Ryanair downplays appeal of Aer Lingus long-haul fleet

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Ryanair is unlikely to use Aer Lingus's fleet of seven widebody aircraft as a springboard into the low-cost, long-haul market should its third takeover bid for the Irish flag carrier succeed, says chief financial officer Howard Millar.

"Aer Lingus is a niche player," the CFO insisted at Ryanair's first quarter results briefing. "It flies mainly Irish Americans back and forward. I wouldn't see it as a vehicle for that."

Describing entry into the long-haul market as merely an "aspirational" goal for the low-cost carrier, Millar says that high fuel costs and aircraft valuations make any such development a distant prospect.

"Long-haul is just a little bit of the Holy Grail. I've looked at it quite a few times, and I really can't make it work.

"The building blocks on a long-haul cost base are much different to a short-haul cost base," he explains. "Even if you can turn your aircraft around in 25 minutes it doesn't make any difference on a long-haul flight, because a long-haul flight is seven hours, so you can't get any more utilisation of your plane."

Rather than using Dublin as a transatlantic gateway for any such venture, Millar conjectures that mainland European hubs such as Frankfurt might be more appealing.

The advent of composite technology in the Boeing 787 as well as more efficient engines on the Airbus A350 would go some way to making low-cost, long-haul a reality, he adds. But even with reduced fuel burn, Millar highlights branding challenges associated with incorporating high-yielding premium cabins.

"Somebody will eventually crack it," he insists. "But at the moment it's not for us. We don't want to contaminate our existing business, which runs very, very successfully."

Turning his attention to Ryanair's present-day European operations, the CFO says its new bases at Warsaw Modlin and Budapest Ferenc Liszt airports have encountered tough pricing landscapes in spite of high load factors.

"It's very competitive in eastern Europe. We're competing with the likes of Wizz Air, LOT and others ... Load factor is good but unfortunately [we have] lower yields."

Millar reiterates his criticism of Spanish airports operator AENA, which has doubled airport departure taxes at Madrid Barajas and Barcelona El Prat airports. Ryanair has responded by reducing capacity increases at the two gateways - on top of its plans to ground 80 aircraft during the winter season.

Referring to the seasonal reduction in capacity, he says: "With very high oil prices, in the winter it doesn't make commercial sense to run some of these routes ... The more you're flying, the more you lose."