After a year spent cozying up to customers, Ryanair Holdings Plc boss Michael O’Leary is extending his goodwill in an entirely new direction: the competition.
The outspoken chief executive officer of Europe’s biggest discount airline is offering to feed connecting traffic to long-haul rivals and suggesting industrywide online fare comparisons to ward off outside ticket providers. Dublin-based Ryanair also became a founding member in June of a pan-European aviation lobby group alongside EasyJet Plc, Lufthansa, Air France-KLM Group and British Airways owner IAG. The olive branch comes as Ryanair looks to fly 180 million passengers a year by 2024, 75 million more than now.
“Competitors are somewhat suspicious of my uniquely nice and giving nature,” O’Leary told journalists in London on Monday. “I hope to overcome their fears and suspicions in the next 6 to 12 months.”
Ryanair has sought to refine its no-frills image by improving its website, adding service at European cities’ main airports rather than secondary airfields and offering a range of paid-for extras to entice more business passengers and families. Changes planned for the winter period include restyled crew uniforms and subtler Sky interiors from planemaker Boeing Co. for the 28 single-aisle 737 jetliners due to join the fleet by the end of March.
With Ryanair connecting to more primary hubs and offering more frequent flights, allying with long-haul network airlines like Air France-KLM Group and Deutsche Lufthansa AG to handle transfer passengers makes sense, O’Leary said in an interview.
“It’s something we would have said we’d never ever do, but what I’m trying to do is to prompt mainly the legacy carriers to focus on how they deal with their short-haul business,” he said. “It’s more a medium-term thing, to encourage the legacy carriers to be more radical with their own restructuring. It’s not going to be a huge upside for the short-haul guys like us.”
O’Leary made his comments as Lufthansa was inaugurating its Eurowings discount brand’s first long-haul route, which links Cologne, Germany, with Varadero, Cuba. Karl Ulrich Garnadt, head of Lufthansa’s low-cost operations, said the division may arrange partnerships with outside companies, without specifying whether that would include sharing services or making investments.
Lufthansa’s efforts to build up Eurowings and a similar low-cost strategy at Paris-based Air France-KLM have met resistance from labor leaders. O’Leary said a deal with Ryanair may help them thwart unions’ opposition.
“One of the obvious ways for Lufthansa or Air France to deal with their unions is to say, ‘look, let’s reach an agreement on reform or we’re going to do a deal with a Ryanair or an EasyJet to do 20 percent of our short-haul flying’ and throw them all out,” O’Leary said.
Ryanair said Monday that full-year earnings will probably be at the top end of its forecast range, though average fares are likely to fall by about 4 percent. Second-quarter profit after tax, excluding gains, jumped 41 percent to 843 million euros ($930 million).
–With assistance from Richard Weiss in Cologne and Benjamin Katz in London.
This article was written by Kari Lundgren from Bloomberg and was legally licensed through the NewsCred publisher network.