O'Leary plans new all-frills airline for flights to US

Fergus Black

BUDGET airline Ryanair is ready to go from no frills to high bills with plans for a new luxury long-haul transatlantic service.

New airline RyanAtlantic will offer economy passengers flights to the United States for as little as ?10 in a new hybrid service being pushed by Ryanair boss Michael O'Leary.

But in a break with its existing policy of offering only standard no-frills seats, the new airline will also offer premium-rate fares as high as ?5,000 to compete with the business class services offered by established long-haul airlines.

Passengers who can afford to travel business class will enjoy other creature comforts such as showers, beds and limousines to bring them to and from the airport.

The Ryanair chief executive said yesterday that he intended investing in the new airline, which could be up and running within three or four years.

Mr O'Leary, who has already announced plans to step down from the helm of Ryanair in the same time span, revealed that he wants to help run the proposed new venture.

"My role would be as an investor and probably some kind of advisory assistant to the management," he told the Irish Independent. "It will give something to do after I leave Ryanair in around 2009 or 2010."

Confirming plans for the new long-haul venture, O'Leary said it would involve setting up a separate, stand-alone airline offering flights to as many as a half-dozen US destinations.

But he said that the venture was contingent on an open-skies agreement being implemented between the United States and Europe and a downturn in the aviation industry to enable the purchase of aircraft at a lower price.

The plan involves the purchase of a fleet of up to 50 Boeing or Airbus jets for around ?5bn and financed through a combination of lease-back and borrowings.

Up to 60pc of the seats on each flight would be filled by economy passengers as part of a "bums on seats" policy, with one-way fares from as little as ?10.

"The front of the cabin is where the real money is made and this will be a super-duper product way ahead of anything that Aer Lingus and British Airways has to offer," said Mr O'Leary.

For a business fare of up to ?5,000, first-class passengers would be able to enjoy showers, beds, and limousine transfers to and from the airport.

Intended US destinations would include airports in New York, Boston, Dallas, Denver, Los Angeles, San Francisco and Las Vegas.