Just How Realistic Is Ryanair's $15 Fare to Europe?

Few prospects are as alluring as the idea of being able to step on a plane and zip off to Europe for 15 bucks—but such a wonder may soon be possible, according to the announcement this week that Ryanair plans to start flying from Europe to major cities in the United States. "The board of Ryanair … have approved the business plans for future growth, including transatlantic," according to a statement from the Ireland-based budget carrier. "European consumers want lower-cost travel to the USA and the same for Americans coming to Europe." The jaw-dropping promise of $15 flights has made nearly as many headlines as the announcement itself. But hold on. Ryanair might bill itself as "Europe's only ultra low cost carrier," but just how likely is it that we Americans will be able to hop across the pond for the price of a movie ticket? According to airline analysts, not very likely. (UPDATE: According to Ryanair, not at all. On March 19, the airline's board decided to "clarify" that the whole plan was high-altitude hyperbole.) "Fifteen dollars makes for a sexy headline, but I expect there will be few seats sold for $15," said Henry Harteveldt, founder and travel industry analyst for Atmosphere Research Group. "That price is the equivalent of clickbait in an online ad. The real fare is going to be significantly higher." Put another way, the super-low fare seems to be another publicity flourish from Ryanair CEO Michael O'Leary, the gadfly of European Union airspace who has promised free tickets in the past and often makes the news over his colorful verbiage. (Example: "If drink sales are falling off, we get the pilots to engineer a bit of turbulence. That usually spikes sales.") So is Ryanair's super-low fare false advertising? No. But there's a catch. Harteveldt believes the Irish airline will follow the usual tactics employed by most budget carriers: Low fares, plus a lot of extra fees. "There will be fuel surcharges, credit card fees, ticking fees and other charges," he said. "So even at the cheapest price, it'll still cost." Ryanair's press office did not immediately respond to Adweek's request for comment. But Bob Mann, a former airline executive and now president of consultancy R.W. Mann & Company, explained just how untenable the economics are for an airline selling $15 seats across the Atlantic. Ryanair's entire fleet consists of Boeing 737s, and "given the fuel flow of the 737-800, a capacity of 160 seats and 6 hours each way, that's 30 gallons per seat per hour each way," he said. "At the current fuel price of $1.70 per gallon, that's a cost of $50 per seat in fuel alone—so $15 isn't going to do it," Mann said. "Plus, the pilots and flight attendants don't work for free, and they'll have to pay other costs." Other costs like, say, a whole new fleet of aircraft for the route. None of Ryanair's existing stable of aircraft is big enough for a 2,800-mile haul across the Atlantic. That'll mean shopping for new planes, another cost that'll be passed onto consumers. Mann speculates that even if Ryanair jacks the fare to $100, flyers will ultimately pay more. "In character with any low-cost carrier," he said, "the fees will be high and hard to avoid. You won't get out for $100 unless you don't eat, don't care where you sit and don't use the lavatory." None of which means Ryanair won't sell any seats at $15. As Harteveldt points out, carriers employ sophisticated software that allows them to promote bargain fares while making sure the balance of seats afford a margin that keeps them flying—and Ryanair will be no different. The bottom line is that $15 is a swell advertising ploy, but that's about it. "There's no way," Harteveldt said, "that the cost will be less than the price of a pastrami sandwich at the Carnegie Deli."

Brand Marketing

Just How Realistic Is Ryanair's $15 Fare to Europe?

Update: Apparently 0% realistic, per the airline's board

Robert Klara

About

Subscriptions

Events

Publications

WORK SMARTER - LEARN, GROW AND BE INSPIRED.

Subscribe today!

Robert Klara