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Ryanair CEO: »The Danes have misunderstood us«

Interview. Ryanair CEO Michael O'Leary gives his views on myths, power and opposition in the Danish capital awaiting this Wednesday's expected ruling by the Danish Labour Court.

There are many things that puzzle one af Ireland's most successful businessmen when asked about Ryanair's reception in the Danish capital of Copenhagen. Michael O'Leary spews out phrases like »that is complete nonsense«, »they are incompetent«, and they »have misunderstood us«. He bangs his fist on the meeting table. He pulls the oddest faces, rolling his eyes towards the white plasterboard ceiling, and repeatedly makes simulated farting sounds.

Ryanair's CEO of 21 years speaks with his whole body when presented with arguments, facts and statements which fit in poorly with his image of the world. And when Berlingske meets him on June 25, on his home turf in Dublin, he appears visibly irritated and concerned by several elements of the situation in Denmark.

Aarhus støtter Frank Jensen og dropper Ryanair

The opening of Ryanair's new Copenhagen base has taken a different course to what O'Leary expected. Not only have local unions been up for a fight; both politicians and investors have also joined in what he sees as a hysterical campaign against Ryanair. The conflict between Europe's biggest airline and the unions, with their demand for a collective agreement, is a test for The Danish Model in the face of an increasingly more globalised world where traditional boundaries are eroding.

To O'Leary the clash in Copenhagen carries an echo of what has happened in other European cities where he has planted the Ryanair flag. He has become the favourite villain of trade unions with his bold marketing of Ryanair as the »naughty-boy-in-class« - a no-nonsense no-frills airline that prides itself on having special terms of employment that include no sick pay for neither pilots nor cabin crew - as well as the risk of almost immediate dismissal for talking to the media.

But this time, opposition from both unions and politicians has been much stronger than expected, and the effect on Ryanair's reputation does worry him, he freely admits.

»We did not expect the sea of negative publicity and the fact that nobody would give us a fair hearing in Denmark,« he says.

The Ryanair boss also did not foresee a scenario in which some of Denmark's biggest investorsmwould sell their shares in the company and publicly criticise the airline which has otherwise been rewarded with significant leaps in its share price since going public in 1997.

Rickard

Eighteen minutes into the interview Michael O'Leary gets up from the meeting table, pushing his chair away. He has just been asked about his opinion of PensionDenmark and ATP - two Danish pension funds who have sold their shares in Ryanair.

»They are incompetent, and they are NOT among Europe's biggest investors,« Mr. O'Leary states, emphatically stressing each syllable. At this stage, he has moved to his desk and raised his voice.

»Who is ATP actually? It is certainly not one of Europe's biggest investors,« says Mr. O'Leary, denying the fact of the pension fund's size; it is - according to ATP one of the biggest investors in a European context.

Michael O'Leary walks back to the meeting table with a sheet of papir in his hand. He has printed a price graph showing Ryainair's success on the stock market.

»Here is the 12 month performance of our shares. A year ago we were below 8 euros and today the price is currently 12.30 euros. There you go.« He hands us the paper.

»Congratulations to the visionary Danish Pension Funds.«

ATP's sale of its Ryanair shares and PensionDanmark's decision to blacklist Ryanair, thus ruling out any future purchase of Ryanair shares, are ridiculous in O'Leary's opinion. He laughs loud and long and grabs his forehead when presented with PensionDenmark's reason for blacklisting the airline: that it does not live up to ILO conventions safeguarding workers' right to unionise.

Ryanair

PensionDanmark say they examined conditions at Ryanair thouroughly and entered into a dialogue with the airline concerning breaches of international conventions. When Ryanair refused to budge, the pension fund decided to sell its shares and blacklist the airline.

»I don't care about investors who are waffling on about ILO conventions. I presume that pensions funds are to obtain the best returns - not to be running around pantry to some political mop,« O'Leary says.

That is not how PensionDanmark sees it. The pension fund told both this newspaper and the public at large that it investigated whether Ryanair complies with ILO conventions?

Michael O'Leary intererrupts the question with another round of laughter.

»What? Investigating whether we comply? You don't have to comply with ILO conventions by the way. You have to comply with Irisih law and EU law, and we comply with every single Irish and EU law. There is no EU law or regulation that we don't comply with,« Mr. O'Leary says.

So ILO conventions are worth nothing?

O'Leary replies with a farting noise and waves his right arm as if to chase away a fly.

»It is a not important international labour organisation,« he says.

But some investors say that you have to comply with ILO conventions if you want to be in their portfolio?

»Those would not be investors that we would really care much about being on their list, if that's the basis for their investment decisions,« Michael O'Leary says.

»I assume the same pension funds are investing very heavily in North Korea - probably in the Russian economy as well and anything else that gives the kind of return they want,« he adds.

He seems deeply puzzled.

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»Would these investors not anymore invest in Google, Facebook, Microsoft? All of whom are non-union companies. Do they invest in Alibaba or any of the Chinese tech companies? Or do they only invest in ILO compliant Scandinavian model companies like SAS and Norwegian?« he says with clear ironic distance.

»If your pension money is with those pension funds, I would be taking my money out of there very quickly.«

Michael O'Leary's office is on the second floor of Ryanair's new headquarters some eight minutes' drive from Dublin Airport. On arriving, it is impossible to miss the sign adorning the facade of the building: »We saved Europeans 9.1 billion euros in 2013.«

The sign is due to be replaced soon. This year Ryanair expects to deliver more than 11 billion euros in savings to its customers - as calculated by Ryanair itself by comparing with average prices at the old, more expensive network carriers on the same routes, divided by the number of passengers. Success in Copenhagen and Scandinavia is essential if Ryanair is to fulfill its high growth ambitions. And so the unexpectedly fierce opposition in Denmark does hold the management's attention. Partly because Scandinavia is a lucrative market where Ryanair expects to have a unique position with its ultra low prices. And partly because the combative spirit might spread from Denmark to country after country. A defeat in the Danish Labour Court could help set a precedent, and Michael O'Leary wants to avoid a chain reaction at all cost. That is why he is fighting against union demands in Denmark.

»If we sign a collective agreement with the Danish unions, we will then be asked to sign 15 French collective agreements, 55 Spanish collective agreements and a lot of Italian collective agreements.

We are not going to do that,« Michael O'Leary says, adding:

»We have 350 aircraft based in 74 different bases right across 30 different European countries, and when we move an aircraft - from Warsaw to Copenhagen - do we then have to say, sorry we now have to make a new collective agreement with the Danish unions. No! We don't have time for that nonsense.«

Ryanair's top management sees a real risk of defeat in the Danish Labour Court this Wednesday. But a battle lost will not lead O'Leary to give up on Denmark. The outspoken Irishman is intent on succeeding in the Scandinavian market and wants to win significant market share over the next few years.

»We will continue to fly into Denmark with more routes - but with aircraft based outside of Denmark, and this means that the Danish Model is blown up anyway. It doesn't make any difference,« he says.

But the battle in Copenhagen is soaking up resources. Ryanair has become a scapegoat to many on the political left and some parties on the right as well. And despite the airline's humouristic attack on Copenhagen's Social Democrat mayor, Frank Jensen, on the social medium Twitter - as well as a complaint lodged with the EU Commission and continuing provocations against rival airline SAS - Ryanair has not yet managed to charm the Danes and sway public opinion. According to airline management, ticket sales have climbed during the controversy. But many Danes are still deeply sceptical of Ryanair; a climate which in the long term is not beneficial for the airline's expansion plans. This is a problem that even O'Leary will acknowledge.

Ryanair

»There seems to be a negative perception on Ryanair up in Denmark which I think we need to go and address - certainy now that the election is over. There wasn’t much point going up there while the election was going on.«

So what are you going to do?

»Invite to a press conference and explain our position. And maybe run some adverts and explain that we are creating some jobs in Denmark. We have a collective agreement with our staff - justnnot the unions. We have high pay.«

But all that you have already said?

»Yes, but nobody has paid any attention,« says a visibly annoyed Michael O'Leary.

While O'Leary has the impression of falling on deaf ears, Ryanair has come to be seen by the Danish public, and especially on social media, as a symbol of raw capitalism, greed, frayed ethics and the foremost example of Europe's major current political buzzword: »social dumping«. It was predictable that several Danish politicians - among them the mayors of the country's four largest cities - would distance themselves sharply from Ryanair and bring in a de facto boycot of Ryanair. Now the Danish election campaign is over. Perhaps to Michael O'Leary's luck, it ended with a victory for the right wing. Which means that no legislative move against the company is to be expected in Denmark. But the question remains whether it is still possible to get the many sceptical Danes to accept Ryanair. O'Leary still believes it is.

Luckily for Ryanair, Michael O'Leary is a master of setting the agenda. He talks like a waterfall and almost always in capital letters and exclamations, his turn of phrase often easily understood and almost infantile. Wars of words are a speciality of his. He uses sharp sarcasm and irony. Behind the glasses resting on the tip of his nose and the grey-sprinkled hair is an influential billionaire businessman in jeans and blue-striped Gant shirt, with a charm and raw charisma that fascinates many and repulses in equal measure.

He spreads out his arms.

»I am the proud boss of this Siberian salt mine where we keep our employees like slaves in a chain,« he says with a cheeky smile in thinly veiled reference to the picture that many of his union opponents would like to paint of workers' conditions at Ryanair.

With his thick irony he wants to show that Ryanair as a company is not half as bad as it has been made out to be. Both he and a number of other Ryanair executives - whom Berlingske meets across a six-hour session in Dublin - repeatedly state that air captains working for the company make »up to« 160,000 euros per year, while co-pilots make »up to« 75,000 euros and cabin crew members »up to« 35,000 euros.

What Ryanair's top management talk far less about is the fact that a very large number of the company's pilots and cabin crew actually are not employed by the company. They work as a kind of contract-based freelancers and are leased to Ryanair by crewing companies and temp agencies, to suit the airline's shifting requirements. Berlingske has obtained some of these otherwise confidential contracts, and they clearly show that contract workers receive no sick pay - and that pilots are required to pay just to be interviewed by management for assessment.

Absences due to sickness are low at Ryanair. A dark-haired woman of about 30, who is charged with securing crew members for all daily flights, states that just 15 or 20 pilots and cabin crew members called in sick on the day of Berlingske's visit. And »that is normally the level«, she says. With more than a thousand people working on Ryanair-aircrafts every day, that is an enviably low sickness absence.

The large number of contract workers is one of Ryanair's biggest competivite advantages, giving the airline considerable flexibility. Which is why Ryanair is fighting so hard to preserve its model despite growing criticism from unions and lately also from politicians who now openly talk of a »necessary tightening« of European-wide legislation.

O'Leary and Ryanair are determined to ride out the storm. Unlike its biggest rivals in Europa, the airline raises aggressive expectations for the future. Ryanair is already the biggest airline in Europe by both market value and passenger numbers, and it has even placed the world's largest aircraft order, for 380 new Boeing planes to be delivered over the next five to ten years.

Eddie

And so Ryanair will become an even bigger employer than it is today. Around 10.000 in total work for Ryanair. Some 500 people report on a daily basis to the company's head office in Dublin, and they will have more colleagues in the years to come. There is room for expansion, as Ryanair has secured the land around the building. The head office features light design and airy spaces with fairly high ceilings up to that white plasterboard. There are some open areas with spaces for group work - as well as a helter skelter to take playful employees from the first floor to the ground-floor reception. »Welcome to the madhouse« is written on the wall behind the reception across a photo collage featuring green cushions and the Batman figure of the Joker with a wild stare.

Europe's biggest airline is unlike any other. So is its Chief Executive Michael O'Leary. During our interview he manages to get agitated and calm down several times. He does not have the appearance of a man who has been doing the same job for 21 years and is now heading towards his pension. On the contrary, he seems sharp, fired-up and eager to lead his troops into new battles. After an hour and fifteen minutes, the CEO has no more time to talk about the challenges in Denmark. He shakes hands and poses for the photographer - something he hates doing - then slaps this reporter on his back.

»Cheer up! Smile more. You're in happyland.«

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