Thursday, April 12, 2007

Ryanair comtemplating across the pond operations

I had to check the publication date on Flight International's recent article, "Ryanair boss Michael O'Leary plans launch of transatlantic no-frills airline with fleet of 50 Airbus 350s or Boeing 787s," click here, and make sure that it wasn't an April Fool's joke. It seems to be geniune enough considering it is dated April 11th.

Apparently, O'Leary and his team are looking at launching a trans-Atlantic subsidiary to the US following the recent Open Sky agreement. It would link with Ryanair's 23 bases in Europe with a handful of secondary airports in the US: Baltimore, MD; Providence, RI; and Islip, NY. The operation would be a separate entity from Ryanair and would not offering connecting services for passengers. O'Leary makes the point that they want to avoid complexity in the business model. Keeping activities simple and uncluttered allow for easier adjustments and trials. The operation will most likely utilize A350s or 787s and will be purchased near the end of the decade when they expect the demand to soften and prices to come down.

The article does not mention continuing on inside of the US. However, with Tony Ryan's investment in Allegiant and that airline's statement that it wants to be a Ryanair look-a-like, that may be something in the works. Of course, cross-Atlantic low-frills flying is not new to aviation. Laker's SkyTrain, People Express to London, or even Icelandic Air's former backpacker image. However, all these airlines are now defunct (except Iceland Air, however its image has certainly improved from its earlier days). There are various explanations for their failure, however Ryanair has something they didn't: passenger feed from all of the EU. People Express did have its US feed, however the CEO,
Don Burr, did state that distribution strategies of People Express' competitors helped to undermine the airline. Ryanair is operating in the age of the Internet and doesn't have to fight with competitor-owned GDS'.

No one can say that the airline industry sits still for very long.

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