There’s been a lot of publicity and press recently surrounding a myth perpetuated by Ryanair that they would, one day, like to start doing transatlantic flights with fares (this is the crucial part) for around â‚¬/Â£/$10 (currency seems to depend entirely on the newspaper). All the papers and major news outlets, without fail, have grabbed onto this and paid seemingly little attention to the major economics of the whole thing.
We’ll start with some basics – low-cost long-haul flying is very difficult indeed. If you pay, let’s say â‚¬80 one-way to Frankfurt or Dusseldorf from Dublin (1.5 hours flying time roughly), but you pay only say â‚¬350 or less one-way based on a round-trip ticket to Asia (10 hours minimum and upwards), then already the margin earned when stretched out over the hours and distance is much less. Factor in also that in the majority of cases you need to at least provide enough food to keep someone alive, whereas you don’t on a short route, and it’s getting costlier. Add to that increased overflight charges for all the countries being overflown, security and airport duty charges, etc. and the whole thing sounds very uneconomical and that’s already being based on the costs on a legacy carrier.
But taking it low-cost is even worse; this isn’t discussion, this is fact. Let me hit you with some recent examples (because let’s be real, we’re all sick of hearing the Freddie Laker/Skytrain example, which is dated to say the least at this point); Zoom Airlines, Oasis Hong Kong, even AirAsia X have all tried and suffered immense difficulty making low-cost long-haul work. AirAsia X? We’re effectively talking Asian Ryanair here – if they can’t figure this one out between Asia and Europe, then it’s not looking good.
The talk on the street is that Ryanair have admitted as much; claiming that they would need strong passenger loads of varying price points, but moreover a strong business offering. Strong? It would need to be out of this world. It would need to still be at a reduced price to the legacy carriers’ offerings, while being just as good if not a little better. Again, citing the AirAsia X example, they have a pseudo-business class, and they fly it a little over the cost of a standard economy ticket on the other airlines, even though it’s just as good as standard business in many cases.
The other simple fact is – all the talk in the newspapers have been on transatlantic offerings. I know airlines have been consolidating and all the rest these last few years, but seriously, there’s already more aircraft beating a path over the Atlantic every day from Europe and vice-versa than we know what to do with – competition is very strong as it is. Maybe not if you insist on flying direct from your home airport to wherever you want to go, but go through Frankfurt, Amsterdam or (the dreaded and pretty awful) Heathrow and you can go practically anywhere at a very competitive price.
Lastly, there’s only so much you can get away with charging for on a long-haul airline before it becomes more economical for passengers to ante-up the difference for a different airline. So what to do?
The only way I can imagine this working – and even that’s at a push – is to make sure nearly every economy seat is lower than legacy carriers’, except at the very last minute. The business class section would need to actually be better than other carriers’ in order to justify a premium price tag, which would still need to be slightly lower than normal business class fares. Charge for everything, which is the Ryanair way anyway – luggage, food, in-flight entertainment – actually, I’d forget the IFE entirely in favour of a solid WiFi service since most people these days bring their own devices anyway and you could save a lot of weight (and maintenance) not carrying unused seatback monitors around. Try and do the Norwegian thing (which hasn’t worked for them, but that seems to be down to their choice of aircraft) and keep aircraft flying 18 hours out of 24. Since the economy seating is likely to be pretty packed, I’d pay a serious premium in such a situation for bundles of increased luggage allowance and a better seat, etc. – I know they’re not normally an example of low-cost virtue, but Aer Lingus do a good job of foisting a ‘package’ on you during the booking process.
And even then, â‚¬10 will be nothing more than a distant dream for the majority of passengers…