12 / Low Cost & Regional Airline Business www.lowcostandregional.com / July 2015

and it certainly didnt seem very funny. To the contrary, the Board, not the man, announced the project in a drab press release picked up mainly by the broadsheets. It described transatlantic flights as a logical development of Ryanairs network, adding that negotiations with aircraft manufacturers are confidential.

Whats more, Ryanair is two years into a public relations makeover to soften its abrasive image. OLeary has promised to stop unnecessarily pissing off his customers (presumably reserving the right to do so when justified), and the airline has rolled back many of its most objectionable policies.

M ichael OLeary, Chief Executive of Ryanair, Europes largest low-cost carrier, has always been economical with the truth when it comes to headline-grabbing antics.

Though by no means shy about dishing out facts and figures on the airlines phenomenal success, OLearys best performances have tended to encroach on the realm of fiction. His purported product innovations are the stuff of legend: a fat-tax for plump passengers; a standing-only section for the money-strapped; even a toilet charge for those caught short. Something as inconvenient as the truth, he discovered long ago, will rarely stop journalists from writing up a good story.

So when Ryanair announced the launch of a much-mooted transatlantic subsidiary in mid-March, only to backpedal on the venture three days later, shouts of publicity stunt immediately echoed around aviation circles. For OLeary, whose tarnished persona lies somewhere between that of a pantomime villain and the boy who cried wolf, such accusations are hard to brush off.

But all may not be as it seems. While Ryanairs 72-hour foray into low-cost, longhaul flying undoubtedly earned column inches, it did not fit the mould of prior shenanigans.

For one thing, the transatlantic proclamation was neither an irritant nor a rib-tickler. It didnt annoy anyone (legacy carriers notwithstanding),

Ryanair recently backpedalled on plans to introduce transatlantic low-fare operations to North America, but following on the heels of WOW and Norwegian, do the numbers really add up for future mass transatlantic low-cost travel? Martin Rivers finds out

Transatlantic trip up

News analysis

Norwegian Boeing 787s offer the closest thing to low-cost transatlantic flights (photo: David Charles Peacock)

14 / Low Cost & Regional Airline Business www.lowcostandregional.com / July 2015

Feature title hereNews analysis

We do have a business plan it wont be Ryanair, but a sister company that becomes a longhaul, transatlantic, low-fare airline Michael O' Leary, Ryanair

The companys website no longer forces people to jump through hoops to avoid unwanted add-ons its ancillary charges have been brought down to less punitive levels. Furthermore, a social media team now stands guard over Facebook and Twitter formerly dumping grounds for gripes about the airline to inform and assist passengers. For a company that used to charge its customers to complain, that is nothing short of a revolution.

But if Ryanair is now treating everyone with respect, and OLeary is no longer clowning around for publicity, why the transatlantic kerfuffle? Perhaps the man himself should explain.

Ive got to be very careful here, as we have had a bit of a PR boo-boo this week, the red- faced chief executive told The Economists Future of Travel conference in Madrid, shortly after the Board retracted its own announcement. We do have a business plan it wont be Ryanair, but a sister company that becomes a longhaul, transatlantic, low-fare airline.

We have a strategy that would operate from 10 or 15 of the big European cities to 10 or 12 of the big US cities. However, we have consistently said that: (a) it will be a separate company; and (b) it cant happen until we can find a fleet of low-cost, longhaul aircraft. One of the big

at the bottom of a downturn when the OEM was desperate for buyers. OLeary believes a comparable opportunity for snapping up widebodies could present itself in four or five years.

Unless, and until, that happens, the airline will not publicly commit to a transatlantic launch. Someone in Ryanairs press department evidently missed that memo.

In the meantime, two rival carriers Norwegian Air Shuttle, a point-to-point 787 operator, and WOW Air, a hub-and-spoke Airbus A321 operator based in Iceland offer the closest thing to low-cost transatlantic flights. Both undercut full-service prices by selling one-way tickets for as little as 200. That compares with an average fare of 415 among members of the Association of European Airlines, according to CAPA.

With OLeary looking to keep prices under 100, Ryanairs transatlantic venture remains a long way off commercial viability. But, if nothing else, its PR blunder shows how convinced the airline is that, at some point, the sums will add up.

difficulties we have is that, for the last five or six years, the longhaul aircraft market has been incredibly hot, partly because the Gulf carriers will order almost all of the spare capacity.

So there you have it. In essence, nothing has changed. OLeary made it known several years ago that he will enter the transatlantic market as soon as the economics make sense. Though talk of 10 one-way fares is bluster, the business model itself inches ever-closer to reality.

Next-generation widebodies such as the Boeing 787 and Airbus A350 are chipping away at fuel costs, in turn lessening the dependence of longhaul operators on high-yielding premium travellers. The missing ingredient for Ryanair is an over-supply of aircraft to push down valuations. Cyclical downturns have historically created such a glut every five years, OLeary said, but with the Gulf super-connectors buying jets faster than Boeing and Airbus can build them, price-tags have remained stubbornly high.

Ryanairs success in Europe over the past decade has largely been down to the timing of its 2002 deal for 100 Boeing 737s signed

The missing ingredient for Ryanair is an over-supply of aircraft to push down valuations (photo: Boeing)

In an ideal world O' Leary would look to offer transatlantic flights for as little as 100 (photo: Ryanair)