Sky no limit for train-driver’s son
07 October 2007Tony Ryan was an ‘Olympic’ salesman, successfully circling the globe in search of new business, writes Siobhan Creaton.
Tony Ryan will be remembered as one of Ireland’s greatest entrepreneurs and as a leading figure in the aviation industry.
Ryan liked to say that his family had been in the transport business for a thousand years. His grandfather was a station master, his father a train driver and Ryan himself went on to found Ryanair.
While a thousand years may be exaggerating the longevity of the Ryan family’s association with transport, it is no exaggeration to say that Tony Ryan scaled the heights and plumbed the depths of the aviation business.
Born in Keane’s Point near Monard in Co Tipperary in 1936, he grew up in Thurles and began his career as a clerk with Aer Lingus in Shannon Airport.
Known as an ambitious and hardworking employee, Ryan quickly progressed, moving to New York for a spell as the station manager at New York’s JFK Airport, before accepting a more challenging brief that would whet his entrepreneurial appetite.
Aer Lingus was one of the first airlines in the world to lease out aircraft that lay idle during the quiet winter months to other airlines. It brought in welcome revenue for the state airline at the time and Ryan was charged with managing this operation. He struck a deal to lease one of the airline’s planes to Air Siam in Thailand and moved there with his wife Mairead and sons for the duration of the contract.
The Asian aviation market was burgeoning at the time and Ryan recognised there was a demand for aircraft that couldn’t be met simply from temporary overcapacity at other airlines.
He returned to Ireland determined to set up an international aircraft leasing company. In the 1970s,Aer Lingus had a small shareholding in the London-based Guinness Peat bank and the companies forged a new joint venture.
In a difficult negotiation, Ryan, who would head Guinness Peat Aviation (GPA), demanded a 10 per cent shareholding and re-mortgaged his home to pay for it. GPA went into the business of finding homes for surplus aircraft.
Ryan was described as an ‘Olympic’ salesman, circling the globe in search of new business for GPA. Many of his associates have remarked that one of Ryan’s greatest strengths was his ability to build a good team around him. He was known to be a hard taskmaster.
He held infamous Monday morning meetings that became known as ‘seagull meetings’, according to one executive, because Ryan ‘‘swoops in, shits on everyone from a height and swoops away again’’. Ryan had soon amassed an incredible fortune and enjoyed a lavish lifestyle.
Nicknamed ‘Jumbo’ and now permanently tanned, Ryan had a chauffeur-driven Daimler, a two-bed private jet, a valuable art collection and homes in Monaco, Mexico City, Ibiza and Hawaii.
He was renowned for throwing lavish parties at his Kilboy House farm in Co Tipperary. He had been known to bring bands from Mexico to entertain his guests and once told a reporter: ‘‘I am not a humble man."
Some of his wealth went into other ventures, including the relaunch of the Sunday Tribune newspaper and Matt the Thresher’s pub, close to his home. By 1991,GPA was the second-biggest aircraft leasing company in the world and was preparing to trade on the international stock markets.
Ryan had gathered a coterie of the great and the good to serve as directors, including the former British chancellor of the exchequer, Nigel Lawson; Sir John Harvey Jones; former European commissioner Peter Sutherland and retired Taoiseach, Garret FitzGerald.
According to one associate: ‘‘He loved the notion that a train-driver’s son from Tipperary could get a former chancellor of the exchequer to serve on the board of his company."
But the outbreak of the Gulf War following the invasion of Kuwait by Iraq undermined the aviation business and US executives stopped flying, sending the entire industry into a depression.
It was a bad time to bring a company like GPA to the market but, with the best advisers in the business, the firm forged ahead with plans to raise $1 billion from investors.
The consequences were disastrous. As investors shied away from buying the shares, GPA was forced to abort the flotation at the last minute. Within 12 months, GPA was on the verge of bankruptcy and Ryan lost control of the company he had founded when General Electric (GE) took over the debt-ridden company.
At the time, Ryan said that Jack Welch, the famous boss of GE, had ‘‘raped’’ GPA, to which Welch replied: ‘‘What do you expect when you’re walking around with no clothes on?’’ While Ryan and the GPA executives blamed everyone for the company’s demise, many commentators suggested that much of the blame lay with Ryan himself and the way he controlled the company.
Ryan took the blame, colleagues say, and lost his fortune. On June 18,1992, he was worth $300 million; only a few hours later he had debts of $37 million. When friends asked how he was coping with his spectacular loss, he would say, ‘‘I sleep like a baby – I wake up every ten minutes screaming!"
After losing control of GPA, Ryan’s only hope of recouping his fortune was Ryanair, the airline he had saved from bankruptcy for the previous six years - and its future was far from certain. He had set it up for his three sons, initially flying between Waterford and Gatwick Airport in London before muscling in on the Dublin - London route.
Ryanair managed to get airborne by bypassing the bilateral agreement that fixed the prices charged on the Dublin to London route by Aer Lingus and British Airways, by flying between the Irish capital and Luton Airport.
Ryan’s former employer, Aer Lingus, had waged a fierce battle against the fledgling airline and it would certainly have folded were it not for Ryan’s deep pockets and dogged determination. Michael O’Leary, a young accountant who was Ryan’s personal assistant, had been dispatched by Ryan to try to stem the family’s losses from Ryanair.
O’Leary assessed the carrier’s operations and quickly advised Ryan to close it down. It would never make money, he said. But Ryan wouldn’t hear of it and instead persuaded the government to give the airline exclusive rights to fly to the newly opened Stansted Airport for three years in the hope that this would finally allow it to make money.
He remained convinced that the airline could position itself as a low-cost carrier and capitalise on the liberalisation of European skies. Ryan had followed the fortunes of Southwest Airlines, that had grown to become a successful US airline.
O’Leary was persuaded to manage the airline’s transformation into a no-frills carrier and stood to make a fortune himself after cutting a lucrative arrangement with Ryan. Soon the search got under way to find a partner that would buy some of the Ryan family’s shareholding and give them some much-needed cash.
After a couple of false dawns, US lawyer David Bonderman and a consortium of investors came on board. They all reaped millions when Ryanair floated on the Irish stock market in 1997.Ryanair is now the biggest low-cost airline in Europe and one of the most profitable carriers in the world.
O’Leary has often paid tribute to Ryan’s role in the airline’s success. Ryan stayed as a director of the firm, but had sold out almost all of the family’s shareholding, and is estimated to have amassed a €1 billion fortune.
Siobhan Creaton is author of Ryanair: the story of Europe’s biggest low-cost carrier, published by Aurum Press