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Mary and the Little Tramp

Posted on: February 21st, 2010

MICHAEL O’LEARY is offering Mary Coughlan a simple deal. Give me Hangar 6 and I’ll give you 300 jobs.

More chillingly put: no hangar no jobs.

That is the way he does business. Three arms of the State have joined forces to block him.

While Michael is parading himself on the airwaves, they have despatched their armies of spin doctors to undermine him. None has the neck to confront him head on, so they are whispering behind his back. They are muttering that O’Leary is a showman. Which he is. That he is exploiting the airwaves to promote his cause. Which he is. That he is making mischief. Nobody does it better. And more wickedly, that he is not genuine about his jobs offer. Which he is.

All week O’Leary has been running rings around Minister Mary Coughlan, the Dublin Airport Authority and Aer Lingus. Once again they are trotting flat-footed behind the nimble magician.

O’Leary’s obvious enjoyment at pricking the bloated egos of his three adversaries provides compelling entertainment. Watching Michael on the box beats EastEnders any day. Yet the spectacle can become a distraction: sometimes we lose sight of Ireland’s toxic business warts while we laugh at his gags.

His cheeky arrival at the beautifully coiffed Tanaiste Coughlan’s office, dressed in shabby sneakers and jeans that looked like he had slept in them for a week, was hilarious if a bit contrived. Our minds ran riot imagining the reaction of her army of sniffy civil servants holding their noses when the triumphant tramp, paper cup in hand, entered the building

Theatricals aside, O’Leary has again helpfully highlighted the blockades embedded in Ireland’s aviation sector.

The Ryanair chief comes bearing gifts. Michael will deliver his 300 jobs to the most profitable location. He runs a global business, not a semi-state protectorate.

Such commercial principles make common sense in all circles except the DAA state monopoly, the Department for Enterprise and Employment, and the heavily unionised Aer Lingus. His emphasis on jobs means that O’Leary has prompted an awkward question: how is it that Ryanair, a non-unionised, publicly-quoted company, is offering more jobs than the union-dominated, fully state-owned DAA and the 25 per cent state-owned trade union haven of Aer Lingus? Both his opponents are shedding them.

Do trade unions and state ownership ultimately lead to unemployment? Recent evidence suggests that they do. Last year the DAA sought 400 redundancies from its 3,600 workforce. Four months ago Aer Lingus announced a cut of nearly 700 jobs. Both outfits are expected to report losses for 2009. O’Leary will report profits. Mary Coughlan has lined up behind the losers. As always, the comrades with the beards can depend on the minister to thwart the Ryanair entrepreneur.

The instinctive hostility of all recent governments to O’Leary has done the State no service. Bertie Ahern’s obsession with short-term protection for the two semi-states has left a legacy of losses and falling employment.

His hostility to aviation entrepreneurs was well-flagged by his obstruction of Willie Walsh in Aer Lingus and of O’Leary in Ryanair. Obsessed by the needs of his North Dublin constituency, Bertie defended union power and overmanning at the semi-states. As a result, Walsh was tragically lost to BA. Thankfully, O’Leary stayed to pay his taxes in Ireland.

Fianna Fail’s knee-jerk reaction in defence of state monopolies has landed them in bags of bother. Last year Coughlan moved swiftly to protect FAS when news broke of the latest bout of overspending. Instead of sacking the FAS board, she sought to shield them.

She had been handed a gold-plated chance to detach herself from the profligate wasters at FAS. Instead she leapt to the moribund state agency’s defence.

Similarly, today she is rallying to the DAA flag.

O’Leary had handed her a chance to kick the semi-state airport authority in the teeth. She owns it. She bottled it, instead suggesting that Michael should talk to the bureaucrats in the DAA. Mary knows full well that this is red rag to a bull.

Coughlan’s mandate is to deliver jobs, not to observe business protocols.

She entertained all sorts of red herrings to frustrate O’Leary’s plans.

Her initial plea that Aer Lingus has a legal right to occupy Hangar 6 is feeble.

Information provided by Ryanair shows that the DAA’s standard contract gives it the right to boot out any of its tenants in the hangars with 12 months notice. Last week, instead of instructing the DAA to end its contract with Aer Lingus and find them another premises, Coughlan rang Aer Lingus boss Christoph Mueller and asked him to vacate the hangar. The German, barely a wet day in the job, seemed unaware of the cosy relationships in Ireland. He seemingly told her to go jump in a lake.

Mary Coughlan holds a key 25 per cent stake in Aer Lingus. When it was privatised in 2006, we were constantly assured that the State needed to hold a meaningful share to protect the national interest. The Government needed clout.

‘Imagine the reaction of Coughlan’s army of sniffy civil servants holding their noses when the triumphant tramp, paper cup in hand, entered the building…’

If ever there was a need for clout it was last week. Mary simply needed Mueller to switch hangars and 300 jobs would follow. Mueller gave her a flea in the ear.

So much for the 25 per cent stake. It carries no influence in the national interest. And it will soon be worthless in money terms. Even at this late stage Coughlan could combine her 25 per cent share with O’Leary’s 29 per cent to force the airline to pull out of Hangar 6. Not a chance.

The minister and her allies are more interested in humbling their nemesis.

Coughlan herself has been humbled by Aer Lingus. She is seen as a pawn in the DAA/Aer Lingus cabal that holds sway at Dublin Airport. As owner of one and part owner of the other, she would be better off selling both.

Ryanair sources are adamant that the DAA will never evict Aer Lingus because the airport authority is terrified that its old airline ally might not fulfil a promise to become the anchor tenant for the DAA’s latest white elephant — Terminal 2.

Passenger numbers are tumbling at the airport. The two basket cases are natural bedfellows on the “my enemy’s enemy is my friend” category. The triangle is completed by the State.

All share an anti-business ethos and an antagonism to Michael. The hostility to Michael was highlighted on Monday’s Morning Ireland when poor Mary Coughlan told Aine Lawlor that she would “certainly not” be picking up the telephone to ring Michael. The very thought of ringing the devil incarnate horrified her.

The current row has become deeply personal. The trio desperately want to put manners on Michael. They deeply resent the heroic status he has achieved in modern business folklore. Such personal spleen clouds political judgment. The super-capitalist has become a popular figure because his business model has delivered jobs and cheap travel by challenging State monopolies.

This week’s spat was part of the same strategy.

His success has maddened the DAA, sulking in its slum at Dublin Airport. The monopolists are reduced to briefing journalists that O’Leary has a hidden agenda: he only wants Hangar 6 as a cover to build a terminal for Ryanair.

The Ryanair chief has parried such nonsense by offering to sign a deal legally preventing him from using it for such purposes. The DAA is paranoid about O’Leary.

Just because they are paranoid about him they should never assume that he is not out to get them. He is.

Let us wish him well in his pursuit of the monopoly and the delivery of 300 jobs for Ireland.