Stockbroker unveils plan for low-fare long-haul transatlantic airline

PLANS for a low-fares, long-haul airline which would operate flights from Ireland to the US will be presented to investors this week.

Bloxham Stockbrokers have put together a comprehensive plan for the airline, which would need an investment of $200 million (€134m) to launch.

AerFair would operate flights from Dublin to Boston, London to San Francisco, Frankfurt to New York and Paris to Chicago.

Ryanair’s chief executive, Michael O’Leary will be among the investors who will receive the document.

Mr O’Leary has previously expressed an interest in establishing a low fares, long-haul service, separate to Ryanair.

Bloxham said AerFair wouldoffer simple point-to-point services between Europe and the US at low fares.

It would fly to secondary airports, which would be located close to big cities. It is also proposed that only passenger bags will be carried on AerFair flights.

“No connections and no cargo services will allow Aerfair to operate optimally while minimising operating costs and turnaround times,” said Bloxham Stockbrokers analyst, Joe Gill.

It is proposed that the carrier is incorporated in Ireland to access skilled aviation finance and legal services, a 12.5% corporate tax and a supportive regulatory system, according to Bloxhams.

AerFair would offer two cabins – the LowAerFare and the premium AerForce1.

The airline’s model would facilitate a 30% to 50% reduction in fares relative to existing averages while producing profits for the carrier.

It will generate “significant ancillary revenues,” according to Bloxhams which said long flight times will be exploited by offering passengers a wide range of goods and services under optimal marketing conditions.

“AerFair will create an entirely new on-board wi-fi based retail offering. In addition to existing items available from legacy carriers it will offer other products such as ground transport tickets, theatre tickets, on board gambling and gaming options together with mobile telephony,” said Mr Gill.

The airline would target a 4% share of the EU-US air travel market within five years, implying an annual revenue pool of at least $360m and passenger volume of 1.2m.

AerFair will target after tax margins of at least 6%, implying annual net profits of at least $22m.

AerFair is targeting an initial equity investment of $200m to fund its launch, fleet development and a full build out of the model over five years.

Bloxham was in discussions with Boeing in the preparation of the document.


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