Anglotopia

Picture from Flickr

2008 is riddled with the corpses of fallen Transatlantic airlines. We saw the loss of Eos, Silverjet, MaxJet and Zoom. Their failures reduced competition and choice for those looking to travel to England and to Europe.

I’ve been the advocate of introducing a low cost transatlantic airline based upon the Southwest Model. Cheap tickets and the tradeoff is that you have to pay for all extras. Honestly, when I fly British Airways, I don’t need the crappy food, socks, blanket and free booze. Just get me to England as cheaply as possible.

Well, it looks like that will become reality, Ryanair, the European budget airline famous for practically giving seats away is going to launch a new Transatlantic airline next year.

Their plans are ambitious. Their counting on the failures of other airlines to pick up airplanes at cut-rate costs. They’ll fly from lesser known airlines on the outskirts of major cities and charge a boatload for business class to subsidize the cattle class in the back of the plane.

According to the airline’s CEO, Michael O’Leary, flights could cost as little at £10. Passengers will still have to pay airport fees and taxes (sometimes up to $300) and they will have to pay for everything they want, from luggage to food on the plane.

From an Article in the Financial Times:

“The business plan is done . . . but it has been parked until there is a big downturn in the industry and Boeing and Airbus are parking long-haul aircraft, so we can get a deal on prices,” he said.

A long-haul business would be run separately from Ryanair. Mr O’Leary said he would bring in other investors and that he had discussed the plan with shareholders including David Bonderman, Ryanair chairman and co-founder of TPG, the US private equity group, and with former executives of Southwest Airlines and Continental Airlines of the US. The venture would aim to operate from up to 10 existing Ryanair bases in Europe to a similar number of destinations in the US.

The airline would offer economy and business class services, as without the high fare revenues from premium services rivals such as British Airways, Lufthansa and Air France-KLM could “dump economy fares to zero ad infinitum” to try to drive it out of business.

I think this is brilliant and will be great for Anglophiles on a budget. People who have been unable to go to England because of the cost barrier will now be able to go since it will cost as much as flying to somewhere in the US.

Why has it taken so long to get something like this going? Regulations stopped it, but the recent Open Skies agreements between Europe and the USA deregulated transatlantic travel and increased opportunity for competition.

Currently, it costs about $600-700 per person most of the year to fly to London, it could conceivably cost half as much under Ryanair’s plan.

They’re going to give British Airways a run for their money. Bloody Brilliant!