Ryanair resurrects long-haul service concept

Ryanair has resurrected the idea of operating its own long-haul flights at some point, despite having seemingly killed off the notion two years ago.

Speaking to Bloomberg at an event in Brussels, Ryanair boss Michael O’Leary was yesterday quoted as saying that the company has not completely given up on offering its own transatlantic flights. However, he noted the plan is low on the list of priorities, partly due to Boeing and Airbus being booked up on orders for relevant-sized planes out to the early 2020s.

“When Boeing and Airbus have 80 or 100 spare slots for long-haul aircraft that they desperately want to shift at a low cost, we’ll jump on it,” he said. “But we’re not going to kill ourselves at the moment when their order books are full out to 2020-2021.”

Ryanair has been heavily linked with a long-haul service for years, but seemed finally to end all such talk at its September 2015 AGM when chairman David Bonderman said: “We have no intention in flying trans- atlantic.”

Meanwhile, Mr O’Leary told Bloomberg that Ryanair’s more immediate plans to connect with long-haul carriers should help clear away more competition for the Irish carrier on its European routes.

Last month, Mr O’Leary said Ryanair is relatively close to signing a feeder flight/connectivity deal with a transatlantic carrier whereby passengers can use Ryanair to link with long haul connections and have their baggage seamlessly moved between the two planes. Ryanair has been talking to Aer Lingus owner IAG, Norwegian Air, Alitalia and Lufthansa about a connectivity deal and could have one in place by the summer.

“The upside for us is in persuading the legacy carriers to stop trying to compete with us on short-haul because it feeds their long-haul,” he said. “Work with us on short-haul, you lose less money, I’ll have less competition.

“There’s nothing but upside for the legacy carriers in this, except you’ve got to persuade them it’s not some scam.”

Meanwhile, new data from global trade body the International Air Transport Association shows that premium air fares continue to hold up better than economy fares, which is helping to support airline financial performance. The association said the fourth quarter of 2016 saw a “solid” performance for the airline industry.

However, it said global airline share prices only increased by 1.5% in January, underperforming the broader global equity market, which rose by 2.6%.

Easyjet recently warned that a weak sterling would eat into its profits this year while Ryanair earlier this week maintained forecasts for its current financial year but said it missed earnings targets for its third quarter.

Last Monday, Ryanair reported revenues of €1.34bn for the three months to the end of December.

While these were up by 1% year-on-year, net profits for the quarter fell by 8% to €95m, driven down by average fares falling by 17%. Analysts had expected revenues of €1.36bn and profits of closer to €100m.

Ryanair’s financial year runs to the end of March and management has kept to its full-year net profit guidance of between €1.3bn and €1.35bn, although it said it remains cautious on its outlook. The company’s shares were down over 2.2% yesterday.

Additional reporting by Bloomberg


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