary wears a gondolier costume. In Spain? As a bullfighter. Some are controversial, such as the idea of charging passengers for the use of the on-board toilet, or introducing a differential fare for those who are overweight, or travelling standing up to carry more passengers, anything to lower costs and get noticed by the press. Down to the last exaggeration, not printing the boarding card to avoid the cost of paper. The message is always the same: if you want cheap air fares, fly ‘uncomfortable’ with Ryanair.
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