Ryanair to Enter US Market: Will We See $14 Fares to Europe?
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Budget European carrier Ryanair has announced the approval by its board of a 5 year strategic business plan to expand into the US market. Transatlantic fares would reportedly begin at just £10 each way, although each flight would have a minimal number of seats available at that cost. Known for perfecting the low-cost carrier (LCC) model in Europe, as well as for its irreverent CEO Michael O’Leary, Ryanair has overcome its notoriety for hidden fees and developed a tremendous following and fan base. Should this plan come to fruition, it will be interesting to see whether Ryanair can break the mold of failed discount airlines that offered transatlantic service, and become financially successful in this arena.
According to a Ryanair spokesman, the greatest hurdle to beginning service is acquiring fuel efficient aircraft that have the range to fly transatlantic routes. Ryanair’s fleet is currently made up exclusively of 737-800 aircraft. Discount airline Norwegian, which is already flying transatlantic routes, invested in fuel efficient 787s for its operations, and is still trying to figure out how to turn a profit after posting a net loss of 120 million Euros in 2014.
There are several options for Ryanair to consider, including the A330neo, A350, 787-10, or perhaps staying in its own wheelhouse with the 737-900 MAX for east coast routes. Without knowing which aircraft is at the top of its list, continually delayed deliveries and slowing demand could help put the ball in Ryanair’s court. One thing is for sure, I would love to be a fly on the wall when Michael O’Leary brings his antics to the negotiating table with Airbus or Boeing.
It’s hard to evaluate this plan without knowing what routes Ryanair plans to fly. The airline is famous for choosing smaller airports that are further from main attractions, sacrificing passenger convenience to lower costs. Ryanair might opt to continue this strategy in the US, or shoot for mainstream airports and hubs. Ryanair has mastered the art of ancillary fees, charging passengers for everything from seat selection and boarding passes to airport check-in, even going so far as to install coin mechanisms on restroom doors.
A $30 transatlantic ticket sounds intriguing, but if the base fare, taxes, seat selection, checked baggage fees, and the fee for printing my boarding pass end up costing me $500 to fly from White Plains, NY to London Luton (for example), then I’d rather just pay a bit more for convenience and gain a few extra inches of space for my 6’1″ frame.
Ryanair faces other obstacles to turning a profit in this market, including airport taxes and fees, US DOT approval (which hurt Norwegian Air last year), government lobbying from US legacy airlines to deny further competition, and finding customers who won’t mind being uncomfortable for 6-10 hours on a Ryanair jet. $30 seems like an incredible deal regardless of the pain and suffering you must endure on a 7 hour flight, but when you add up all the fees mentioned above and factor in the likelihood that $15 fares will disappear quickly for most flights, you’ll likely pay a lot more than what’s originally advertised.
With low-cost carriers delving into the transatlantic market and the Euro now almost even with the US dollar, perhaps this is just more fantastic news that will make Europe even more accessible to us North American travelers.
Would you take a transatlantic flight on Ryanair?
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