by Lachlan Markay –
Innovation and market disruption can be powerful forces for economic growth. But government involvement in the market tends to be a force against disruption, and hence a force against innovation. The drive to protect the dominant companies – often justified in the name of job preservation — prevents success for companies that offer better, cheaper, or different products or services.
The European Union received a frank lesson in these economic truths when it brought Ryanair CEO Michael O’Leary to speak at its recent innovation convention. In a rousing and thoroughly entertaining speech and subsequent Q&A, O’Leary roasted the European Commission’s attempts to protect Europe’s major airlines, often at the expense of innovation in the industry.
“This is the first time I think that I or Ryanair have ever been invited to a conference by the European Union,” O’Leary jibed, “because as most of you know, the European Union spends most of its time either suing me, torturing me, criticizing me, or condemning me for lowering the cost of air travel all over Europe.”
Ryanair is renowned in Europe for its low-cost flights, and its unconventional pricing structures. The airline was the first on the continent to charge for checked baggage. It has even begun charging passengers for the use of in-flight restrooms.
But O’Leary insists that the company satisfies customer demand by providing the cheapest flights around. An average 1.5 hour flight across Europe costs a Ryanair passenger 50 euros, or about $65. Large competitors such as Air France and British Airways charge six to seven times that amount, O’Leary noted.
“Lower prices beats higher prices every time,” adding yet another jibe at the commission’s taxpayer-funded junkets on Europe’s more expensive airlines.
O’Leary also touched on a hot-button political issue in the emissions taxation scheme that would tax airlines, both European-owned and from other nations, for their carbon emissions, calling it “a complete load of bloody nonsense.” He noted that Europe’s exclusive participation in the scheme would preclude any real effect on the environment, while still imposing costs on European airlines and consumers. “At a time of deep recession,” O’Leary said, “only the European Commission could invent something as stupid as this.”
Check out the videos of the presentation and the Q&A below:
Michael O’Leary at the Innovation Convention 2011 – Brussels
Master Class with Michael O’Leary – Innovation Convention 2011 – Brussels
HT: The Heritage Foundation (article originally published on Dec. 25, 2011)