Ryanair wants to offer $15 transatlantic flights; expert says it could be a game changer

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VANCOUVER (NEWS1130) – Europe’s largest low-cost airline is trying to break into the North American market, with fares from as low as $15 for transatlantic flights.

Ryanair is still a few years away from actually launching flights but the move is already seen as a potential market changer.

“The key, of course is aircraft. They will probably buy new, fuel-efficient aircraft, which is part of their business model to keep their costs low,” says Joseph D’Cruz, a professor of strategic management with the University of Toronto’s Rotman School of Business.

The Ireland-based company conquered the European market by cutting costs wherever possible.

“They’ve really optimized the low-cost model in Europe. And that has transformed European short-haul travel. It has made the traditional carriers unprofitable because [Ryanair has] swept up so much of the demand. They are a brutally low-cost airline. In fact, at one point, they were thinking of offering an option of not giving you a seat and having you stand for short flights, strapped to the aircraft,” says D’Cruz.

Aside from new aircraft (D’Cruz says they will likely lease new long-haul planes), the company’s other big challenge is finding room.

“They’ll need to get landing slots in the important spots like Toronto and Vancouver and that will be the most difficult thing for them to do,” says D’Cruz.

The company found a way around that in Europe by sticking to regional hubs like London’s Stansted Airport. D’Cruz says they could do the same here, landing at places like Abbotsford or Hamilton rather than Vancouver or Toronto.

He says the concept itself could force competitors to change how they do business.

“Ryanair is what we call ultra-low cost. It’s one notch below the low-cost airlines. So this is a new phenomenon in the airline industry and it will be a new kind of competition in the airline space.”

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