Business Irish

Thursday 17 October 2019

O'Leary may yet pull a rabbit from the hat and make cheap flights to America a reality

Ryanair CEO Michael O’Leary. Photo: Mark Condren
Ryanair CEO Michael O’Leary. Photo: Mark Condren
John Mulligan

John Mulligan

Ryanair insists it can make cheap transatlantic travel a reality, but students of aviation history will quickly point to numerous examples of other low- cost airlines which spectacularly failed to link Europe with North America.

But even now, brash start-up airlines have been muscling in on the lucrative transatlantic market.

Iceland's WOW will this summer launch flights from Dublin to the US, promising one-way tickets for as little as €149 including taxes. But flyers will also have to pay for their bags, and have a two-hour stop over in Iceland's capital, Reykjavik.

Scandinavian airline Norwegian bills itself as the first transatlantic low-cost carrier, using brand new Boeing Dreamliner aircraft. The expansion has pushed the airline group into the red.

But Ryanair boss Michael O'Leary insists he can make it work.

Establishing a standalone company - which could even have a separate name - would be a key element of the plan. It would almost certainly have its own, separate management team, enabling existing executives to stay focused on expanding the Ryanair service in Europe.

A separate company also insulates Ryanair, to some extent at least, from any negative financial performance of a long-haul operation. That long-haul operation would most likely be loss-making for a year or more.

Mr O'Leary has insisted that he'd be disappointed if he couldn't offer one-way tickets for an average price of less than €100. No more than with Ryanair at the moment, some passengers get cheap tickets by booking early, others pay more because they book late or choose to travel at peak times, for instance.

Also, the type of aircraft a long-haul service will use will be a crucial factor. New, single aisle, fuel efficient aircraft might be able to help it achieve the kind of economics required to offer low fares.

O'Leary may yet pull a rabbit from the hat.

Irish Independent

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