Air Lingus Share anybody intresting in buying 5K worth of shares

jjbrien

I am interested in buying some Aer Lingus Shares as I believe they will be quite profitable. I read last week in an Norwegian newspaper that SAS and some other Airlines are thinking of buying out Aer Lingus after the shares are floated.

I have €5k to use. Is anbody else out there interested in going in op the oppertunity to buy shares as the minium amount you can buy is €10k?

dunkamania

I thought they hadnt realised the flotation price.

How can you have already decided to buy?

jjbrien

there will be a proft out of these guareented. The price that they are sold to the public will be cheaper than the flotation price as the goverment has already said.

Hitchhiker's Guide to...

No such thing as guaranteed profits jjbrien!

But, you can reasonably expect a good gain on these - i'd say they will be priced to give an immediate 7-15% gain.

If it was anymore then the government would be accused of "giving away" the national airline.

If it was any less then the government would be risking some unhappy voters in the run-up to the national election.

When is the flotation planned for?

whizzbang

Eircom anyone?

jjbrien

It wont be like eircom the goverment leartn their lesson. 15% is what I was planning for a return on. Anbody interested?

Sonnenblumen

This will be a flop, just wait and see..

Workers have negotiated an unbelievable deal, c 15% but rising steadily with guarantees on no dilution etc This might gain in very short term literally initial days/weeks post IPO. But medium term this is a bucket of ***** to stay clear of !

Why, most airlines lose money, aer lingus will be no different. The so called successful low cost carriers who apparently make profits but what do shareholders get?? SFA apart from some rising/falling SP's but no divis. AL might pay a small divi but the management and staff have organised the best screw and paid themselves the best divii.

Watch out for the new Alfie Kane's etc. They haven't gone away!

Hey surely there are better ways to make € 500 (post CGT etc) than gambling with AL.

Hitchhiker's Guide to...

Three points:

1. Eircom did return a very good profit for those who bought and then sold within the few days after flotation

2. Dermot Mannion (current CEO Aer Lingus) is no Aflie Kane. He has an excellent pedigree in the airline industry

3. "most airlines lose money". Southwest Airlines in the US has never lost money after its first few years. Aer Lingus has also opened a lot of interesting routes. It is also currently profit-making. The business of Aer Lingus has to be judged based on how it is doing itself - not how some dodgy American and continental european airlines have done.

Sonnenblumen

Roundtower2 wrote:

Three points:

1. Eircom did return a very good profit for those who bought and then sold within the few days after flotation

2. Dermot Mannion (current CEO Aer Lingus) is no Aflie Kane. He has an excellent pedigree in the airline industry

3. "most airlines lose money". Southwest Airlines in the US has never lost money after its first few years. Aer Lingus has also opened a lot of interesting routes. It is also currently profit-making. The business of Aer Lingus has to be judged based on how it is doing itself - not how some dodgy American and continental european airlines have done.

1. Eircom was and continues to be a disaster for all investors except ESOT, who seem to be able to screw not matter who gets into bed with them.
2. Alfie Kane had a great BT career prior to Eircom , I don't know the current CEO of AL, but I wouldn't be too inspired by his readiness to facilitate SIPTU at the expense of other shareholders. The airline industry is full of dogs and few greyhounds. The latter are better for money.
3. Oh yeah! how about AL announcing more trading losses, more redundancies more this more that prior to an IPO. Are you for real? You reference 1 airline doing well, well sure America alone is full of airline cos that went bust! Sorry mate one swallow doesn't mean summer, and AL is no swallow. Why did Willie and the guys leave? Sure some scope but better fish to fry than AL. Good luck anyway.

jjbrien

Ok guys we all you your negitive opionions. If your not interested in buying Air Lingus shares please dont post you negitive comments in this post. I only want to hear from people who might be interested.

Bluehair

Sonnenblumen wrote:

Oh yeah! how about AL announcing more trading losses, more redundancies more this more that prior to an IPO.

Umm what trading losses and what redundancies? Profits have been increasing steadily for the last few years on the back of strong growth, expansion and a solid business plan.

Aer Lingus is currently one of the most profitable airlines in the world, a long way from the airline of a few years ago.

jjbrien

Bluehair wrote:

Umm what trading losses and what redundancies? Profits have been increasing steadily for the last few years on the back of strong growth, expansion and a solid business plan.

Aer Lingus is currently one of the most profitable airlines in the world, a long way from the airline of a few years ago.

Here Here Aer Lingus is profitable and will contiune to be profitable way into the future.

Sarsfield

Sonnenblumen wrote:

1. Eircom was and continues to be a disaster for all investors except ESOT, who seem to be able to screw not matter who gets into bed with them.

I made money out of my Eircom shares so it wasn't a disaster for me.

Airlines are highly cyclical businesses. I'd only hold airline shares as part of a highly diversified portfolio.

Sonnenblumen

Sarsfield wrote:

I made money out of my Eircom shares so it wasn't a disaster for me.

Airlines are highly cyclical businesses. I'd only hold airline shares as part of a highly diversified portfolio.

Hey Sarsfield congrats on making money on Eircom - most didn't, most were in for the long haul but well we all know what happened.

Where do you position/reckon AL are in the cycle?

I would expect a highly diversified portfolio to contain good players from wide ranging industry sectors - but all key players within their respective industries. AL IMO is not a key player but a minnow in a global business that is more than most sectors prone to sudden and dramatic downturns. Sounds like your startegy is hedging against poor AL sentiment rather than the sector.

Might be starting out on the wrong foot and pointing the gun at the other one.

Bluehair

You sublety ignored my challenge to your assertion about "AL announcing more trading losses, more redundancies more this more that prior to an IPO".

There is nothing wrong with investing in a minnow in a global business as you call it. Aer Lingus has already made dramatic changes in its' business plan over the last number of years and become a considerably more lean competitor than the vast majority of other airlines. Investing in the 'key-player' in an industry while it plays a role in a diversified portfolio also typically leaves little room for growth. I'd rather have money in AMD than Intel, Apple than Microsoft and Aer Lingus than Ryanair/BA.

For a variety of ,mainly political, reasons it's likely the airline will be launched underpriced. For anyone who cares to research the company the asset value of Aer Lingus is considerably more than what they're mooting as the launch point.

There isn't a single long-haul carrier with the cost-structure they have in place now and with a roughly 50% split between leased and owned aircraft plus a fuel hedge until next year they are nicely placed to ride out any potential downturn in what is a cyclical market.

They're even better placed to take advantage of an upturn and it's not at all unlikely in the medium term future they will be the subject of a takeover.

For anyone who bothers to delve further than the Sunday Papers they'll see that Aer Lingus is a good prospect for any portfolio.

Sonnenblumen

Bluehair - you're confusing size with value but potential is a different matter altogether. As you can gather I'm no AL fan, they've been a mediocre co for years and when a few good guys started to make changes they get shafted. They've left and I wish WW well. Meanwhile Siptu are the new strategic pilots at AL, and disagree hardly a major long haul carrier, that is stretching it.

But if all this is wrong, why has SIPTU hijacked discussions (here's the similarity with Eircom) and nothing goes ahead without their approval. On the otherhand if AL was really great, why does it need an IPO. It needs cash it cannot generate from current revenue streams. A company that cannot meet its own funding reqs is a bubble waiting to burst. Of course rapid expansion and aqcquisitions require rapoid funding but thats not the case here.

AL is little more than a few valuable Heathrow slots but probably a bunch of fat cats post ipo.

lomb

gauranteed to lose your shirt on them. employees have got way too generous a deal same as eircon.
the only people who win are
1 employees
2 management
3 underwriters

having said that a small gain may be possible on floatation simply because they will be priced to sell. oil price instability isnt a good thing even if it was a good company and an honest offer (which it isnt)

ronbyrne2005

no. why?higher cost base than ryanair,less competitive unions ,govenment 30% stake, oil prices, forecast slow down in world economy in 07/08,rising costs of capital.

RuggieBear

jjbrien wrote:

Ok guys we all you your negitive opionions. If your not interested in buying Air Lingus shares please dont post you negitive comments in this post. I only want to hear from people who might be interested.

tbh...:rolleyes:

Bluehair

Sonnenblumen wrote:

Bluehair - you're confusing size with value but potential is a different matter altogether.

Where from what i've written do you make that assumption? You still haven't backed up the "AL announcing more trading losses, more redundancies more this more that prior to an IPO" accusation.

Sonnenblumen wrote:

disagree hardly a major long haul carrier, that is stretching it.

I said "There isn't a single long-haul carrier with the cost-structure they have in place now". Nothing about being a major there at all. However that cost base enables a growth potential that long-haul competition into Dublin must face.

Sonnenblumen wrote:

But if all this is wrong, why has SIPTU hijacked discussions (here's the similarity with Eircom) and nothing goes ahead without their approval.

Interesting fact, at the most recent Siptu meeting against the IPO twelve staff showed up. The members have zero interest in the , primarily political, motiviations of Siptu. If events over the last few years (wholescale move of Cabin Crew to Impact, overwhelming support and oversubscription of reduncancy packages, overwhelming acceptance of new terms and conditions for the new business model etc. etc.) it shows that Siptu has lost popular support and direction.

Sonnenblumen wrote:

On the otherhand if AL was really great, why does it need an IPO. It needs cash it cannot generate from current revenue streams. A company that cannot meet its own funding reqs is a bubble waiting to burst.

Aer Lingus does not need cash at all and the 'bubble waiting to burst' metaphor undermines your whole arguement. The decision to sell is purely a political one.

Sonnenblumen wrote:

AL is little more than a few valuable Heathrow slots but probably a bunch of fat cats post ipo.

Actually the slots are the least valuable asset Aer Lingus owns due to complications with regard to their disposal due to BAA rulings. They do however own a substantial portion of the fleet not to mention a significant property portfolio on the airport itself (which is already the subject of hotel/shopping mall/metro station planning application).

For a variety of reasons Aer Lingus attracts a huge emotional response from many people when the discussion of its' sale comes up.

The facts however point to it being undersold at IPO with a significant upside going forward due to the underlying fundamentals.

jjbrien

Air Lingus does need cash to revive the transatlantic fleet. The current airbus fleet the A330's are showing their age. I have heard Air Lingus wants to replace them with the new 787 dreamliners as they will be the most fuel effitive aircraft withe the same capasity as their current transatalinc fleet. They also hope to expand the fleet when extra heavy aircraft gates are provided at Dublin.

Bluehair

jjbrien wrote:

Air Lingus does need cash to revive the transatlantic fleet. The current airbus fleet the A330's are showing their age.

Again more mis-information. While the cabins could possibly do with an update the fleet certainly does not require reviving, updating, renewing or changing.

The airbus fleet is amongst the most fuel efficient in the world and as of March 2006 the average age of the aircraft was only 4.4 years. Compare this to;

British Airways 9.7
Continental 8.5
Delta 13.1
United 11.7
Ryanair 2.3
Lufthansa 10.1
Virgin 6.1

The average air of the world airline fleet is 12.3 years.

What Aer Lingus would like is capital to expand the fleet not change it.

jjbrien

Bluehair wrote:

Again more mis-information. While the cabins could possibly do with an update the fleet certainly does not require reviving, updating, renewing or changing.

The airbus fleet is amongst the most fuel efficient in the world and as of March 2006 the average age of the aircraft was only 4.4 years. Compare this to;

British Airways 9.7
Continental 8.5
Delta 13.1
United 11.7
Ryanair 2.3
Lufthansa 10.1
Virgin 6.1

The average air of the world airline fleet is 12.3 years.

What Aer Lingus would like is capital to expand the fleet not change it.

I think your sadly wrong mate. The first 787 has not rolled of production yet so hence the technolgy used on the 787s is 15 years ahead of airbus. You are talking about the short haul flleet only. The current Airbus A330 fleet is much older than that. The first A330 was taken into service in 1994. The avarage age of the current transatlantiv fleet is 9.3 years. See this link for more info So by the time the flleet renewal takes place the avarage age would be 15 years as the current renewal scedule is to have the new aircraft phased in by 2011. i have read in the indo that aer ligus are seriously consdiering the 787's due to thier advanced technology. For more details visit http://www.boeing.com/commercial/787family/background.html

Bluehair

Without getting into an aerosexual debate on the merits of particular aircraft the simple fact is Aer Lingus has neither requirement nor desire to replace any of the fleet immediately (short or long-haul).

In fact they are adding to it with further 330s both this year and next and any speculation as to potential supplementation/replacement with A350/787s is some years away. As any business should they will consider all the available options.

The 330s have plenty of life in them and more importantly are paid for.

The arguement stands, on its' own merits Aer Lingus does not need this floatation but it is an opportunity for the wise investor.

ionapaul

I'm seriously thinking about investing, after making a very nice 10% from Eircom (as did most of my friends - maybe we were all fairly savvy but wasn't it common knowledge that Eircom was a quick-buck deal and not something to sink the family silver into for years? yet to meet any of these people who lost their shirts on Eircom). But again, just like Eircom, it would only be a quick-buck kinda thing - a 'spash and dash' as they say in Formula 1!

Bluehair

ionapaul wrote:

I'm seriously thinking about investing, after making a very nice 10% from Eircom (as did most of my friends - maybe we were all fairly savvy but wasn't it common knowledge that Eircom was a quick-buck deal and not something to sink the family silver into for years? yet to meet any of these people who lost their shirts on Eircom). But again, just like Eircom, it would only be a quick-buck kinda thing - a 'spash and dash' as they say in Formula 1!

Agreed, airline stocks are quite volatile in the long run but when opportunity presents itself...

Sonnenblumen

ionapaul wrote:

I'm seriously thinking about investing, after making a very nice 10% from Eircom (as did most of my friends - maybe we were all fairly savvy but wasn't it common knowledge that Eircom was a quick-buck deal and not something to sink the family silver into for years? yet to meet any of these people who lost their shirts on Eircom). But again, just like Eircom, it would only be a quick-buck kinda thing - a 'spash and dash' as they say in Formula 1!

Well Ionapaul,

Welcome back!

You're almost one in a million, and congratulations to (and your friends) for having the good fortune to make 10% ot of Eircom. Absolutely astonishing to think that after all this time you have still have yet to meet any of the 500,000 Eircom investment victims who lost money (and many continue to do so albeit via Vodafone). Well Jesus, how lucky can you get?

I hope the tide is with you when you dash with the cash! Jolly HO!

ionapaul

Maybe no-one can bear to admit their loss in my presence! Yet through the mists of time I am quite clear that the 'word on the street' at the time, among those of us who had invested before, that the easy money was in the speedy sale of the damn things! Maybe only in the part of Galway city I was based in in those less complicated times!

SouperComputer

is there a timescale for the AL IPO?

jjbrien

Bluehair wrote:

Without getting into an aerosexual debate on the merits of particular aircraft the simple fact is Aer Lingus has neither requirement nor desire to replace any of the fleet immediately (short or long-haul).

In fact they are adding to it with further 330s both this year and next and any speculation as to potential supplementation/replacement with A350/787s is some years away. As any business should they will consider all the available options.

The 330s have plenty of life in them and more importantly are paid for.

The arguement stands, on its' own merits Aer Lingus does not need this floatation but it is an opportunity for the wise investor.

You oviouly have not been watching the news latley or even know how the avation business works. The currennt airbus a330 fleet has started to cause problems for Aer Lingus. They have started breaking down and casuing emmergancy landingd left right and center. There was a big news story 2 months ago of an Aer Lingus A330 having to do an emmergancy landing in Labrador Canada during the very harsh and freezin winter. There has also been many cancelations due to techincal problems with the A330 aircraft. Its actually cheaper for EI in the long term to sell the current A330' and get new onces.

Bluehair

jjbrien wrote:

You oviouly have not been watching the news latley or even know how the avation business works.

Thanks but i keep in touch with the news and am keenly aware of how the industry works. Maintainance related delays do not equate to dumping a €100 million plus on a new plane. It's far from 'cheaper' to sell perfectly good aircraft and buy new ones. It's not uncommon for the majors to extract 14-20 years from their aircraft.

None-the-less it still stands that for those interested the fundamentals of the company point to it being an excellent investment, more likely short-term than long term.

I'll take it even Sonnenblumen has conceeded this point since he's now declined to back up any of his orginal rants.

jjbrien

Im just pointing out hat by the time the fleet renewal project takes place it the current A330's will have an avarage age of 15 years old so it will be time indeed for new 787's or A350. Who knows there could be a better aircraft on the market at the time but as it stands now the newest is the 787 which is the most fuel efficant plane avaible. You may be right that its just qucik cash for the goverment. i dont expect to see a hudge retun on my invertment but i should expect 10% to 15% and as soon as that happens i will pull out.

Hitchhiker's Guide to...

interestingly - there could be a counter-strategy that would work with AL.

People who got stung by Eircom; buying in the hope of immediately selling, causing the stock to fall in the first few weeks.

Might be buying opportunities in the first few weeks as a result.

[or maybe this is just a bit far-fetched]

Hitchhiker's Guide to...

p.s. this is what Dermot Desmond said in an article in the Sunday Independent at the weekend:

If Desmond sees reason to buy; i think that says it all. Can anyone point out the last investment mistake he made? He doesn't throw his money around foolishly.

______________________________________________________________

Dermot Desmond

Dermot Desmond, chairman of International Investment and Underwriting, one of the country's most enterprising investment companies, will be buying the shares.

"I know very little about airlines," he says, "but I take the view that Sean Fitzpatrick [the former chair of Anglo Irish Banks currently on the Aer Lingus board] would not associate himself with failure. If Sean is supporting something, I believe it will be successful.

"I think I will buy the shares - if I get an allocation."

"From an airline that was bankrupt just a few years ago Aer Lingus has made a remarkable recovery. Willie Walsh did an outstanding job and his role should be acknowledged. He set them on the right road with a long-term market segment model which seems to be working.

"There is likely to be continuous growth in the demand for their services in the coming years which offers longer term attractions."

But there was a word of warning from the owner of London City Airport - said to be on the verge of another killing with the sale of the London jewel, which he bought for £23m and is rumoured to be selling for over £400m. "I much prefer airports to airlines."

__________________________________________________________

btw, i'm not personally buying shares because i don't have any spare savings at the moment - so i am impartial on this.

Bluehair

Roundtower2 wrote:

p.s. this is what Dermot Desmond said in an article in the Sunday Independent at the weekend:

If Desmond sees reason to buy; i think that says it all. Can anyone point out the last investment mistake he made? He doesn't throw his money around foolishly.

Even more interestingy was the usual negative sentiment (without much substantion) from a lot of other potential investors.

Everyone knows the gov wants this deal done and since the exchequer is swimming in money and with the eircom disaster still in memory they're going to let it go cheap. The main message from big investors is "we won't touch it unless we get a huge discount". They're in a good position to force this.

Smart money will jump on board early and sell a percentage monthly afterwards to take advantage of growth at the market sets a fair value.

Watch the papers next year screaming blue murder at how Aer Lingus was sold for a fraction of its' true market value and how "so much public money was lost to the fat investors etc."

To be honest the gov can't really win this either way, we can though

RainyDay

I'd recommend that you wait and see what Senator Shane Ross recommends, and then do the exact opposite (given his past track record on recommendations, e.g. hold Eircom, sell Irish Permanent).

Sarsfield

I think Aer Lingus is pretty well run as an airline.

However despite the predictions of massive growth, I see a significant reduction in the aviation business in the long term. Oil prices are not going to return to the ridiculously low levels of previous years. And I expect to see tax on JetA1 sooner or later. Not to mention other environmental taxes & constraints.

The era of taking weekend breaks by air will be a short-lived one. Flying will become a lot more expensive and once again be limited to the rich and the business classes. It won't happen overnight but it will start soon. In fact with fuel surcharges it's starting already.

It may be possible to make money on Aer Lingus but it will take good market timing.

Personally I intend to profit on aviation by doing a lot of flying while it's still affordable!

lomb

why does any airline need to float to renew aircraft? ever heard of leasing?

lomb

Sarsfield wrote:

Personally I intend to profit on aviation by doing a lot of flying while it's still affordable!

even if oil doubled it wouldnt add alot to a ticket imho. its just one of many costs.

Sonderval

Problem with Aer Lingus, as stated, is a problem with the aviation industry in general - fuel prices. When your spending nearly 25% of your cash flow fueling your aircraft, you become precariously placed in the world economy. I don't think anyone needs to be reminded that oil prices are not coming back down.

Welcome the the era of peak oil.

I heard it from other investors that in order to make millions from an airline, you need to be a billionare first. I.e., from riches to rags

In saying that, if your dead set on cashing in, you'll probably make some cash of the IPO within the first 2 months. I would be strongly against holding much longer after that.

And for the love of god, read between the lines of these business people who offer forecasts/advice. From Mr. Desmond's article:


I believe it will be successful.
I think I will buy the shares
He set them on the right road with a long-term market segment model which seems to be working
There is likely to be continuous growth in the demand for their services
I much prefer airports to airlines


No investor can offer absolute advice - when your right 51% of the time, your still wrong 49%. Make your own analysis - do not trust others to make it for you.

joebhoy1916

jjbrien wrote:

I am interested in buying some Aer Lingus Shares as I believe they will be quite profitable. I read last week in an Norwegian newspaper that SAS and some other Airlines are thinking of buying out Aer Lingus after the shares are floated.

I have €5k to use. Is anbody else out there interested in going in op the oppertunity to buy shares as the minium amount you can buy is €10k?

To be honest you might not make alot of money! From what I know you would have to a very large amount of money in to make any kinda decent return! To be honest you wont make much with 5k or even 10k IMO

Cute Hoor

RainyDay wrote:

I'd recommend that you wait and see what Senator Shane Ross recommends, and then do the exact opposite (given his past track record on recommendations, e.g. hold Eircom, sell Irish Permanent).

RainyDay, you have found the secret to successful investing, do the opposite to what the good Senator recommends and you are almost guaranteed to become rich. Advised all & sundry to sell Irish Permanent on the first day at anything you could get over the launch price of £1.60, went up 6 times approx within a year, Eircom as you say, and also got the First Active badly wrong.

rondjon

Roundtower2 wrote:

p.s. this is what Dermot Desmond said in an article in the Sunday Independent at the weekend:

If Desmond sees reason to buy; i think that says it all. Can anyone point out the last investment mistake he made? He doesn't throw his money around foolishly.

______________________________________________________________

Dermot Desmond

Dermot Desmond, chairman of International Investment and Underwriting, one of the country's most enterprising investment companies, will be buying the shares.

"I know very little about airlines," he says, "but I take the view that Sean Fitzpatrick [the former chair of Anglo Irish Banks currently on the Aer Lingus board] would not associate himself with failure. If Sean is supporting something, I believe it will be successful.

"I think I will buy the shares - if I get an allocation."

"From an airline that was bankrupt just a few years ago Aer Lingus has made a remarkable recovery. Willie Walsh did an outstanding job and his role should be acknowledged. He set them on the right road with a long-term market segment model which seems to be working.

"There is likely to be continuous growth in the demand for their services in the coming years which offers longer term attractions."

But there was a word of warning from the owner of London City Airport - said to be on the verge of another killing with the sale of the London jewel, which he bought for £23m and is rumoured to be selling for over £400m. "I much prefer airports to airlines."

Did Mr. Desmond declare the conflict of interest here when making these statements? Aer Lingus is a client of NCB, and NCB have close ties still to their former owner/founder.