Ryanair’s €10 flights to the US would assist property markets

Ryanair's €10 flights to the US would assist property markets

Ryanair’s €10 flights to the US would assist property markets

If there is one man in the aviation industry that attracts controversy and headlines everywhere he goes it has to be Ryanair’s chief executive officer Michael O’Leary. This is a man who has gone out on a limb on numerous occasions to introduce new services, comment upon government policies and we must not forget, is in charge of a leading budget airline. The potential introduction of a €10 one-way flight to the US seems bizarre and “way out” but if you dig beneath the surface it is something which could certainly happen in the medium to long term.

While many people are of the opinion they will take the proposal seriously when the company has placed orders for additional long-haul jets it is an intriguing development which has caught the attention of property developers around the world.

What is Ryanair proposing?

The company is proposing to fly to 14 destinations in the US, including New York and Boston, from 14 major cities across Europe. The €10 tickets would cost the equivalent of $10.09 for a return journey from the US and many people will wonder how these figures actually add up?

Quote from PropertyForum.com : “Despite the fact there is still some concern about the short to medium term direction the US economy, it seems that investors cannot get enough of Florida real estate with February seeing an increase in activity and prices.”

You could argue that this is something of a marketing/public relations masterstroke by Ryanair because effectively the €10 would be subsidised by business travellers paying full price. The company is also suggesting that those taking advantage of the €10 tickets would need to pay for a range of services which are free at this moment in time. The reality is that they €10 would probably cost significantly more when taking into account luggage, food, etc although it would still reflect well against the traditional transatlantic flight costs.

Would this impact the US property market?

A number of property developers and property dealers in Florida have already commented upon the plans by Ryanair. While many of them are cautious that the company will never be able to put this service into operation they acknowledge that if successful it could potentially have a major impact upon the Florida property market. This is an area of the world which attracts international property investors for an array of different reasons and the opportunity to fly to the US from major European cities would assist in choosing the correct real estate investment.

There are obviously an array of regulations and rules in the US covering international investors although in theory this could be a great move for not only the US real estate market but also European real estate investors. Could this also work two ways?

Would this increase US investment in the European real estate market?

While much of the focus today has been upon the impact on US property markets, there is no doubt that many US investors see good value in European real estate looking long-term. The opportunity to fly to Europe for what would effectively be a pittance compared to traditional transatlantic flight costs could well attract many international investors to Europe. At this moment in time the general European real estate market is depressed, some areas are friendless and many believe it will take years to recover from the near crash of the euro. However, a strong and long-term injection of new investment funding could make a difference?

One Response to “Ryanair’s €10 flights to the US would assist property markets”

  1. S Holmes

    This rubbish about 10 Euro (or pounds, or dollars) transatlantic flights comes from O’Leary at irregular intervals.
    He also states that he needs to acquire the right aircraft for these ultra-cheap transatlantic flights, but that may take some time, because in reality he needs aircraft which don’t consume fuel.

    The fuel cost to fly a passenger across the Atlantic:
    Distance from e.g. London to New York: 5587 km.
    Fuel consumption per passenger-km in an A380 super-jumbo: 0.03 liter per passenger-km (source Airbus).
    Jet fuel cost: 3.0 USD per US gallon (source IATA), i.e. 0.775 USD per liter.
    This yields a fuel cost of 130 USD to fly one passenger from London to N.Y., equivalently 94 EUR or 77.5 £.

    So O’Leary proposes to fly passengers across the Atlantic for a ticket price which covers only a tenth of the fuel cost; He will have to use imaginary aircraft or steal the fuel.
    Of course, Ryanair may give away two tickets per flight for free (so may any airline), but that cost will have to be carried by the other passengers.


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