EU Innovation Conference 2011

On 01/04/2012, in Economics, Entrepreneurship, by Jordan Wilson
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Michael O’Leary gave an interesting talk at the 2011 European Union (EU) Innovation Conference in Brussels, Belgium.

Michael O’Leary is Chief Executive Officer of Ryanair, a discount airline based in Ireland.

Neither O’Leary nor Ryanair are overly popular with Eurocrats. The talk given by Mr. O’Leary explains why neither are appreciated with the elite of Europe. As well as why Mr. O’Leary is no fan of Brussels.

Some of the key points made include: 

1. His Ronald Reagan quote that “the economic policy of government and bureaucrats is always: if it moves tax it; if it keeps moving, regulate it; and if it stops moving, subsidize it.”

Very true.

2. Ryanair is far and away Europe’s most popular carrier. The reason for Ryanair’s popularity is due to providing customers with “3 things they really want: a cheap flight, an on-time flight; and a promise not to lose their bags in between.”

And those 3 things have led to 27 years of continuous growth for the company.

3. When coming out to the conference, the organizers offered to pay for Mr. O’Leary’s flight, provide a limo to/from the airport, and hotel. He sends them his itinerary. Then gets an email back saying sorry, the organizers cannot reimburse for travel on a discount carrier, only a full fare airline. The same email said that the organizers could not send a taxi to the airport, as he was landing at a small (i.e. low cost) airport and not the main Brussels one. So the EU organizers would happily pay for airfare on a more expensive full fare carrier and send a taxi to the main airport, but would not pay for a cheaper trip option.

That story pretty much sums up the EU and why they are in their dire financial state.

4. A key to Ryanair’s success is having staff with no prior experience with airlines. So there were no ingrained bad habits that staff brought to the business. While experience is usually good, often taking a new look at a business generates innovation and freshness.

In certain business contexts, this is considered taking a “green fields approach”.

5. Mr. O’Leary gives some good examples on how to improve profitability by enhancing revenues and/or reducing costs. He also shows how you can use competitors to improve your own results.

All in all, a good way to spend 17 minutes of your life.

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