By Murdo Morrison and David Learmount in Dublin
Ryanair intends to launch a no-frills long-haul airline around the turn of the decade serving five or six US cities from its 23 European bases and offering fares as low as $12.
The no-frills carrier will operate independently of Ryanair and buy a fleet of up to 50 Airbus A350s or Boeing 787s at a time when chief executive Michael O'Leary expects prices to dip following the current surge in orders.
There has long been speculation that Ryanair will enter the long-haul market, but this is the first time O'Leary has outlined concrete plans. In an exclusive interview to be published in next week’s Flight International magazine, he says the recent Open Skies agreement, which allows airlines to operate transatlantic flights without individual national bilateral deals from 2008, has made it possible.
Going transatlantic; O'Leary plans long-haul airline
With "the cheapest fare €10 ($12)", O'Leary expects the services, to secondary airports such as Baltimore, Providence in Rhode Island and New York Long Island Islip Macarthur "to be full". He expects sales of food, drink, duty-free goods and in-flight entertainment to be a major revenue earner.
However, the new airline will have a "premium class" pitched against "the best in the business" such as Virgin Atlantic.
O'Leary says he has already had speculative approaches from US airports and is confident the venture will succeed despite the failure of several transatlantic low-fare airlines over the years.
"By mid 2009, we will be carrying 70 million passengers at 23 bases across Europe," he says. "It will be relatively straightforward for us to do a deal for 40 to 50 long-haul aircraft and connect these bases transatlantically. There would be no one to touch us."
The new airline will be run entirely separately from Ryanair with its own executives and board and a different name, says O'Leary. There would be no cross-ticketing or connecting luggage. Running the long-haul operation as a subsidiary "would be a distraction for Ryanair", he says. "The minute you put a long-haul business on top of a short-haul operation you kill it."
The venture is being pursued independently of attempts to take over fellow Irish carrier Aer Lingus, something O'Leary says could still happen. However, Ryanair is not interested in the recently-privatised flag-carrier's Airbus A330-based long-haul operation and would focus on Aer Lingus's "mid-price, mid-frills" services from Dublin airport to major European airports such as London Heathrow and Paris Charles de Gaulle, running them separately from Ryanair. However, Ryanair's offer document for Aer Lingus confirms that the airline will continue to operate its long-haul business, even if majority-owned by Ryanair.
For a full analysis of how O'Leary's plans are likely to impact the industry, read next week's Flight International, which goes on sale in the UK on Tuesday 17 April with its content available online from 16 April on flightglobal.com.