Irish group's template outlines theoretical low-cost carrier

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An Irish financial services organisation has produced a template that it says would result in a profitable, long-haul, low-cost carrier.

The plan, developed by Bloxham Stockbrokers, lays out what it believes will be the necessary conditions for a successful transatlantic carrier. It believes that the currently depressed state of the aviation market provides a window of opportunity in which to buy an initial fleet relatively cheaply.

Bloxham's plan is for a theoretical Irish airline it dubs 'AerFair'. It chose Ireland because of the availability of an aviation financing community, a supportive regulatory and legal infrastructure, and low corporation tax.

The plan would be to buy an initial four-aircraft fleet - typically Boeing 777s or Airbus A330s - and fly a series of transatlantic routes to uncongested secondary airports close to major conurbations, operating up to four routes in its first year.

It suggests London Stansted-San Franciso Oakland, Paris Beauvais-Milwaukee General Mitchell, Frankfurt Hahn-New York Stewart, and Dublin-Providence.

AerFair would be a point-to-point carrier and not carry cargo other than passengers' luggage. These factors would help eliminate weight, fuel costs and turnround time. It would also follow the low-cost carrier pattern of developing a strong ancillary revenue stream by selling catering, in-flight entertainment and amenity kits on board.

Passengers could expect a selling regime of items such as theatre and ground transport tickets, hotel accommodation and souvenirs, plus on-board gambling and mobile telephony.

These would be sold by a young cabin crew workforce "incentivised via pay-per-flight remuneration systems". Airline closures and cutbacks in recent years have provided a personnel pool that could readily be tapped, suggests the report.

With these income supplements, the report's authors believe AerFair could sell tickets on the Internet at fares around 30% less than current average ticket costs.

Aircraft would feature two cabins, a premium area with lie-flat seats and an economy zone offering market-leading low fares.

The report lists two criteria vital for the notional airline to succeed: a strong initial balance sheet to enable it to fight off aggressive retaliatory pricing by existing carriers, plus a strategic link to a high-volume low-cost carrier, such as Ryanair, EasyJet or Southwest Airlines.

"In exchange for equity, this [low-cost partner] will be asked for access to its website and soft management services to establish and develop the [new] carrier," it adds. This would put AerFair's name in front of a huge potential audience, and the link would distinguish it from recent failed long-haul carriers such as Silverjet, Zoom Airlines and Oasis.