Ryanair's 'phones in the skies' service put on hold
Published 30/03/2010 | 05:00
RYANAIR has suspended the on-board system that allows passengers to make mobile phone calls after the company that provided the service cancelled the contract.
The system was launched with great fanfare last year, but the budget carrier has been unable to agree an expansion plan with OnAir, the provider.
The termination of the contract puzzled analysts, who thought that few companies would walk away from the prize of business with Europe's largest airline.
Ryanair has fitted 50 of its aircraft with the OnAir system, which allows passengers to make voice calls and send and receive both text messages and emails from their phones.
The carrier said it was happy with the service and that usage had risen steadily. It gets a share of revenues from calls and Michael O'Leary, the chief executive, has said he believes that it will be an important source of revenue in the future.
The airline had wanted to expand the system to its fleet of 230 aircraft but was unable to agree the terms for doing so. This led to speculation that OnAir might be unable to meet the financial costs of the installation or that returns had been less than anticipated.
Doug McVitie, managing director of Arran Aerospace, a consultancy, said: "Ryanair is flying more than 66 million passengers a year and no company is going to want to turn its back on that sort of customer base.
"Given the relatively short duration of Ryanair flights, perhaps OnAir is struggling to make enough money to justify the investment required to expand the system."
Benoit Debains, chief executive of OnAir, would only say: "It is disappointing that OnAir and Ryanair couldn't reach agreement on the detail of a roll-out to their entire fleet, but our experience was extremely positive.
"OnAir will be announcing very shortly new agreements with other carriers for both short-range and long-range aircraft, as well as strategic partnerships with major mobile-phone operators to enter new markets."
Ryanair said it would look for a new system, but it may be many months before its passengers can use their mobile phones again.
Only a handful of airlines have adopted on-board connectivity. However, it is a growing market and aviation analysts expect it to become a standard feature. OnAir has five other customers, including British Airways, Air Asia and bmi.
A Ryanair spokesman said: "The company regrets that OnAir was unwilling to commit to roll out its in-flight phone service to all Ryanair's 230-plus aircraft fleet. As a result, OnAir has decided to terminate its contract after a successful 13-month proving period."