By James QuinnThe board of Ryanair has been forced to admit it is not considering flying across the Atlantic just days after it said it was.
In a brief stock exchange statement, the Irish airline said it had not approved any such plans, nor would it.
“In the light of recent press coverage, the Board of Ryanair Holdings plc wishes to clarify that it has not considered or approved any transatlantic project and does not intend to do so.”
The riposte comes just days after the airline said it was working on plans for trans-Atlantic flights from as little as €10.
The Irish carrier had said in a statement that it was talking to manufacturers about buying planes to serve new routes between various European airports and 12 to 14 American cities.
“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,” a spokesman said on Monday.
“The business plan is there but it’s dependent on attaining viable long haul aircraft and we estimate that’s 4 to 5 years away.”
Michael O’Leary, the airline’s chief executive, has long spoken about his desire for Ryanair to carry passengers across the Atlantic. However, the company has struggled to find a way to make it pay.
Other companies have learned the hard way of launching rock-bottom fares to the States. Freddie Laker launched low-cost flights to the US in 1977, only for Laker Airways to go bust five years later. Norwegian Airlines started offering budget tickets between London and New York last summer, though the achievement was marred by the carrier falling to an annual loss for the first time in eight years.
Others to have tried cheap flights to the States include Zoom Airlines, which ceased operations in 2008, and Icelandic carrier Wow Air, which will later this year launch £99 tickets from London Gatwick to two US cities with a stopover in Reykjavik.
Ryanair is Europe’s largest budget carrier with 86.4m passengers last year. It has embarked on an ambitious plan to increase its traffic to 150m passengers by 2024 and Mr O’Leary is focusing on a cuddly ‘new Ryanair experience’.
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Ranges of Boeing 737 MAX compared to Dreamliner
Range 3,800 nautical miles Boeing 737 max (4,373 miles)
Range: 8,300 nautical miles Dreamliner (9,551 miles)
Distances
London to New York 3,459 miles
London to Washington 3,662 miles
London to Florida 4,386 miles
O’Leary said the new MAX jets would not allow Ryanair to offer transatlantic service, because the range is not sufficient to reach enough U.S. cities.
Earlier:
Ryanair buys 100 Boeing 737 MAX jets, sees fare price war
BY ALWYN SCOTT
8.9.2014 (Reuters)
Ryanair Holdings Plc, Europe’s largest low-cost carrier, signed a deal on Monday to buy 100 Boeing Co 737 MAX jetliners for up to $11 billion (7 billion pounds), launching a new version of the single-aisle plane that will allow it to squeeze in more passengers and ramp up fare price wars.
The Irish airline also secured options on 100 more of the modified 737 MAX 8s, dubbed the 737 MAX 200 because it can seat up to 200 passengers, bringing the value of the deal to about $22 billion, if all the options are exercised.
Ryanair’s chief executive officer, Michael O’Leary, said he aimed for the airline to carry 150 million passengers a year by 2024, up from an earlier target of 120 million and up from the about 82 million passengers it carried in 2013. He said Ryanair intends to exercise all the options because the 200 new planes are key to achieving its target growth.
Ryanair already is the largest airline in Europe, and O’Leary said the new Boeing planes will further cut Ryanair’s operating costs, allowing it to take market share from legacy carriers such as Lufthansa, SAS, British Airways and Alitalia.
“It means that we’re going to expand and grow very strongly in Europe, both in new markets and in going in and taking traffic away from incumbent carriers,” he said at a press conference in New York where he and the chief executive of Boeing Commercial Airplanes, Ray Conner, signed the deal.
“I hope it will hasten in an era of a new price war in Europe over the next 10 years, which like all the old price wars, Ryanair will win.”
O’Leary said the new planes, which will have two additional doors, will seat eight more passengers than the 737-800 models currently in Ryanair’s fleet. The planes reduce fuel consumption by about 18% compared with current models, and with the additional seats the cost would be about 20 percent lower, O’Leary said.
O’Leary said the extra seats would generate about 1 million euros of additional revenueper plane per year, most of which will go to the bottom line.
Ryanair will pay a “modest” premium for the planes, O’Leary said, but the extra cost “is truly justified by the seats and engine economics.”
Conner characterized the premium as “huge,” but neither executive would detail pricing. The 737 MAX 8 has a list price of $104 million, but airlines typically negotiate steep discounts.
AIRBUS SAYS EXTRA SEATS COME AT A COST
O’Leary said he had pressed Airbus and Boeing for 10 years about a larger single-aisle plane, believing that the 200-seat size is the “sweet spot” for low-cost carriers.
The Airbus A320 has 180 seats compared with 189 for the 737-800, and it couldn’t be reconfigured to add the additional capacity that Ryanair sought, he said.
Airbus said the MAX 200 configuration would remove three of eight galley trolleys – the carts used for serving drinks and meals – to make way for more seats, leaving only five trolleys for 200 passengers. “Even low-cost carriers need more than that if they are serious about on-board sales and ancillary revenues,” Airbus spokeswoman Mary Anne Greczyn said.
Airbus said seats on the Ryanair MAX 200 would be spaced more closely, with less legroom than on the A320. O’Leary said that by using new, slim seats, the spacing is about the same.
Airbus also said the MAX 200’s additional doors would increase the plane’s weight, reducing its fuel-cost advantage.
“Even with 200 seats in the 737 MAX and 189 in the Airbus A320neo, the Boeing aircraft has significantly inferior per-seat fuel burn,” Greczyn said.
Last year Ryanair placed a $15.6 billion order for 175 Boeing 737-800 jets. O’Leary said in July he would keep that order, even as he studied the higher-density MAX version.
Reuters reported on Friday that Ryanair was in advanced talks to order at least 100 MAX jetliners.
Boeing shares closed up 2.6 percent to $127.98. Ryanair’s stock closed down 0.1 percent to 7.483 pounds.
Boeing’s Conner said low-cost carriers could eventually make up 35 percent of the market for single-aisle airplanes. Boeing’s chief 737 competitor, Airbus Group’s A320, also is getting refreshed with new engines.
O’Leary said the new MAX jets would not allow Ryanair to offer transatlantic service, because the range is not sufficient to reach enough U.S. cities.
Ryanair has a plan to operate a long-haul service as a subsidiary, but needs 30 to 50 long-haul aircraft to make it work.
“The availability (of those jets) just isn’t there for another four or five years,” O’Leary said.
(Reporting by Alwyn Scott in New York; Additional reporting by Connor Humphries in Dublin, Ireland,; Editing by Jeffrey Benkoe and Leslie Adler)
http://uk.reuters.com/article/2014/09/08/uk-boeing-ryanairhldgs-idUKKBN0H31E220140908
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The airline intends to offer the cheap flights from between 12 to 14 European cities to the same amount of destinations in America.
However, the transatlantic flights won’t be available for up to another five years when the company gets the long-haul aircraft it needs.Michael O’Leary, the airline’s chief executive, told the Irish Hotels Federation conference in Meath that Ryanair would offer the €10 (£8.21) flights to Boston and New York.
Flights back to Europe from the US would cost $10 (£6.00).
However, he admitted that passengers would pay extra for everything from meals to baggage.
He said: ‘We can make money on 99 cent fares in Europe. Not every seat will be €10 of course; there will also need to be a very high number of business or premium seats.’
Last year he said: ‘There is 15 per cent of the public who will pay for the frills and you will be mad to switch off from that’.
Mr O’Leary has previously said that ‘a fleet of 30, 40, 50 aircraft and not two, four or six’ would be required to get the operation up and running.
The airline’s chief executive Michael O’Leary said 30 to 50 planes will be needed for the service
Ryanair has long been accused of luring customers in with low fares while charging sky-high fees for ‘extras’.
Mr O’Leary has been the face of Ryanair for almost 20 years and has a reputation for being outspoken.
