Ryanair plans cheap transatlantic flights, warns of deep recession




November 3, 2008
1. Various of Ryanair Chief Executive Michael O'Leary posing for photographers
FILE: Recent
2. Various of Ryanair planes on tarmac
November 3, 2008
3. Wide of O'Leary at news conference
4. Various cutaways of media at conference
5. SOUNDBITE (English) Michael O'Leary, Ryanair chief executive:
"If we can secure a fleet of long-haul aircraft cheaply this winter, in the next twelve months - and that may be possible during the recession - then we would plan to launch a transatlantic low-fares airline probably in about two to three years time. We have the plan. It would see us fly from about six or eight European cities to about ten or twelve US cities. The lead-in economy fare would be ten quid (pounds) one-way across the Atlantic, but with also a very high-quality high-price business premium cabin in the front of the aircraft."
FILE: Recent
6. Various of Ryanair passengers at airport
November 3, 2008
7. SOUNDBITE (English) Michael O'Leary, Ryanair chief executive:
"We think the recession is going to be very bad this winter and into next year for the European economy generally and for airlines generally. But it's going to be good for Ryanair in a bizarre way, because I think, more and more, passengers are getting ever more price conscious, price sensitive. You can see people clearly trading down from high-fare fuel-surcharging airlines like BA (British Airways), and selecting the lowest-price option which is always Ryanair."
(Q: "What is the aviation industry going to look like once the recession is over?")
"I think in the next two years in Europe you're going to see the emergence of four large airlines. BA, Air France, Lufthansa - all engaged in fuel surcharging, high prices, cutting back capacity - and then Ryanair."
FILE: Recent
8. Ryanair plane taking off
STORYLINE:
The budget airline Ryanair announced a sharp dive in half-year profits on Monday - down almost 50 percent to 215 (m) million euros (273.7 million US dollars) - as its chief executive warned the recession would carve a swathe through the aviation industry.
Addressing a news conference in London, Michael O'Leary blamed the slump in profits on high oil prices earlier in the year.
He predicted that within two years Europe would be left with just four major airlines - British Airways, Lufthansa, Air France and Ryanair itself.
"We think the recession is going to be very bad this winter and into next year for the European economy generally and for airlines generally. But it's going to be good for Ryanair in a bizarre way, because passengers are getting more price conscious," he said.
O'Leary also said he was planning to launch a transatlantic service, flying passengers from Europe to the United States for as little as ten pounds (15.8 US dollars) each way.
"If we can secure a fleet of long-haul aircraft cheaply this winter, in the next twelve months - and that may be possible during the recession - then we would plan to launch a transatlantic low-fares airline probably in two to three years time," he said.
O'Leary said he would set up a sister company rather than use Ryanair itself to run the transatlantic service.
Despite the current fall of oil prices to around 60 US dollars a barrel, O'Leary reiterated previous guidance that Ryanair expects to record losses in the current October-March period and break even for the full fiscal year.
O'Leary said he would use fuel-price savings to discount average fares this winter by 15 percent to 20 percent.
He said Ryanair, which retains cash reserves exceeding 2 (b) billion euros (2.65 billion US dollars), must exploit the economic downturn and keep seizing market share from debt-saddled rivals.
The company's shares rose, despite Monday's profit report.

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