Originally Posted by USA Today12:21 PM/ET, Apr 12, 2007
Ryanair CEO talks of new trans-Atlantic carrier with $12 fares to Europe
Is the idea of a $12 flight to Europe too good to be true? Maybe not, if Ryanair CEO Michael O'Leary gets his way.
Bloomberg News reports that the Ryanair chief "plans to start a no-frills trans-Atlantic airline, offering fares as low as $12, following the 'open skies' accord between the U.S. and European Union. The new airline would fly from Ryanair's existing bases including London Stansted, Dublin and Frankfurt-Hahn, O'Leary said today in a briefing to reporters. The carrier would go to secondary U.S. airports at destinations including New York, San Francisco, San Diego, Boston, Dallas and Florida," Bloomberg adds. In Europe, Ryanair is known for its rock-bottom fares -- and for its absence of even the most basic amenities.
O'Leary's trans-Atlantic effort would start in three or four years, The Associated Press quotes him as saying. Flight International magazine mentions Baltimore, Providence and Long Island's Islip/MacArthur as airports that would be top U.S. candidates for the service. O'Leary is quoted by Reuters as saying the new unit would initially be funded by private investors. "There are a lot of investors who are very keen to see a low-fare airline operate a transatlantic service, and money is the last thing we'll need," he says. Reuters adds that the trans-Atlantic unit "would be a sister or associate company rather than part of Ryanair."
The move would put the new airline up against full-service carrier like British Airways, Virgin Atlantic, Lufthansa and others. Some analysts are skeptical. "Ryanair's business model to date has been superb but this could be a bridge too far,'' David Buik, an analyst at BGC Partners in London, tells Bloomberg. “He may well have to reconsider starting an airline in a market that's already incredibly competitive.''
Buik also wonders if the comments are meant to get the attention of Ireland's Aer Lingus, for which Ryanair has launched a so-far unsuccessful takeover bid. "What O'Leary wants to do is bring Aer Lingus back to the table,'' Buik says. "For Aer Lingus, being a relatively small carrier, to have somebody on your doorstep say that they're planning to fly people across the Atlantic for 12 bucks is quite damaging.''
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