Ryanair Plans $12 Trans-Atlantic Fare

Ryanair Holdings chief executive Michael O'Leary plans to start a discount trans-Atlantic airline, offering fares as low as $12, following the "open skies" accord between the United States and the European Union.

The new airline would fly from Ryanair's existing bases including London Stansted, Dublin and Frankfurt-Hahn, O'Leary said yesterday in a briefing to reporters.

The carrier would go to secondary U.S. airports at destinations including New York, San Francisco, San Diego, Boston, Dallas and Florida.

The agreement to loosen rules on lucrative trans-Atlantic routes will make the new airline possible, O'Leary said.

The carrier would begin flights in three or four years and compete against airlines including British Airways and Virgin Atlantic Airways.

"Ryanair's business model to date has been superb, but this could be a bridge too far," said analyst David Buik of BGC Partners in London. "He may well have to reconsider starting an airline in a market that's already incredibly competitive."

Zoom Airlines, a privately held Canadian carrier controlled by Scottish entrepreneur Hugh Boyle, said yesterday it will introduce low-cost trans-Atlantic travel from June 21 with fares starting at $255.

"We are doing this from June, four years ahead of Ryanair and Mr. O'Leary," said John Boyle, an owner with his brother Hugh. The airline will use a Boeing 767 to fly a daily London-New York service and may increase capacity if the service is successful, he said in an interview yesterday.

Dublin-based Ryanair is now the third-biggest in the world in terms of market value and competes with network carriers on short-haul routes. Ryanair's entry into the European market, as well as that of its biggest discount competitor, EasyJet, triggered a price war among European airlines in the late 1990s.

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