O’Leary’s about turn

What have Air Berlin’s Joachim Hunold, AirAsia’s Tony Fernandes, and now Ryanair’s Michael O’Leary all got in common apart from being low-fare airline pioneers?

Well, after my colleagues at Flight International interviewed Mr O’Leary in Dublin yesterday, they are all talking up their ambitions to enter long-haul markets.

The most surprising volte face is from O’Leary, who has rubbished the idea of low-fare players pursuing this market in the past. One element of commonality between O’Leary and Fernandes is that they appear determined to run their short-haul and long-haul operations entirely separately.
Tony Fernandes recently told Airline Business that analysts and investors were worried he would become distracted by his long-haul play. He stressed to them the distance between AirAsia and AirAsia X, his long-haul proposal, and how a new team will run it.

Air Berlin’s ideas are somewhat different, which reflects its positioning as a hybrid low-fare/charter carrier. Its heritage is in the long-haul leisure business and Hunold sees it as a strong and valid leg of the growing Air Berlin empire.

So what has changed in the past year or two about the long-haul low-fare concept? Many said the advantages short-haul low-cost carriers inherently have over network players – eg high aircraft utilisation – simply do not translate to long-range services.

The answer is that the fundamentals have not changed. What is new is the business opportunity.

These entreprenuers sense a market chance. Open Skies across the Atlantic has given O’Leary the taste for this market.

Fernandes wants to give it a go: he’s got enough put by for a failure not to hurt too much.

Hunold’s choice was either let LTU go to a German rival or buy the airline himself, and simultaneously enter the long-haul game with which he is very familiar anyway.

Will they succeed? Their track record suggests they’ve got a better than evens chance.

And O’Leary on the long-haul war path is a story no network carrier ever wanted to read.

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