Skift Take

That the board insisted Ryanair issue a retraction, risking this humiliation, reflects deeper troubles than the mid-Atlantic abyss. That’s us using hyperbole now, but it’s all the rage with the kids these days.

Ryanair may travel across the Atlantic one day. It may not. It’s not sure. It’s pretty sure it won’t.

Unless it does.

This is all we can conclude after Ryanair’s quick and embarrassing retraction of its announcement on Monday that it intended to establish transatlantic, low-cost service within the next five years.

According to confirmation Skift received directly from a Ryanair spokesperson, and other reports, the Ryanair board approved a plan for future transatlantic service. Last evening the airline was forced to issue a new statement effectively saying the board had done no such thing.

“In the light of recent press coverage, the board of Ryanair Holdings Plc wishes to clarify that it has not considered or approved any transatlantic project and does not intend to do so,” the statement said.

Blunder of Blunders

This morning, the Irish Independent quotes boss Michael O’Leary as saying the airline had “f***ed up.”

That might be an understatement. And that sounds like the old O’Leary we knew and loved.

Ryanair has tried to establish a carefully scripted new image since last year. Its success depends on leaving old crass habits behind, but this “miscommunication,” as it is otherwise labelled by O’Leary, reeks of his old-style hyperbole marketing tactics. This leaves Ryanair open to be the butt of jokes at a time when it most needed to be taken seriously.

Was Ryanair planning to offer transatlantic service with no seats for $15.00 — $1,500 with seats — but discovered that even standing up $15.00 across the pond is too cheap?

Did required toilets in the cabin make transatlantic routes cost-prohibitive, because the toilets were likely to be used more often?

Were the long-haul aircraft Ryanair said it was shopping for too expensive, once they put engines on?

Does Ryanair buy off-brand calendars and merely confused St. Patrick’s Day with April Fools?

With the old Ryanair, these types of things were easily shrugged off. “There goes Ryanair again, making jokes while rolling in dough.”

It was a strategy, of sorts. It got Ryanair plenty of attention and it set a tone which fit its former “I could care less what you think, I do it my way” image.

But the airline changed this tune because that strategy wasn’t going to take it to the next level. Ryanair wanted to be taken seriously. It learned from soaring rival easyJet that it needed to attract a better, more profitable clientele: the business traveler.

Business Is No Joke

As our Grant K. Martin wrote, “no business traveler in his right mind would ever fly on Ryanair if given the choice.” That is the perception of its brand that Ryanair needed to reverse.

Plans announced for a second-brand, two-class carrier seemed aligned with other announcements that would take the airline in that direction, and they also supported transatlantic ambitions.

Indeed, even with this flip-flop, Ryanair has not said that it absolutely positively won’t fly transatlantic. Only that Ryanair won’t fly transatlantic, leaving the possibility open for a second-brand carrier.

“Now it is understood that while Ryanair still intends to launch a transatlantic service, it will not do so using its own name,” the Irish Independent reports. “Instead, a separate company will have to be set up as a standalone business.”

It won’t matter. This resurfacing of the old Ryanair is likely to make serious market watchers question whether Ryanair or “Other-Brand” Ryanair is serious, even if they placed the order for long-haul aircraft tomorrow, proper engines and all.

This breakdown shakes investor confidence in the company’s ability to control its own story. “Financial analysts described the blunder as a serious misstep for the airline,” reports the Independent.

The Boy Who Cried Transatlantic

All of Ryanair’s recent announcements can now be called into question. It’s difficult to take any announced growth plans or plans to turn-around the brand seriously. That damage can have a lasting effect.

Awkward as this all might be for Ryanair, it’s good news for Norwegian. The airline may be embattled with U.S. carriers over Open Skies disputes because of the Dublin location of its Norwegian Air International, but it has a firm business plan in place, it is already serving U.S. cities and it has real Dreamliners in its fleet, with comfortable seats.

Norwegian appeals both to budget-savvy business and leisure travellers. It has to overcome issues with opponent resistance, flight frequencies, and labor disputes, but, whether or not it ultimately succeeds, for now its focus is on addressing these matters. Norwegian has more Dreamliners on order, which, if nothing else, reflects a commitment to its plans.

These are the type of aircraft which Ryanair or “Other Brand” Ryanair might hope to have one day, if the company figures out what it is and what it isn’t all about. Neither Boeing or Airbus should be setting aside capacity for that at this juncture.

What Lies Beneath

The real question is why the Ryanair board insisted on a retraction “it has not considered or approved any transatlantic project and does not intend to do so,” rather than allowing a clarification that any transatlantic service would be flown by a separate airline brand. Perhaps there is no “Other-Brand” Ryanair in the works and never will be.

We’ve reached out to Ryanair for comment and have not yet heard back. We’ll update if we do, and include a shaker of salt.

UPDATE: We have now received a reply to the request for comment we made of the Ryanair communications team, but the reply unexpectedly came from a representative of the public relations firm Edelman. We were informed that the article published in the Financial Times yesterday (paywall) reflects Ryanair’s position on the matter and that “the comments in the FT article are accurate.”

In the FT article, O’Leary expresses surprise that the story of the airline’s transatlantic plans had “such legs.” He also attributes the delay in the retracting the story to no one being around because of the St. Patrick’s day holiday, adding that he had been travelling on Wednesday and Thursday so the matter did not come up until the Thursday board meeting.

This curious yarn is belied by the fact that Skift received the statement from its own official sources at the Irish LCC on Tuesday the 17th, with warm wishes for the holiday to boot. It’s also difficult to imagine that a man as media savvy as O’Leary could think that the story of the most controversial of controversial airlines planning to fly across the Atlantic would sit quietly by as we all sipped green beer.

While the official spokespersons are evidently now enjoying extended St. Patrick’s day vacations, with Edelman stepping in to cover, a source close to the company indicates: “The statement unfortunately referred to transatlantic plans. Ryanair has always said that any transatlantic project will be a separate company, with a separate business model and separate branding.”

There you go. [The salt mill is passed around the table.]



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Tags: low-cost carriers, ryanair

Photo credit: Ryanair Chief Executive Michael O'Leary gestures during a signing ceremony. Pascal Rossignol / Reuters

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