Sunday, January 20, 2013

Airline boss told to stop referring to Aviation Regulator as 'village idiot' in correspondence

Ryanair raps O'Leary for 'pathetic personal abuse' after branding aviation commissioner a 'village idiot'

RYANAIR chief executive Michael O'Leary has been rapped by his own chairman for likening the Aviation Commissioner, Cathal Guiomard, to a "village idiot", the Sunday Independent can reveal Newly obtained correspondence shows that Mr O'Leary unleashed a torrent of "pathetic personal abuse" at Mr Guiomard in letters between the two men last year. 

The emergence of Mr O'Leary's strong criticisms comes as the Public Accounts Committee (PAC) and the Comptroller and Auditor General (C&AG) are to further question the Aviation Regulator over details of Mr Guiomard's testimony at the committee last Thursday, which PAC chairman Mr John McGuinness called "unsatisfactory". 

In the abusive letters, Mr O'Leary lambasted the regulator for "rewarding the Dublin Airport Authority monopoly with significant increases in charges for its own commercial failure" and called on Mr Guiomard to "confirm when your term in office will end". 

In correspondence marked "strictly private and confidential", the combative Ryanair boss accused the regulator of "grossly excessive waste" on public relations ("despite not doing anything"), on consultancy costs and on rent. 

According to the letters, Mr Guiomard repeatedly rejected Mr O'Leary's charges of incompetence, stating that the cost of running his office had fallen significantly since 2006. 

In the most direct attack on Mr Guiomard, Mr O'Leary wrote: "As long as you continue to bestride Irish aviation as regulator, some village somewhere must be missing its idiot."

Last night it emerged that Mr Guiomard then wrote to Ryanair chairman David Bonderman to complain about the "awful" personal abuse directed at him. 

The intention was to make Mr Bonderman and the rest of the Ryanair board aware of their chief executive's comments. 

"Even by the shameful standards [of Ryanair], the most recent letter from your CEO falls well below Ryanair's customary behaviour. 

"Personal abuse, expressions of contempt and arguably defamatory statements should have no part in the management of your company. This abuse is not acceptable and should not be acceptable to you either," Mr Guiomard wrote. 

It has emerged that Mr O'Leary was rapped by his own chairman over his "village idiot" remark, as neither Mr Bonderman nor the board had approved of Mr O'Leary's comments. 

In response to Mr Guiomard, Mr Bonderman wrote: "Please be assured that neither I nor other board members would concur with the manner with which Michael communicates on occasion, including his reference to you in his letter. 

"Accordingly, I have asked Michael to refrain from any intemperate correspondence with your office."

Over the course of four letters, Mr O'Leary called on Mr Guiomard to explain "what you and your staff of 18 actually do on a daily basis, given that your own report clearly establishes that they have little, if any, ongoing work, licensing just 280 travel agents, eight airlines and investigated less than one customer complaint per day last year."

In response, Mr Guiomard said: "Your view that 280 travel industry licences could be reviewed by one part-time, part-qualified accountant is not one to be taken seriously. You misstate the level of work in the passenger rights area. In 2010, staff of the CAR responded to over 5,000 requests. This does not correspond to less than one a day."

Mr O'Leary also criticised the "grossly excessive" pay levels in Mr Guiomard's office, querying why the "18 staff cost an average of €100,000 each". 

Mr Guiomard responded by saying: "Your assertion that salaries average over €100,000 each is incorrect. Your letter recognised that to obtain a total of €1.8m, it would be necessary to add salaries and pension costs and travel and subsistence and conference and training and recruitment costs. The actual salary cost was €1.4m."

Mr O'Leary then criticised what he called the "waste" of €120,000 on consultancy and over €80,000 on advertising and public relations and why the regulator had incurred a cost of €283,000 for renting a prime city-centre office, when "your work could be undertaken in far cheaper offices in the airport area". 

The Ryanair boss also said: "Given the abject failure of aviation regulation under your tenure, we as one of Ireland's largest airlines and one of the principal victims of your inadequate regime, are entitled to know what our excessively regulatory fees are being wasted on."

Mr Guiomard said: "The budget of the CAR has fallen in my time as commissioner, and in 2010 was 25 percent lower than it was in 2006. Staffing levels were also lower. 

"Our average salary level reflects the fact that a high proportion of our staff are qualified to an advanced level in areas like economics, law, and accountancy. Consultancy expenditures were mainly related to IT. Many who visit the CAR might not find Dublin airport a suitable alternative location."

The revelation of the explosive war or words comes as the Sunday Independent has learned that details of Mr Guiomard's "unsatisfactory" comments to the PAC are to be reviewed by the committee and the C&AG. 

Mr McGuinness said: "We did not close the book on the Aviation Commission as his exchange with the committee was wholly unsatisfactory."

He added that Mr Guiomard's testimony was to be recalled to the committee in due course.

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