Ryanair going long-haul?

[MrG4]

Ryanair’s board has approved plans to start transatlantic flights as part of its growth strategy for the next five years.
The airline has set out proposals for one-way transatlantic tickets costing as little as £10, although some fares would be much higher.
Ryanair is studying plans to fly between about a dozen European and US cities, on a transatlantic service that could start in four to five years time if the Irish carrier can reach a deal to buy long-haul aircraft - most likely with Airbus or Boeing.
Michael O’Leary, Ryanair’s chief executive, has talked for many years about establishing a transatlantic airline offering cheap fares, and the disclosure that the board has approved outline plans suggests the company is now serious about proceeding.
Ryanair said: “The board of Ryanair, like any PLC, has approved the business plans for future growth, including transatlantic.
“We are talking to manufacturers about long-haul aircraft but cannot comment further on this. European consumers want lower cost travel to the USA and the same for Americans coming to Europe. We see it as a logical development in the European market.”
Source:The Irish Times

[airazurxtror]

The news out of Ireland this week is arguably huge: Ryanair has approved a business plan which could see it launch transatlantic service within five years. Then again, this is hardly the first time we’ve heard such stories.
The main difference this time is that the company’s Board of Directors has approved a plan to pursue the flights. This plan will require new aircraft and, by all accounts will operate under a different brand name than the short-haul Ryanair brand.
So, what new planes could Ryanair possibly acquire?
Boeing’s only other option to fill the space would seem to be the 787 Dreamliner, a very efficient plane but one with a significant order backlog. It is also possible that Boeing could cut a deal to deliver 20+ 777s to Ryanair in the 2017-2019 timeframe as it transitions to the 777X production line. Those late delivery 777s are not selling particularly well right now otherwise.
From Airbus the backlog story is similar, at least for the larger planes. Ryanair would struggle to get in on the A350 delivery timetable in the near future (plus the smaller A350-800 is no longer a viable option), but there are other options available. The A321neo 97t model is designed to fit in the same markets where the 757-200s fly today, with slightly higher range and slightly lower capacity in a two-cabin layout.
Further up the size scale the A330neo option could work in favor of Ryanair, with larger capacity and far more range than the carrier needs.
The range issue could be mitigated if Ryanair shifts more to a traditional hub-and-spoke model, something which many airlines do as they mature and grow.

Read much more :

http://airwaysnews.com/blog/2015/03/16/ ... ic-travel/

[sean1982]

B777 and A330 is too big in my opion and also the fuel economics dont add up for a lowcost adventure. The B787 or the A350 are the only ones that can play in this league. (Unless maybe some cheap B767's)

[airazurxtror]

http://www.economist.com/blogs/gulliver/2015/03/ryanair

Next stop : New York !

(extracts) :

It appears that the board of Ryanair, which is the world’s biggest airline by international passengers, has given the go ahead for an even more radical new plan: an assault on transatlantic routes.

For those who remember how effectively Ryanair shook up the sleepy, cartelish world of European aviation, this is exciting news. In fact, Mr O’Leary has long talked of his desire to offer €10 ($11) flights from Europe to North America to shake up the old guard, regular prices being in the region of €200-300 return. Transatlantic routes can be hugely profitable, and despite an open-skies deal signed between the European Union and America in 2007, traffic is still dominated by legacy airlines and European flag-carriers. As yet, budget carriers have not unearthed a model that allows them to compete.

The main reason for this has been the high cost of fueling a plane for a long-haul flight. This means that the other savings that low-cost carriers typically bring to bear on shorter routes have less impact over longer distances. However, as planes have become more fuel efficient, the equation is changing.

But it is not only about fuel. Low-cost long-haul suffers from other problems. There are some things that budget airlines find harder in long-haul than on short routes. The combination of long routes, time differences and airports’ night curfews can make it harder to turn planes around quickly. Overnight layovers mean paying for crews’ bed and board.

To make it pay, Ryanair, an apostle of the cramped, single-class cabin, will have to include a business-class section, which is the most profitable part of the transatlantic business. As these high-worth passengers demand flexibility, it will also need a fleet of as many as 50 planes to make a serious assault.

All of which means that the airline that flies across the pond is likely to be very different to that which currently traverses the English Channel. Indeed, it may not even be called Ryanair; Mr O’Leary is worried that a brand that is both divisive Europe and little-known in America will be a drag on success. But it is clear that it does have the scale to disrupt the legacy carriers.

[Thomaaas]

B777 and A330 is too big in my opion and also the fuel economics dont add up for a lowcost adventure. The B787 or the A350 are the only ones that can play in this league. (Unless maybe some cheap B767's)

The A350 is larger than the A330.

[mad_fab]

If FR plans to start with a new type, will they reproduce the successful "only one type in the fleet" model like they did with the 738?

If so, wouldn't it make sense to start with a recent model? Meaning 777X, 787, A350?

[sean1982]

At the start of the low-cost era in FR they also started with mix of B737-200's leases from different operators in different configs. I wouldnt rule it out

[mad_fab]

Yeah, I remember the pretty well, the good old Hertz 732 and some other.

I think that the 787 would be a "logical" choice (strong bond with boeing, new generation aircraft, etc), but now there's the backlog problem.

So maybe, if they want to start quickly, they will lease some other types, available on the market (757? 767?).

I'm curious, but I wouldn't be surprised if they end up with a huge fleet of 787.

[Flanker2]

MOL has been singing this old song as if it was the Irish national anthem.
It's just marketing and the media fall for it again and again and again...

The idea is interesting, but longhaul needs a hub and spoke model, regardless of whether it's lowcost or not.
Otherwise there is no way in hell you can get enough people together to fly longer routes.
If they use FR to feed this Longhaul LCC, they risk destroying FR from a cost perspective.
At the same time, setting up a parallel feeding operation would be expensive as hell and would make it difficult for the project to achieve lower costs.

If you really want to be succesful with a longhaul LCC, you have to be very radical.
Norwegian comes nowhere near that, it's just basic longhaul that they're trying to sell as lowcost, but it really isn't that cheap.
Forget widebodies, none of the modern widebodies are efficient enough for longhaul LCC operations, including the A330NEO, A350XWB, B787, B777 or B777X. The A380 is way too much aircraft to operate efficiently.

I think that MOL already knows that.

[b-west]

And the plans for transcontinental flights just got cancelled again, much to everyone's surprise. And with everyone I of course mean everybody without a long term memory, which does seem to include the esteemed members of the press.

Honestly, I'm pretty sure there must be a bet on in the Ryanair HQ "will the press fall for this years US flights announcement?". But kudos to MOL and FR, cause each time they get exactly what these announcements are all about: free publicity, courtesy of a bunch of ignorant and gullible 'journalists' .

[Inquirer]

Indeed, Ryanair's board was even forced to post a regulatory statement denying the words of their own mangement team, yesterday!

http://www.tijd.be/detail.art?a=9613284&n=3085&ckc=1

A regulatory statement is no non-event, so I'm not sure this is part of their usual search for free PR.

I am increasingly convinced there is a devide on strategy amongst those running the airline: on one side a very vocal group -including the CEO- who's willing to go transatlantic and who's pushing very hard for it, and on the other side a more thoughtful group who's afraid it probably isn't possible unless Ryanair ditches its entire business approach and fears it may destroy the unique selling point of their company in the process.

Just as them and Flanker2, I too doubt you can make transatlantic flights work with a traditional Ryanair approach: for such flights to be meaningful in volume and revenues, they'd probably have to include a true premium class (including all expensive perks that come with it) and some good feeding too, 2 things which aren't complementary with today's Ryanair product and which I wouldn't advice them to start offering throughout their route network just to accommodate some transatlantic flights either!

Since transatlantic flights require so many new features from what they only offer today, it's something which might better be done through a completely separate airline. It's why their CEO was so keen on Aer Lingus (as it would have given them the whole structure needed in one go) and why I am convinced they should have launched a completely new and separate airline for Europe i.s.o. trying to improve Ryanair once it became clear they'd never manage to buy Aer Lingus as that newly created regional airline could then be used as commercial stepping stone for transatlantic flights later, just as Germanwings is planning on doing too, btw.

With what they are doing right now however, they are just eroding their unique selling point while at the same time never being able to make their product accommodative enough to serve as a platform for tany future transatlantic aspirations of some on their board anyway: it may be high time to split up before they ruin their company over constant strategic squabbling like what was displayed here!

[Inquirer]

I don't pretend to be anything at all, Sean, in fact I have been very forthcoming about myself.
I merely share my thoughts on aviation and more precisely its management from a financial point of view.
It's up to the reader to decide whether or not there is any sense to it at all, but without claiming any bragging rights, it's not like I didn't call several unexpected market trends early last year, didn't I?

I do not know many of the practicalities of working for an airline, but I do know how to read a balance sheet without need for an explanation from the company and I do know how a boardroom of a large multinational works too: let me tell you it's nowhere near what is subsequently make of their deliberations.

In this case, there was a little bit too much spin put on it at first even, to the point the boardroom was subsequently forced to recall the previous PR as it risked having a binding element on them through allowing influencing investor's behaviour! As said: no non-event for sure and very telling to somebody who knows a bit about corporate governance.

Here you have the brief and unambiguously clear regulatory statement filled by ryanair yesterday just before closing time (which in itself is a telling timing too), should you want to see reality for yourself: http://www.londonstockexchange.com/exch ... 87938.html

Regulatory statements are stripped of the usual PR you may be a little bit too much used to and are often very sobering; this one definitely is.

[Boeing767copilot]

Kenny Jacobs, Chief Marketing Officer, Ryanair
» Interview
14/03/2015

http://www.atn.aero/analysis.pl?id=1574


ATN: Is long haul model in your plans? Why yes/no?
KJ: Yes. We would love to do transatlantic flights and the business plan is there. The lowest fares would start from €10 and we would link 12 to 14 European cities with 12 to 14 US cities. However, it is entirely dependent on attaining long haul aircraft at a viable cost and at the moment, there is a shortage of available aircraft.

[Inquirer]

Kenny Jacobs, Chief Marketing Officer, Ryanair
» Interview
14/03/2015

http://www.atn.aero/analysis.pl?id=1574


ATN: Is long haul model in your plans? Why yes/no?
KJ: Yes. We would love to do transatlantic flights and the business plan is there. The lowest fares would start from €10 and we would link 12 to 14 European cities with 12 to 14 US cities. However, it is entirely dependent on attaining long haul aircraft at a viable cost and at the moment, there is a shortage of available aircraft.

That's obviously one example of the many remarks by an exec floated in the press which got firmly recalled by his board, yesterday.

Not a very nice view for sure: it shows you to what extend the schisma must have evolved internally to be fighting it out on the streets almost, first by one group trying to publicly arm twist the rest into following them and then those guys -not willing to go along- playing the boardroom power game by enforcing those dissenting exacs back in line through issuing a regulatory statement denying all their claims!

Ryanair is taking dangerous steps towards becoming a legacy airline.
I didn't mind Ryanair raising their fares slightly, but in recent times on the set of destinations that I fly, fares have doubles or tripled versus previous years, while frequencies have been spread very thin. This is probably the expense to pay for FR going into traditional airports.

As I have pointed at many times before, if traditional airlines manage to get their avertage ticket fares somewhere near those of ryanair, the incentive to fly ryanair is non-existent and they become just another airline really, making themselves largely irrelevant.

There were long discussions last year as to how (un)likely it is for any network airline to do just that, but meanwhile we have good indications that indeed Brussels Airlines seem to have managed to come fairly close to doing just that and the results at BRU are telling. In part that is due to their own unexpectedly strong commercial, operational and ultimately also financial performance, but in part it is also due to ryanair making it easy on competitors by accepting a much higher cost base then they used to have in order to 'improve' themselves for no obvious reasons whetsoever, other than the illustrious hope by some execs that they could then use this improved platform to launch transatlantic flights from, hence them constantly keeping the PR up on that issue, much to the dislike of their own board, it seems.

As flanker said: ryanair should stay in their niche: the obsession of it's CEO to break out of it first risked seeing them seriously overpay for Aer Lingus as their second 'premium' brand, and now -worse even- risks destroying the unique selling point of the airline as it wants to morph into an Aer Lingus itself then!

As said: maybe he should just leave ryanair and set up his own airline then: it wouldn't be the first exec to do that after a disagreement with the board of the company he runs, you know?

[sn26567]

A comment in The Economist:

One theory, as we noted in our earlier article, is that while Ryanair is indeed keen to start flying across the Atlantic, it is reluctant to do so under its own brand because of the antipathy in which it is held by many European travellers. The Irish Independent suggests that it therefore might prefer to take a majority stake in a new enterprise, or perhaps launch a subsidiary. Hence the confusion in the earlier statement. If there is a lesson, it is that, despite the good copy that Ryanair affords travel commentators, nothing it says should ever be taken as gospel.

I could not agree more!

[airazurxtror]

As a rule, a statement by a commercial company is never to be taken as gospel.

[Passenger]

Indeed, the list with those untrue statements from Ryanair’s management is long, very long. By the way, there’s a better word for these statements: “lies”. Only purpose: to save on newspaper and television ads.

- Ryanair will cancel two of the three toilets to increase capacity

- Ryanair will charge 1 UKP / 1 EUR for the use of toilets

- Ryanair will offer onboard poker games

- Ryanair will sell online porn

- Ryanair will cancel the seats and replace them by stand-up places

- Ryanair will ask passengers to carry their checked luggage to the aircraft

- Ryanair will forbit checked luggage at all

- Ryanair will introduce a one-pilot cockpit crew

- Ryanair will become a consumer friendly airline

- Ryanair will fly long haul (March 2015)

see also 13 april 2007:
http://www.heraldscotland.com/ryanair-p ... 7-1.856095

[regi]

Ryanair will add Ostend (again) to its destinations.
Wonder when some regionnal control organs will check what happened with the > 1 m € subsidies

[3toons]

Seriously? Where did you read that Regi?

[airazurxtror]

Ryanair going long-haul from Ostend ? Not a bad idea - the runway is long enough ...