August 30, 2006 – EUROPEAN low-cost carrier Ryanair announced in London today that it would begin implementation of the OnAir onboard cellphone service across its whole fleet from July next year.

“This is a win-win for Ryanair, OnAir and most importantly our customers,” said Ryanair CEO Michael O’Leary. “The revenues generated will reduce our costs and help us to double the size of our operation over the next five years as we grow to carry 80 million passengers annually by 2012. And we’ll be encouraging them all to text or phone Mammy or Granny to say they’ll be home soon!”

Installation of the OnAir system on an initial 50 Ryanair Boeing 737-800s will begin in July, with the remainder of the fleet to be completed in 2008. The service will be launched the same month, starting with aircraft based at London Stansted. “40 per cent of our traffic from Stansted is business travellers,” O’Leary said. “It also makes sense to focus the first installations on one location instead of diluting the impact of the service by fitting one or two aircraft at a time at each of our bases.”

Ryanair looks likely to be the first airline to offer Europe-wide inflight mobile telephony across its entire fleet. “We’re the first to announce a plan to fit an entire fleet with this kind of system, and we’ll equip our aircraft as fast as OnAir can deliver,” said O’Leary. “I would be amazed if any other airline fitted out its whole fleet before us.” Ultimately the service could be offered in 200+ aircraft and on all Ryanair flights across a network of more than 360 routes serving 23 countries in Europe.

Passengers using the service will pay standard mobile-phone international roaming rates, with no additional charges. Ryanair will receive a commission on a sliding scale, with its percentage increasing with the volume of traffic. “Our basic commission is a very small and ungenerous figure,” joked the quick-fire O’Leary. “I will be encouraging OnAir CEO George Cooper to increase it.”

OnAir will supply the onboard picocell and other hardware elements to Ryanair, which will be responsible for installation and subsequent maintenance. “We are paying OnAir a significant sum of money for these systems,” O’Leary commented. “We’re looking at the possibility of sponsorship deals with, say, telecoms providers to help us defray the cost.”

Characteristically, Ryanair plans to do its utmost to make the investment pay off. “We will aggressively promote onboard phone usage from the start,” said O’Leary. “We have in development a range of products designed to encourage usage and we will detail them closer to launch. We also see this hardware as the gateway to a future gambling product – the mobile phone link could be used for online payments – and inflight entertainment.”

Airline and supplier were tight-lipped about the financial details of the contract. But O’Leary believes that Ryanair could begin to see a benefit as early as 2009: “It depends on passenger uptake - if there’s a decent level of usage we could be in profit within a couple of years.”

Ryanair has a history of leading the low-cost field when it comes to service innovations, though not always with a positive outcome. OnAir will have in mind the carrier’s trial adoption of handheld IFE - and its prompt rejection when it proved impractical on Ryanair’s typically short flight segments.

O’Leary made it clear that onboard cellphone would be subject to the same hard scrutiny. “The early installations will certainly be treated as a trial to see how well the product works commercially, and we would withdraw it if people didn’t use it,” he said. “But I do believe every airline is going to have this capability in fairly short order – passengers everywhere will come to expect it as standard.”

The Ryanair chief was briskly dismissive of the “social issues” worries being voiced in North America. “There has been a lot of old nonsense talked about the potential for agitation in the cabin as a result of loud cellphone conversations,” he said. “But it hasn’t happened in airport terminals, in trains or anywhere else, and I don’t expect to see it in aircraft. Besides, I see most of our usage coming from text messaging.”

Ryanair’s adoption of OnAir is another piece of good news for Inmarsat, provider of the satellite air-to-ground link. Earlier this week the London-based company learned that Qantas planned to trial the onboard cellphone service being developed by OnAir rival AeroMobile, which also uses Inmarsat air-to-ground capacity.