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McCreevy joins Ryanair board

by Frank Schnittger Fri May 28th, 2010 at 11:39:42 AM EST

Of course in no way was former EU Commissioner McCreevy's conduct of his office influenced by his prospects of directorships in the private sector on retirement including this long-rumoured appointment.  Indeed Charlie McCreevy and Michael O'Leary should make a very good fit.

Both have mouths which operate considerably in advance of their brains and enjoy the lifestyle of the country squire.

McCreevy joins Ryanair board

Charlie McCreevy has today officially joined the board of Ryanair

The announcement comes just weeks after the European Commission cleared the way for the newly retired commissioner to take on the new role with Ryanair Holdings.

The former Minister for Finance has become a non-executive director of the no-frills airline together with Declan McKeown, a former audit partner at Pricewaterhousecooopers.

The European Commission gave the go-ahead for Mr McCreevy to join Ryanair's board at the start of May but restricted his work as a director to avoid any perception of a conflict of interest.

Mr McCreevy, who left the commission in February, has joined the airline's board during a time when his former employer is conducting seven long-running state aid inquiries into some of its contracts with European airports.

He will not be allowed advise Ryanair on any case involving its business which came before the EU executive's internal markets division during his time as commissioner, which began in late 2004.

So that's all right then. A whole three months have elapsed since McCreevy was in charge of enforcing the EU's Internal Market policies which resulted in serial investigations into Ryanair. No doubt the EU will have installed bugging devices on McCreevy to ensure that he complies with the stipulation not to use his knowledge of previous cases to Ryanair's advantage. And the EU is going to enforce these restriction and punish any transgressions how?

Nevertheless I suspect O'Leary may have miscalculated.  It seems unlikely that McCreevy left behind many friends in the Berlaymont and some who may enjoy getting their revenge on him against Ryanair by way of proxy. Ryanair has been one of the most high profile beneficiaries of market liberalisation within the EU and yet has rarely given the EU credit for anything.  O'Leary did campaign for the Lisbon Treaty in the second referendum, but as usual, that campaign was more about him, and less about doing anything constructive for the EU.

The irony is that Ryanair has probably done as much as any other European company in fostering EU integration by ushering in an era of cheap travel for those who might not otherwise have been able to afford it.  It uses modern, relatively fuel efficient jets (albeit from Boeing), and its policy of using cheaper secondary airports wherever possible has resulted in very good on time and lost luggage statistics whilst broadening the base of tourism throughout the EU.  Ireland as an island nation is very dependent on air travel and I would shudder to think what would happen to fares if either Ryanair withdrew or if it gained a monopoly.

What I find most extraordinary about the Ryanair business model is how gratuitously offensive it can be towards their passengers and staff. Air travel may have become increasingly commoditised in recent years, but there is no need to treat your passengers as cattle. O'Leary has a genius for achieving free publicity through his outrageous pronouncements but the brand he has thereby created has been seriously devalued as a result.

O'Leary may trumpet the cheaper fares often available on Ryanair, but the fact is that many people refuse to fly Ryanair at any price, and many fly with them only because and when they are cheap. Yields (ticket prices on Ryanair flights) are down 12-20% in the last three quarters mainly because of the recession, but also because customers are prepared to pay more for other carriers and get treated with more dignity in return.

Air travel is nothing like as glamorous or as luxurious as portrayed in some airline commercials, but neither do you need to make already stressed passengers feel like shit when there is no need to do so.  Long walking distances to departure gates, insufficient lounge seating, no seat reservations, inadequate cabin seat room, little provision for elderly or disabled passengers, and very poor customer service when flights are disrupted save little money but result in Ryanair only being able to attract passengers by charging much lower fares.

As Ryanair moves from being an upstart start-up to being the largest airline in the world in terms of international passenger numbers it badly needs to develop a new brand image and customer service ethic.  O'Leary is not the right man to do this, and appointing McCreevy is a step in the wrong direction.

"Can the last politician to go out the revolving door please turn the lights off?"

- Migeru

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Fri May 28th, 2010 at 04:34:44 PM EST

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