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A momentous aviation deal agreed this week willhave far-reaching consequences for transatlantictravel - but will it make flying to the Statesany cheaper? MYLES McWEENEY reports
Feel like going to America? In the near future, thanks to an important recent agreement on an 'Open Skies' policy between the US and Europe, transatlantic flights should be a lot easier to arrange.
But will liberalisation lead to no-frill, Ryanair-style price wars over the Atlantic? Will you get the equivalent of €9.99 one-way fare offers? The considered opinion is: not likely. However, Mary McKenna, founder and managing director of TourAmerica, believes that Open Skies is going to be brilliant for the customer.
"All the airlines flying the Atlantic will be forced to compete with each other and there will definitely be a price war," she says. "America is going to be a very cheap destination, with low fares there and back, and the dollar at €1.31 against the euro."
But some industry insiders feel that more routes, capacity and potential passengers across the Atlantic won't necessarily mean sharper pricing and cheaper seats.
Frank Kelly, managing director of CanAmerica, says, "I just can't see a price war breaking out. Some price stabilisation, perhaps, a levelling-off of fares, if you like. Any new airlines flying into Ireland will want to make money and they won't do that if they're cutting each other's throats."
And one source contends that the competition on existing routes to America is already pretty intense.
"Aer Lingus and Continental operate two flights a day in each direction to the east coast. Delta and US Airways both have flights, and American Airlines and Aer Lingus go head to head on the Chicago route. Prices are probably as low as they'll go."
Indeed, relatively no-frill fares, seating and service are already here. Currently, you can book a return flight to New York on the Aer Lingus website for as little as €430 (including taxes).
And budget airline comfort already operates on transatlantic routes. Economy class leg-room is tight, with Continental's seat pitch the lowest at 31 inches, while Aer Lingus and Delta offer 32 inches. (As a comparison, Ryanair offers just 30 inches).
The days of free alcoholic beverages on transatlantic flights are long gone, and the food is often very basic, perhaps just a sandwich.
All of this relates to what happened on March 2, when European and American negotiators finally reached agreement on a very important issue. Should it be approved by the EU Council of Ministers on March 22, it will provide a more harmonised regulatory framework for promoting a free trade area for air transport between the 27 countries of the EU and the United States. Beginning in the 2007/'08 winter season, it will enable European and American operators to access any markets between the EU and US.
Finally, the long-running political wrangling is nearing its end, and airlines like Aer Lingus will soon be able to fly to virtually any
American city they wish. If this becomes a reality, one travel industry source suggests, the skies over the north Atlantic may rapidly become crowded.
"In the past Aer Lingus suggested that it might consider opening up as many as 15 different routes to North America. On top of the wish list is another Californian destination (the airline already flies into Los Angeles). San Francisco has been mentioned, and so has San Diego, with San Jose the dark horse."
Miami is also a prime target as it would open up a lucrative market to South America, particularly Brazil and its sandy beaches. Orlando and its theme parks is another Florida possibility. The airline would also like to target Philadelphia, which has the highest Irish- American population of any US city, and open up the Canadian market with flights to Toronto. In the third tier of American routes would be cities like Las Vegas, New Orleans and Denver.
"The airline has two new Airbus aircraft being delivered next month, and they have to have somewhere to deploy them. When the order was put in some years ago, Aer Lingus management almost certainly thought the whole Open Skies deal would be done and dusted by now," the source says. "It has also expressed ambitions to fly beyond Dubai in the Middle East, to prime holiday destinations like Capetown, Bangkok, Singapore and Hong Kong."
For years Aer Lingus' hands have been tied to a large extent. For instance, while an American airline like US Airways can fly from Philadelphia direct to Dublin, the current regulations prevent Aer Lingus competing on the route. The Irish airline is limited to operating flights from Ireland to Los Angeles, Chicago, New York and Boston.
In 2004 Aer Lingus announced a three-times- a-week charter service between Ireland and Florida's Sanford International Airport, 18 miles north-east of Orlando. The €368 round trip service, on a 275-seat A330-200 aircraft, was to run on Tuesdays, Thursdays and Saturdays from early December to May. After a year Aer Lingus was told that the service was an effort to bend the rules too far and they had to pull out of the route.
The thinking within the trade is that the change will be a big boost to Aer Lingus' fortunes. "I think Irish people have a great affinity with the airline, despite its recent troubles," one insider says. "If they launch a route to Denver or Orlando, Irish people will probably book it because they know the company, and don't have the knowledge to make a comparison between Delta or Continental or other American airlines that will offer such destinations."
Mary McKenna, too, believes that Aer Lingus' positive image and peerless safety record will be a huge boost to the airline under an Open Skies situation. "American people will fly Aer Lingus to Ireland because it is an Irish airline, is safe and is not terrorist targeted. They should do very well."
Mary also feels that Ryanair is a likely entrant to the transatlantic market. "I would put money on it," she says. "I think Michael O'Leary is probably eyeing a few routes already. It makes sense - they run such a good operation, they are cost-conscious and Michael O'Leary's model works. There is going to be a lot of competition on the Atlantic routes, and competition is good for the customer."
The current high transatlantic airfares are, to a large extent, due to fuel surcharges and other charges such as landing fees and passenger taxes. According to Mr Kelly, Irish holidaymakers wishing to escape to winter sun and fly Dublin/London/Miami on an airline like Virgin or British Airways will pay charges of up to €220 on top of the basic airfare. That's a hefty slice of the €584 fare British Airways would charge you, and a third of Virgin Atlantic's €689 ticket. (Source: ebookers.ie for travel next Tuesday, March 13, returning a week later.)
He suggests that American carriers looking at flying into Ireland after liberalisation, from cities with large ethnic Irish populations such as New Orleans, Denver and San Francisco, may not want to operate year-round schedules. And he doesn't believe that an Open Skies policy will sound the death knell for Shannon Airport, as some have suggested. In fact, both he and Mary McKenna believe Shannon has a bright future, with the majority of its traffic concentrated on the spring to early autumn period.
"There's a lot of seasonality on the route," Mr Kelly says. "US Airways, for example, only fly into Ireland May through October, and Air Canada flies June through October only. Shannon has been preparing for this for years. It was inevitable it was going to happen."
And Dublin could become a major European hub for Aer Lingus. They can ticket people in cities in America direct to Dublin, and onwards to dozens of cities in Europe, and even Dubai.
"Aer Lingus has a very good image in the States, and virtually all the 40 million-plus Irish-Americans identify with it," says Mr Kelly. "If they're considering flying to Europe many will think, 'Why not fly Aer Lingus? It's got a big European route network'. That's a powerful marketing tool."
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Irish Independent - MYLES McWEENEY