DUBLIN (Reuters) - Ryanair (RYA.I) is in talks with British Airways owner International Airlines Group (ICAG.L) and Aer Lingus AERL.I about providing transfer connections for its rivals’ long-haul services for the first time in its 30-year history, Chief Executive Michael O’Leary told Reuters on Monday.
The move is a major change for how Europe’s largest low-cost carrier operates, which has shunned the interlining market due to the costs involved.
“What we see over the next five, 10 years is that we become a feeder for other long-haul airlines,” O’Leary said in an interview at his office in Dublin.
“The advantage for them is they would get much cheaper short-haul feed than they would from anybody else, but what they have to get themselves mentally over is that they would have to take responsibility for missed connections.”
Connecting passengers will be a “reasonably small part” of Ryanair’s business, O’Leary said, but low-cost carriers could feed up to 50 percent of passengers to long-haul carriers flying from Europe within five to 10 years.
Under the proposed system, customers would buy their tickets from the long-haul carrier, who would be responsible for checking in the customer, handling their bags and taking responsibility for any missed connections.
The cost of compensating people for missed connections is one of the reasons Ryanair has avoided the business in the past.
Ryanair would, however, offer to fly passengers on later flights if the initial Ryanair connection was missed.
Ryanair has not yet finalised an agreement with Aer Lingus, but O’Leary said it could begin providing feeder traffic for its Irish rivals before the end of the year.
“I see no reason why it couldn’t happen this winter, November,” he said.
O’Leary said Ryanair had also spoken to Portugal’s TAP about feeding traffic from Lisbon, and Norwegian Air Shuttle (NWC.OL) and Virgin Atlantic [VA.UL] about flights at London’s Gatwick.
He said he had spoken with IAG “in the context if IAG were to do something long-haul out of (London) Stansted,” a major hub for Ryanair.
A spokeswoman for IAG, which does not currently fly from Stansted, said that the airline had not had any “formal” discussions with Ryanair on the issue.
IAG Chief Executive Willie Walsh last month said that he did not support the building of a new runway at London Heathrow, British Airways’ home hub which is operating at full capacity, due to the costs involved.
Aer Lingus is set to become part of IAG later this year once Ryanair formally signs off on the sale of its 30 percent stake in the Irish carrier.
The decision to possibly link up with long-haul carriers is the latest taboo to be broken by the Irish carrier, which launched a major customer service overhaul two years ago and introduced its first business fare last August.
O’Leary said after 12 months Ryanair was very close to meeting its initial target of 2 percent of all ticket buyers opting for flexible business plus tickets, part of a “conservative” five-year plan to reach 10 percent.
He said it would likely be harder to hit the target of 4 percent after year two, but that the company would step up its marketing efforts after its new web site and mobile app launch later this year.
Additional reporting by Padraic Halpin; Editing by Susan Thomas and Greg Mahlich