If the head of Europe's largest discount airline has his way, Baltimore area travelers could soon see advertising for really cheap flights across the Atlantic.
Ryanair Holdings PLC Chief Executive Officer Michael O'Leary says he wants to bring his no-frills, bargain basement service to the United States in the next few years. And industry analysts say he might be the one to pull it off.
O'Leary told European reporters last week that he plans to start an airline that would offer low-cost service from European cities to U.S. destinations including Boston, San Francisco, San Diego, Dallas and Florida cities. A Baltimore-Washington International Thurgood Marshall Airport spokeswoman confirmed that airport officials have spoken to Ryanair about offering service from Baltimore to Europe.
The announcement comes as a host of airlines eye new international markets that will be newly freed under an "open skies" agreement between the United States and Europe aimed at increasing service and lowering fares. BWI might benefit with overseas discount airlines that know the Baltimore airport as a low-cost hub. And while Ryanair's service wouldn't be luxurious, if it comes to the region it not only would fill empty gates at the airport, but also could spur others to lower their fares across the Atlantic.
Analysts and others warn that it's not a done deal. They say it's a tough time to start a trans-Atlantic airline, given the hefty start-up costs of at least $132 million and the competition in economy-class service.
And the $12 one-way fares that O'Leary mentioned could end up as a temporary marketing gimmick, and they don't include hundreds of dollars in taxes and fees.
"There is no guarantee this will work and only because it's him do I say this isn't the dumbest idea ever," said Michael Boyd, an aviation analyst for the Boyd Group in Evergreen, Colo. "There are a lot of low-fare seats across the Atlantic now. They're called the coach cabin of American Airlines and Air France. Adding more flights from Frankfurt to Portsmouth, N.H., might not work. However, you never ever underestimate Michael O'Leary because he does what he says and does it successfully."
Ryanair was launched in 1985 using the Southwest Airlines model: low-frills, low-cost, snappy point-to-point service. But O'Leary has taken it a step further, analysts say.
You won't find leather seats or snacks on his planes, or legroom or customer service. The airline now carries more than 42 million passengers to 25 European cities a year, advertising 1-cent "May Madness" fares from London's Stansted airport to several European cities including Barcelona, Spain - with fees of up to $50. It expects to fly 84 million passengers a year by 2012 on the same midsize Boeing 737s that Southwest flies. The carrier would have to buy bigger planes to fly across the ocean.
Boyd said O'Leary could make the trans-Atlantic flight work by luring passengers not currently planning to fly to Europe - those who will forgo a trip to Home Depot for a new refrigerator when they discover they can afford a trip to London. In the United States, that's called the "Southwest effect."
Boyd and others said the U.S.-Europe "open skies" agreement also will make the service viable. Beginning in March next year, airlines can fly anywhere in the United States to anywhere in Europe, instead of only to their home nations. Ryanair, for example, now can only fly from cities in Ireland to cities in the United States.
BWI had discussed service from Baltimore to Ireland with Ryanair when the agreement was reached and it has since broadened those talks, airport officials said. Ryanair was aiming to replace Aer Lingus, another Irish airline, which left BWI in 2005.
Cheryl Stewart, a BWI spokeswoman, said if a deal is reached, service wouldn't likely begin before 2010.
BWI has been trying to expand service to foreign destinations. British Airways is its marquee international carrier with one daily flight to London. In Europe, Icelandair also flies to Reykjavik, Iceland, from BWI. Flights to Mexico, Canada and the Caribbean round out the rest.
An economy seat on a British Airways' flight from Baltimore to London's Heathrow airport booked Friday for next Monday would cost $286 one way.
For its part, Southwest Chief Executive Officer Gary C. Kelly has said that the airline is preparing to offer international service. Seats would most likely be offered through the airline's code share agreement with ATA Airlines.
"But we're not quite there yet," said Whitney Eichinger, a Southwest spokeswoman.
British Airways, a full-service airline known for its passenger service, said it wasn't afraid of competition, especially bare-bones service.
"We have to compete vigorously now on the trans-Atlantic route and in Europe," said John Lampl, an airline spokesman. "We expected more competition because of open skies, how much has yet to be seen."
Ryanair's O'Leary, who couldn't be reached for comment, told European news services that most seats would be bare bones. But a percentage would be premium - business or first class - which can cost in the thousands of dollars and make the most money for carriers.
But it's the discount seats that will have the most impact on the market, said Hugo Burge, the London-based vice chairman of Cheapflights.com, a European and U.S. fare finder. He said Ryanair, like Southwest, would likely go to uncrowded, secondary U.S. airports that made it a good deal and have enough of a population surrounding them to support service. Other airlines in the market would then have to lower their prices to compete on the same routes.
So, even if travelers refused to pack into a Ryanair plane for eight hours to London - and some people will refuse - they may still benefit by getting a cheaper ticket on a rival airline, he said.
"It's well-documented that employees at Ryanair are not allowed to charge their cell phones at work, they have to bring their own pens, pilots have to buy their own uniforms and everyone has to pay to fill out an application," he said. "[O'Leary] takes this to extremes and that will make him a formidable force in the trans-Atlantic market. It will also make it uncomfortable on the plane. You'll be packed in there like a sardine. But it will be cheap."