The Financial Times today, 16 March 2015, reports that the board of Ryanair has given approval for the airline to launch transatlantic flights.
This has been an oft repeated ambition of Ryanair, with Michael O’Leary once notoriously promising “beds and blowjobs” for premium passengers.
Now it seems that Ryanair wants to follow in the footsteps of Norwegian and Lufthana’s Eurowings and launch low cost long-haul flights.
But what are its plans exactly?
Update 19 March 2015: Ryanair has now confirmed, this time through an announcement to the stock exchange that it has no intention to launch a transatlantic airline.
Here’s what we know from the FT article:
1. The Ryanair board has “like any plc, has approved the business plans for future growth, including transatlantic.”
2. If transatlantic services will launch, Ryanair expects to launch flights in approximately four to five years.
3. Flights would not operate under the Ryanair brand. This suggests flights would be aimed at passengers travelling point to point, rather than connecting passengers from short-haul flights.
4. Aircraft would feature premium seating.
5. Ryanair’s transatlantic venture would operate from ten airports in Europe, including London Stansted, Dublin, Cologne and Berlin, and airports in Spain, Italy and Scandinavia.
6. Flights would operate to US destinations including Boston, Chicago, Florida, Miami, New York and Washington.
Here’s what the announcement does and doesn’t say:
1. The announcement was not released by way of a formal announcement to the stock exchange. Ergo, it was not considered by Ryanair to be a share price sensitive announcement.
2. By Ryanair’s own admission, they have not yet placed any orders for new aircraft. The board of a public company would not give approval to a new business venture without a firm business plan. Without knowing the cost of the single biggest item of capital expenditure, there is no business plan.
3. Airlines consider new ventures all the time. However, these are normally confidential – even when discussions with third parties are involved. Airlines do not aim to give their rivals up to five years’ advance notice of their commercial plans.
4. The number of European bases suggested (some ten of them) is, by any measure, an aggressive growth strategy for a long-haul airline. We do not realistically foresee Ryanair launching that many routes even over a period of, say, a decade.
We’re sure there is something behind this. However, we can’t help but wonder whether this is an exercise in “kite flying” to sound out Boeing and Airbus on potential deals for long-haul aircraft.
