Ryanair, Boeing 737-800, EI-DWD, Airport Cologne Bonn

MIAMI — The news out of Ireland this week is arguably huge: Ryanair has approved a business plan which could see it launch transatlantic service within five years. Then again, this is hardly the first time we’ve heard such stories. Back in 2009-2010 there was similar discussion from CEO Michael O’Leary suggesting a Ryanair Atlantic service launching by 2015. Or the discussion of such way back in 2008 with promise of service by 2010. Or perhaps the 2013 version or the 2014 version of that same tale. Amazingly they story always seems to have roughly the same price tag – bargain promo fares of around $10-20 one way before taxes and fees – so that part of the story hasn’t adjusted through the years. But does the 2015 iteration show any differences? Perhaps just enough to be worth paying attention to.

The main difference this time is that the company’s Board of Directors has approved a plan to pursue the flights. This plan will require new aircraft and, by all accounts will operate under a different brand name than the short-haul Ryanair brand. Narrow-body transatlantic (TATL) service is limited mostly to 757-200 service. Air Canada, WestJet, Sun Country and Iceland’s WOW! all operate at least one flight on 737s or A320 family planes. These flights are also much shorter than the routes being talked about by Ryanair. The company hopes to take advantage of the Open Skies arrangement between the US and the EU to allow for as many as 10-15 destinations on each side of the Atlantic. Most of those routes would not be viable on smaller planes and the 757-200 market is already one where acquiring used aircraft with TATL range is not so easy.

So, what new planes could Ryanair possibly acquire? The carrier has an open order for 200 of Boeing’s 737MAX aircraft but those are the MAX 200s, a layout specifically built to Ryanair’s specifications to offer maximum passenger density on board. These planes would likely have insufficient range – even with some seats removed to lower weight – to serve most of the routes from Continental Europe. Boeing’s only other option to fill the space would seem to be the 787 Dreamliner, a very efficient plane but one with a significant order backlog. It is also possible that Boeing could cut a deal to deliver 20+ 777s to Ryanair in the 2017-2019 timeframe as it transitions to the 777X production line. Those late delivery 777s are not selling particularly well right now otherwise, though a few were just just sold to Swiss and United is rumored to be interested. But the 777 is also a rather larger aircraft and with Ryanair theoretically considering 20-50 airplanes, depending on your source, that would present a massive increase in capacity in the market.

From Airbus the backlog story is similar, at least for the larger planes. Ryanair would struggle to get in on the A350 delivery timetable in the near future (plus the smaller A350-800 is no longer a viable option), but there are other options available. The A321neo 97t model is designed to fit in the same markets where the 757-200s fly today, with slightly higher range and slightly lower capacity in a two-cabin layout. For Ryanair that capacity might increase without a flat-bed premium cabin option, but range could become an issue as well. Further up the size scale the A330neo option could work in favor of Ryanair, with larger capacity and far more range than the carrier needs. It would likely be at least 2018 before those aircraft could be delivered, however. A timeline on the A321neo 97t planes suggests that Ryanair would be looking at 2019-2020 before they could join the fleet.

(Credits: Fabrizio Berni)
(Credits: Fabrizio Berni)

The range issue could be mitigated if Ryanair shifts more to a traditional hub-and-spoke model, something which many airlines do as they mature and grow. But it is not clear that such a move is in the cards at this time. Plus, O’Leary has previously commented on that potential, noting that most of the cities close enough to the US to make that work do not have enough local demand to run; either feed or a broader base in continental Europe is needed.

With no aircraft readily available to fly, especially not in the volume O’Leary has previously suggested would be necessary to scale the operation, this is still very much a theoretical discussion rather than a real market move. Still, there are options available within the timeframe being suggested and this time around the Board of Directors is in on it.