Neither Musk nor WiFi would improve Ryanair

At first glance the airline boss who pondered selling standing “seats” on planes to boost profits should be a good fit with the chainsaw-wielding billionaire who declared war on Washington waste. Yet Ryanair boss Michael O’Leary and Elon Musk have come to digital blows over whether Ryanair should offer its customers WiFi via Musk’s Starlink satellite network.

A spat between the two men broke out on Musk’s social network X after Ryanair estimated that Starlink would cost the airline an extra $250mn in fuel owing to the drag from the antennas. Musk suggested O’Leary was wrong; the Irishman then called X a cesspit and the Tesla founder an idiot. Musk polled followers over whether he should buy the $35bn airline.

Ryanair’s shareholders are so far largely unmoved, not least because EU rules require that its airlines are majority owned by EU shareholders, a hurdle South African-born Musk may struggle to clear.The WiFi issue, though, is a live one for airlines, whether they view it as another ancillary revenue generator, a freebie to bolster their premium offering or, more recently, the means to build advertising revenues.

Lufthansa, for example, fits the middle path, announcing this month that it would be installing high-speed broadband via Starlink and making it free for frequent flyers. British Airways, meanwhile, signed with Starlink in November, promising free WiFi for everyone.

United Airlines has chosen the advertising path, with a proprietary media platform that could add an estimated $350mn a year to its revenue by 2028, according to analysts at TD Securities. Instead of allowing an outside agency to handle adverts, the aim is that it can charge more for using its passenger data to produce customised ads.

An airline that knows the frequent flyer in seat 23A never checks baggage might partner with, say, Uber, to offer reservations at their destination, or proffer onboard grocery shopping to the family heading to a holiday rental.

Craving for connectivity tends to grow the longer the flight, weakening the case for onboard WiFi for the shorter trips that Ryanair specialises in. Yet at roughly $1 for every passenger Ryanair carries in a year, the disputed $250mn fuel cost could soon be absorbed — though, of course, that doesn’t include installation, maintenance and operating costs.

The risk for O’Leary, though, is that some rival such as easyJet or Wizz Air rolls out cheap or free WiFi in a bet it will bring in extra business. Perhaps, Musk might offer that rival a special deal on Starlink access if it meant he won the argument and O’Leary was forced to follow suit. That would be cheaper than buying Ryanair outright, but no less cheeky. Though it is hard to know whether anyone wins when cabins are full of YouTube streamers who “forgot” their headphones.

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