Across the Pond for Ten Pounds

Brian Hicks

Updated April 18, 2007

No matter how many foreign films you watch or how many hip bistros you eat at, there is no substitute for traveling abroad. Now, with recent breakthroughs in aviation liberalization, low-cost and long-haul carriers may get you up and away more easily than ever.

The term "open skies" means just what it sounds like. As important as tariffs and other trade barriers have been to global economic interaction, too often the organizations and negotiators who insist on free commerce have been loath to lower obstacles to intercontinental travel. Sure, you could stow away on a freighter filled with openly traded wares, but wouldn’t you prefer a 20-dollar flight?

In late March, the European Union approved a roster of moves that would bypass bilateral restrictions on air traffic that limited the number of routes allowed between the US and European countries. Pending congressional approval on this side of the Atlantic, European airlines would be allowed to fly to the States from anywhere within the EU’s 27 member states.

Americans like me who are already familiar with European low-cost carriers come back home weeping when they realize how exorbitant domestic travel is by comparison. I took a budget, round-trip flight from London’s Stansted airport to Riga, Latvia, for around 80 dollars last spring. Dublin-based Ryanair offers international flights from 1 cent (a true penny) one-way from London to Seville, Spain.

Surely, there is a catch, right? Well, yes–the taxes and fees are said not to exceed 25 British pounds, which as of this week is exactly equivalent to 50 dollars, and you are charged for your baggage while being expected to overpay for an on-board snack.

As the open skies initiative goes from pie-in-the-sky dream to foot-on-the-ground reality, Ryanair is plotting a course for cheapo flights across the pond. Chief executive Michael O’Leary said last week in an interview with industry periodical Flight International that Ryanair would branch out from its status as Europe’s largest low-fare airline by spinning off a sister airline to fly to the U.S.

Zoom Airlines, a diminutive Canadian company, said just a day before O’Leary’s musings that it would start an economy service between London and New York this June in light of the open skies development. According to the Financial Times, Malaysia and Germany may soon host such carriers as well, but the race for the bottom (which is not necessarily a nose dive) does not figure to involve EasyJet, Ryanair’s primary competitor in Europe.

And in terms of rock-bottom prices, there is a sort of inverse market developing for business-only travel. Midwest Express, a US airline, created its reputation for relaxation by buying standard commercial airliners and fitting them with far fewer seats than usual. Warm cookies add to the comfort, and such an idea could translate well to intercontinental flights, which are grueling for many. If you have the dough, Eos Airlines, Maxjet, and Silverjet are a few carriers just getting off the ground by offering only business-class seats, though you may not get warm cookies.

Naysayers to the Ryanair idea are busy citing poor precedents, including PEOPLExpress and Skytrain in the 1970s and 1980s. Those UK-based carriers were, importantly, operating in the era of a weak pound and long before the recent open skies breakthrough.

And any currency trader, globetrotter or no, will tell you how prominent the pound is in the calculation UK-based travelers will make when considering six-hour jaunts to New York (or some peripheral destination, as Ryanair generally uses secondary airports).

Early this week, the sterling broke its resistance on foreign currency markets, hitting the 2-dollar mark and reaching its highest levels in a decade and a half.

Strength in the pound meant shopping frenzies for many Britons during the 2006 Christmas season, as they enjoyed substantial markdowns on iPods and such. These prices were reasonable enough after the relative deflation of their currency to balance the cost of travel to the US.

Just imagine if the pound maintains its might until and past the three- or four-year goal Ryanair’s O’Leary has set.

"By mid-2009, we will be carrying 70 million passengers at 23 bases across Europe," O’Leary told Flight International. "It will be relatively straightforward for us to do a deal for 40 to 50 long-haul aircraft and connect these bases transatlantically."

So it seems the sky is falling, bringing international travel down to earth for many world citizens.

Kind Regards,


Sam Hopkins

Angel Publishing Investor Club Discord - Chat Now

Brian Hicks Premium