By DANIEL MICHAELS

The recession has been good to Ryanair Holdings Ltd.

The Irish no-frills carrier’s low fares helped it carry more international passengers than any other airline in the world last year. It’s on course to keep growing and post strong profits again this year, as more traditional rivals struggle with weak traffic and discounted airfares, despite early signs of a pickup.

In a Boss Talk interview with The Wall Street Journal, Ryanair’s Michael O’Leary discusses growth in a recession, transparency with passengers, and the fast-changing airline industry.

Barely a decade ago, Ryanair’s brash chief executive, Michael O’Leary, brought Southwest Airlines Co.’s model of simplicity and frugality to Europe. He put the business plan on steroids by squeezing costs and slashing ticket prices. The Nasdaq-listed Ryanair has been one of the world’s most consistently profitable airlines this decade.

In 2001, Ryanair became Europe’s first start-up to eclipse a state-owned national rival when it overtook Ireland’s Aer Lingus. It has since tried twice to buy the troubled carrier and now holds 29% of it.

Mr. O’Leary, who personifies the old Hollywood line that there is no such thing as bad publicity, grabs headlines by insulting regulators, competitors and suppliers. Unlike airline executives who try to evoke the industry’s bygone glamor, Mr. O’Leary compares flying to riding a bus.

After attending a recent conference at the European Union in Brussels, where he dismissed European Union transportation infrastructure plans as “nothing but rubbish,” Mr. O’Leary spoke with The Wall Street Journal about what he calls “mad” ideas he’s considering, like pay toilets on board and standing room tickets.

Excerpts:

WSJ: How has the recession affected Ryanair, and how have you used it to your advantage?

Mr. O’Leary: We love recessions. We’ve lowered fares, lowered costs and grown the business by another 15%, and pushed a few more competitors out of the way.

WSJ: Your costs are already low. Do you reach a point where it’s hard to keep cutting?

Mr. O’Leary: You do reach a point, but we’re probably 20 years from that. What you have to do is be more revolutionary.

This year, thanks to a weaker dollar, we’ll have lower aircraft costs and lower maintenance costs. We’re lowering airport costs and we’re lowering staff costs with pay freezes.

We now have to be more inventive in the way we lower costs, which is why we’re looking at things that seem revolutionary to other people.

Like, paying for checked-in bags: It wasn’t about getting revenue. It was about persuading people to change their travel behavior—to travel with carry-on luggage only. But that’s enabled us to move to 100% Web check-in. So we now don’t need check-in desks. We don’t need check-in staff. Passengers love it because they’ll never again get stuck in a Ryanair check-in queue. That helps us significantly lower airport and handling costs.

Now we’re looking at charging for toilets on board—not because we want revenue from toilet fees. We’d happily give the money away to some incontinent charity. What it means is, if by charging for toilets on board, more people would use the toilets in the terminals before or after flights, I could take out maybe two of the three toilets on board, add six extra seats and reduce fares across the aircraft by another three or four percent.

So, there’s always new ways of lowering costs, but you have to come at it with some imagination and some passion.

WSJ: Is it hard to spur that imagination, especially when you’ve got a pay freeze?

Mr. O’Leary: We have a very bright young staff. I think they put their pay freeze in context. In Ireland, there’s deflation of about minus 5%, so they’re well ahead, even with a pay freeze. What we try to avoid is pay cuts or job cuts. I think they appreciate that.

But I think the challenge is always within the company to try to come up with ideas. That’s why we try to encourage ideas being generated internally. We do that by having an open, enthusiastic culture that encourages people to come up with wacky ideas—the madder the better.

Another one we’re looking at is taking out the last 10 rows of seats and putting in handrails. In that case, you’d be able to offer on each flight, say, 125 seats. But you’d also have standing room for maybe another 100 passengers. And the proposition would be that if you want a seat, you pay €30 ($44). But if you’re willing to stand, you pay €1.

WSJ: What hasn’t worked well for you in the past year?

Mr. O’Leary: Our campaign to break up the Dublin airport monopoly clearly hasn’t yet worked.

Our offer to acquire Aer Lingus and grow it quickly hasn’t worked, which is why Aer Lingus are now reporting record losses and have announced another 800 job cuts.

The fact the Irish government [which owns 24% of Aer Lingus] has turned us down twice just shows how stupid the Irish government is. We could have been nicer to the Irish government. But I think since they’re so heavily in bed with the trade union movement in Aer Lingus, our offers were doomed to failure from the start. So I think it’s highly unlikely we’ll make a third offer.

WSJ: Some of your savings—such as charging for food and checked bags—once seemed shocking, but are now standard. How hard has it been to get people to change their expectations about what they are paying for?

Mr. O’Leary: I think it’s remarkably easy if you’re open and fair with the passengers. We’re open about our policies: You’re not getting free food. We don’t want your check-in bags. We’re not going to put you up in hotels because your grammy died.

But they understand the trade-off is we are going to guarantee you the lowest airfares in Europe, by a distance. And we are going to guarantee you the fewest delays, fewest cancellations and fewest lost bags.

And that’s what people really want—affordable, safe air transport from A to B. It’s a commodity. It’s not some life-changing sexual experience, which is what the other high-fare airlines have tried to convince you that it is.

WSJ: You’ve been very public about your frustration with the pace of yearlong negotiations with Boeing Co. for a big order. Where does it stand?

Mr. O’Leary: We have effectively reached agreement on pricing for 200 aircraft. But the discussions have now broken down because Boeing wants to go back and change the delivery conditions. It’s things like warranties and performance guarantees. But we’re not accepting inferior delivery conditions than on our current orders.

Our final board meeting of the year is next Thursday in Dublin. I don’t see any way of putting the deal back together again in the next week. The deal is now highly unlikely to happen.

WSJ: What’s your fallback plan?

Mr. O’Leary: We just don’t order any more planes from 2013. We still have almost 100 aircraft coming through 2012. Then we either go back to Airbus or go back to Boeing in the next downturn. Or we stop growing from 2013 and we start returning cash to shareholders. [A Boeing spokesman declined to comment on the negotiations.]

Building Your Own Personal Success Escalator

What is your next step – now that you’ve built your own Personal Success Escalator?
Success attracts more success.
What continuing success do you want to attract now?Think and Grow Rich Action Step #17
Use of Cosmic Habit Force

It takes a habit to replace a habit.

22 Laws # 17 – Unless you write your competitor’s plans, you can’t predict the future.

18. Success often leads to arrogance, and arrogance to failure.
19. Failure is to be expected and accepted.
20. The situation is often the opposite of the way it appears in the press.
21. Successful programs are not built on fads, they’re built on trends.
22. Without adequate funding, an idea won’t get off the ground.

Well here we are, at the very end of this book and hopefully you are rich by now by following the steps listed – and if so, relax.

My high school math teacher, Alfred Kalfus left me a phrase “Life is a study of patterns” and in Internet marketing there is one pattern after another. One of these patters is to tell and describe how horrible life was before success, how poor you were, how you suffered and what a terrible time life was before the secret discovery that turned it around.

I am going to follow that pattern – but I am not going to dwell on it – because you probably have experienced greater pain than I have. You probably have been poorer or had to go through tougher times.

The working title of this book was “How I Transported Myself from the Bottom of the Basement to the Top of the Grand Canyon in 30 Days.”

Now, you may be in your own basement, you may be unemployed, you may be a “victim” of the recession of 2009-2010, your life may be in the pits. Please do not be offended by the next comment – none of that matters.

Dwelling on the bad stuff that might seem to overwhelm you is not going to help. You might not agree with that. Okay – let’s run a test. How about you spend the next 5 minutes wallowing – just list all of the bad things that have ever happened – but don’t write them down – just set a stop watch and let 5 minutes go by.

Okay – did you do that? Did you feel better? Probably not, but you may be used to the bad stuff. Earl Nightingale said this about the difficulty of making a better life – “It is easier to put up with the hardships of living a poor life, than it is to put up with the hardships of making a better life.”

Now do this – what is your basement – what is the pits – what is it that you are going through – what is the lack of money or health or a relationship – you probably know that all too well and can spend a lot more time than 5 minutes describing it.

Okay, now take another 5 minutes and just list – in writing what you want – what your fantasy is – you must write this down and you must spend at least 5 minutes. Start now – what would you like?

Now, please be specific – and again, do not worry that this is a fantasy, that this is a waste of time or “unrealistic” or “it will never happen” or “I am different” or “You do not understand” – because I am about to tell you the secret.

And the secret is this – you have fooled yourself into being a loser – now all you have to do is fool yourself into being a winner. Got that? And the way to fool yourself is to imagine you are already there. See, it has worked so far in your life – but you fooled yourself into the bad stuff – now just start imagining what your better life will be like.

Some of you will not do this. I understand. I did not believe it at first either. You might as well put this book down and ask for the money back guarantee – then move onto to something else. I can’t help you. No hard feelings.

For the rest of you, here is the best news you probably have heard all of your life – no matter how bad things are – they not only can get better – they will get better – and this is a secret that goes back 4,000 or 6,000 years – and it has always been a secret because it is hidden from most people.

See, for me, I was living in the bottom of the basement – because I put myself there. That was a “step up” from the broke life I was living in Tallahassee – and a way to regroup and rearrange my life. But it was still a basement.

So that was “X marks the starting spot”. The next step is where do I want to go – that image has been meeting my beloved Ināra, reuniting with her after over 1 ½ years “apart” – since we are never really apart, being soul mates and “twins” at the Atlanta airport. A short drive of 35 miles – but it may as well be 100 light years away – when I was broke and didn’t have $20 in my world or a car that was drivable.

But – that image grew more and more focused – and is real in my mind – by the time you read this book – it will have already happened. And the next step is where do we go from there? The Grand Canyon of course! Every Latvian has always wanted to visit the Grand Canyon. Why? Beats me. I already saw the place and yes it is cool. But for Ināra it is a dream come true.

So my image is to be sitting n the first class roomette with the big picture window watching America go by outside – watching the train station in Atlanta – where the Gone with the Wind scene happened, and then traveling along the south of the US to New Orleans. Katrina was the latest invader – the British were the first in 1812. Ināra and I got there before her 51st birthday and my name day on June 24th.

And then we went to Bourbon Street and maybe that cemetery in Easy Rider – the LSD scene – and then we get back on the train to go to Tucson. We watch America’s West go by – and travel in a few hours over the same distance that spans the entire country of Latvia. America is a big place – the entire countries of XC would fit inside the Grand Canyon – with room for YY. But that isn’t important right now.

What is important is that we have the money, the freedom the time to do this – and we have each other – we are about to get on the bus – remember the Bus Ride Out of Hell? We are on the bus from Tucson to the Grand Canyon.

And by helping you market and advertise your business – by helping you attract the customers and sell the products and services and earn you the money – well, we got paid as well.

So a miracle just took place, a Buying Trance was cast upon you and upon me. I literally went from the bottom of the basement to the top of the Grand Canyon. And so can you. Just let me know jan@janthemarketingman.com what your Grand Canyon vision is and how you got there.

All aboard the success train! There are plenty of seats available but you need to make a reservation.

Can you think of anything else? Any other way to get your message out to a word that “desperately” seeks what you have to offer. And remember –

“When your marketing is done well
Your products virtually sell themselves”