In-flight Gambling Under Consideration by Ryanair

Officials with Ryanair, the Irish-based low-fare airline, indicated last week that the company is getting closer to offering in-flight gambling options to its customers.

The move could be another alternative revenue source for the airline that has made money off of its drinks, meals and movies, which typically are offered for free with other full-service airlines.

Ryanair CEO Michael O'Leary said his company was in the development stages of a few different programs that could be used to implement an interactive gambling system that could be accessed once planes are airborne.

O'Leary is confident the system would be able to bypass regulatory control from governments similar to the way cruise companies and other industries can offer services.

"I don't know who would stop you," O'Leary said. "It is like duty free. You are in international waters."

Ryanair is already experimenting with a revolutionary new on-flight entertainment system known as digebox.

O'Leary is confident passengers will take advantage of gambling opportunities, especially for longer flights that can be boring for those on board. The system could integrate both casino style gambling and sports betting, according to O'Leary. The gambling portion would be part of a larger "entertainment" system that could offer pay-per-view movies and other programming.

Although O'Leary wouldn't confirm any possible partners in the deal, media reports in both the UK and Ireland indicated that Ryanair was in talks with Paddy Power, the Dublin-based bookmaker.

The digebox will be tested later this year, according to company officials, with gambling software included in the test. The idea is to allow passengers to gamble by using their credit card, once a flight is in international air space.

Ryanair, according to published reports, placed an order for an additional 5,000 units in preparation of adding the gambling service to its flights.

O'Leary said he envisions profits from the gambling system getting so high that airlines would be able to offer reduced fares for those passengers who are frequent users to the system, thereby giving them an incentive to fly with a particular airline.

He said the commercial potential of the scheme was "enormous."

Another option for the airline could be to offer the interactive gambling service through the already existing screens used to display in-flight movies.

There is no official timetable for getting the gambling system to market but O'Leary said he hopes to see some movement on the front sometime in 2005.

Unlike many European airlines, Ryanair has not added a surcharge to ticket prices this year in order to offset a sharp rise in fuel costs.

Julian Harris of London-based gaming law experts Harris Hagan told BBC News that O'Leary's plan might in principle sound good, but could be difficult for Ryanair to profit from since the airline flies exclusively to short-haul European destinations.

The short flights mean that Ryanair only gets into international airspace briefly for the majority of its flights, offering only sporadic times when passengers could access the system.

"It may be rather difficult to do this sort of thing over land within Europe," he said.

The airline, Europe's biggest low-cost carrier, last week said half-year profits rose by a better than expected 18 percent to 200 million euros. Ryanair flies nearly 27 million passengers annually to 90 destinations around Europe with a fleet of 70 Boeing aircraft.

The company also markets a broad range of ancillary services -- everything from food and beverages to hotel and car rentals -- which last year accounted for 13 percent of total revenues. In its entire history, the company has reported only one quarterly loss, a rare feat for an airline.

In announcing its third quarter results last week O'Leary predicted that fierce competition and rising fuel costs could precipitate a "bloodbath" this winter, and reduced capacity resulting from further airline casualties should only solidify Ryanair's position as the most profitable airline in Europe.

If the airline could add in-flight casino gambling as yet another differentiating factor for the low-fare specialists, O'Leary said, Ryanair could be in a great position to increase its revenue even more.