Budget long-haul carrier Zoom fired the first salvo in a transatlantic price war last week, announcing the launch of Gatwick-New York flights for £129 one-way in June.
Ryanair chief executive Michael O’Leary followed this by revealing the Irish airline plans a start-up carrier to offer one-way fares between Europe and the US from £7.
That development could be three or more years away.
O’Leary had previously ruled out any attempt to set up a no-frills long-haul airline, but said the open-skies deal between the US and Europe, that will come into force next March, would allow the use of Ryanair’s existing airport network around Europe.
Analysts pointed out the revelation, in an interview with Travel Weekly sister publication Flight International, was timed to coincide with a European Commission ruling on Ryanair’s bid for Irish carrier Aer Lingus, which already operates transatlantic services.
However, the suggestion is being taken seriously, although analysts also questioned whether the carrier couldacquire the 40 to 50 long-haul aircraft O’Leary said it would need.
The headline-grabbing one-way fare of £7 does not include taxes and charges that would add about £130 to the cheapest return fare. O’Leary forecast making £30 per passenger each way on food and entertainment taking even the lowest fares well above £200 return. The twin announcements will nonetheless put pressure on established carriers such as British Airways.
Open skies will allow BMI and others to begin services next year, exerting pressure to cut the business-class fares that currently subsidise some economy prices.
At the same time, economy fare levels will be under pressure from new entrants.
Zoom will offer services five times a week between Gatwick and New York JFK from June 21.
The carrier currently operates from Gatwick, Manchester, Glasgow, Cardiff and Belfast to destinations in Canada.
In addition to the New York route, Zoom has unveiled plans to operate a twice-weekly flight from Gatwick to Bermuda, operating on Mondays and Fridays from June 8 and then on Wednesdays and Sundays from June 23. One-way fares start at $249 inclusive of taxes and charges.
Connecting Bermuda-New York services are promised at a later date to cater for UK clients wanting a stopover.