Ryanair and Aer Lingus to merge???

FlutterinBantam

Micko has thrown in a €1.40 per share cash offer for Aer Lingus.

Early going yet but it could have some legs.

Apparently will mean that the EU will have to look at the legalities in view of recent mergers.

Unions not enthusiastic...surprise.

Run_to_da_hills

A lot of people wont like this

Bluehair

Astonishing cheeky offer bearing in mind Aer Lingus has more cash in the bank than O'Leary is offering for the airline in total. How times change though...

FlutterinBantam

Would appear that Micko reckons that the mind set of Europe has changed in light of other mergers.

Also perhaps the board of Aer Lingus may be more favourably disposed to this opportunity.

Promised to double EI shorthaul fleet from 33 to 66 and create 1000 new jobs.

Should run for a few days at least.

Davidth88

I think as a consumer I am not happy either.

Monopolys do not work, EI/FR would merge then apart from BM/LH how do you get to the UK ?

If this happens watch as the prices to the UK double/treble..........


Not only that I hate FR , and their ' customers are self loading cargo ' attitude.

Fratton Fred

It would give Ryanair Heathrow slots for the first time, I would guess they would have to give a lot of these up if the merger went ahead, they would control a disproportionate amount of the Ireland to london routes. i wonder how this would affect Aer Lingus' oneworld memberhsip as well. I can't imagine BA wanting to codeshare with Ryanair:)

Davidth88

i wonder how this would affect Aer Lingus' oneworld memberhsip as well.

Errrr what One World membership, EI gave that up about 3 years ago because it ' cost too much ' , try using your Gold Circle card to get into a BA lounge and you get laughed at.

They still code share , so if you are on a code shared flight I thing the rights are still there .....

FR would flog the LHR slots , they are EI's biggest asset I imagine, FR would would not pay BAA's charges there.

spadder

I hope Mick gets his way, as a tax payer I know I have/had a vested interest in Aer lingus, but the way Willie Walsh was shafted when he tried to turn it around is sickening. Ryanair will do wonders for toursim from the US if they can pulll this off.

Would Ryanair replace the fleet with Boeings?

Stimpyone

spadder wrote: »

I hope Mick gets his way, as a tax payer I know I have/had a vested interest in Aer lingus, but the way Willie Walsh was shafted when he tried to turn it around is sickening. Ryanair will do wonders for toursim from the US if they can pulll this off.

Would Ryanair replace the fleet with Boeings?

Willie Walsh was caught out trying to play a fast one, stripping the company of everything and then offering to buy it from the government.

He's directly responsible for relative stagnation in Aer Lingus long haul routes, didn't bother his arse investing in new aircraft which the could have afforded because it would have added to the companies value.

Sneaky little **** if you ask me, and he's family too:o

Mr Benevolent

Would Ryanair replace the fleet with Boeings?

Nah, pointless. EI already has Airbus crews, support, maintenance and spare parts. It'd cost far more to change over to Boing. It also ties in with FR's expansion plans - Mick did say he'd be coming into cheap transatlantic aircraft in the new year...

jmayo

Davidth88 wrote: »

I think as a consumer I am not happy either.

Monopolys do not work, EI/FR would merge then apart from BM/LH how do you get to the UK ?

If this happens watch as the prices to the UK double/treble..........


Not only that I hate FR , and their ' customers are self loading cargo ' attitude.

I find it interesting that people see this as a merger.
It is a takeover since FR bigger more powerful airline and they are the ones doing the buying.
EI might try and think they are equal player but they are the little guy here.
FR work on a low fares basis and I can't see them pushing the fares up to the levels EI would once have operated on.
After all it would entice some players onto the route.

IMHO it could also be benefical for at least one of our airports, which could become a transatalantic hub with Ryanair low cost routes linking into it, before transfer to long haul.

I do not have any rosey tinted glasses when i think of EI as I always found them a bit up their own ar** and no great shakes.
They screwed the Irish consumer and taxpayer for long enough.

Run_to_da_hills

Why would O'Leary have any interest in the takeover of a smaller regional airline? :pac:

Fratton Fred

Davidth88 wrote: »

Errrr what One World membership, EI gave that up about 3 years ago because it ' cost too much ' , try using your Gold Circle card to get into a BA lounge and you get laughed at.

They still code share , so if you are on a code shared flight I thing the rights are still there .....

FR would flog the LHR slots , they are EI's biggest asset I imagine, FR would would not pay BAA's charges there.

I stand corrected, I presumed code sharing with BA meant they were still oneworld partners.

I wonder if BA would be interested, they are pretty profitable routes I believe.

Biro

Stimpyone wrote: »

Willie Walsh was caught out trying to play a fast one, stripping the company of everything and then offering to buy it from the government.

He's directly responsible for relative stagnation in Aer Lingus long haul routes, didn't bother his arse investing in new aircraft which the could have afforded because it would have added to the companies value.

Sneaky little **** if you ask me, and he's family too:o

EI prices were at their cheapest when Willie Walsh was in charge. I haven't flown with them since shortly after he left for the simple reason that I can no longer find cheap flights with them. I don't care what he tried to do, he made it affordable to fly with Aer Lingus and now they're expensive again.
I hope Mick takes over EI, keeps them operating under the Aer Lingus name, looses the unionised, cranky, over-paid whinge-bags that work there and operates a good trans-Atlantic service with them. He'll keep the Heathrow slot I reckon, good business out of there. At worst he should lease the slots, not sell them.

robinph

I'd expect him to keep the DUB-LHR slots unless he's forced to drop them as they must be pretty valuable. There must be enough flights into Gatwick and Stanstead that they could drop a couple a day from each of them if they were to be accused of having too many of the Dublin-London routes to get around any competition rules.

Tenger

FR are offering EUR750M for an airline with EUR807M in the bank. How is this viable? It is based purely on the current share price, which itself is a reflection of the unwillingless of investors to buy in due to the large FR holding and the limited liquidity in the remaining shares. So FR have put themselves in a position where they stop any larger airline group buying into EI thus keeping them vunerable.

Fratton Fred wrote: »

It would give Ryanair Heathrow slots for the first time, I would guess they would have to give a lot of these up if the merger went ahead............

Not sure how willing the govt would be to allow FR contraol of these.

spadder wrote: »

I hope Mick gets his way,?

And allow FR to have a vrtual monopoly on Irish airtravel.....we return to the pre FR era of no choice and high fares.

spadder wrote: »

Would Ryanair replace the fleet with Boeings?

Currently FR have too many B737s on order,in fact the recent Boeing strike hasn't hurt FR even though they claim it has. They have crewing issues and are grounding aircraft. Taking over EI would allow them to dispose of the EI A320s,selling some and returning to leaser the other half (unlike FR aircraft, the EI ones can be sold on as is). They could then easily switch them for new B737s. EI only got rid of their last B737 2 years ago(maybe a bit less) Selling or leasing the LHR slots could offset the associated costs off changing the fleet. Obviously this process would take a long time but would allow FR to find a home for those 160 B737 in the pipeline at a time that their expansion is slowing. They could keep the A330 for longhaul,switching to something else in a few years at knockdown price.

andy_g

Confab wrote: »

Mick did say he'd be coming into cheap transatlantic aircraft in the new year...

heard a romour in work about the transatlantic ac we might be getting. but we have been told there not airbus so far but i will keep ya updated as soon as we get told

Captain Chaos

andy_g wrote: »

heard a romour in work about the transatlantic ac we might be getting. but we have been told there not airbus so far but i will keep ya updated as soon as we get told

I'd say the odd are if they do get them, they will be 767s, the newer versions have cockpits that are close to the 737-800s making cross training quicker.

FlutterinBantam

+1 on that I would say

Tenger

Mick has stated no RyanAtlantic until the prices of aircraft drops.....he has also stated that he will retire from FR 'at the end of the decade'. The media seem to think FR will launch T/A ops next year. Mick may very well wait 2 years for prices to drop then swoop in with a large order for widebodies in 2009 for a launch in 2010/11.

I personally think the B767 seems like a likely candidate,its modernised,its cheap,it plentiful,it has the range and payload capacity. B757 too small even for FR subsidary use, B777 too expensive, B787 too late! On the Airbus side the A330 is the only candidate (A350 too expensive and new,A340 line closing) but currently has a long waiting line.

lostinsuperfunk

Anyone who thinks an EI/FR takeover will not result in higher fares all round is living in a fantasy world. What have they, combined 75 % of the Dublin-UK market, and probably around the same between Cork-UK and Cork-Europe?

After the takeover, there would be a huge push to scare off the remaining players, probably via fake giveaway headline fares. Low fares for consumers for months, then the pain would start once the competition retreats: route rationalisations; service downgrades and asset stripping; erosion of working conditions; and huge fare increases. EI/FR would briefly drop the fares if any potential competitor arrived on the scene; based on past experience in Shannon, Knock and Cork with Easyjet, Aer Arann and others, most of them wouldn't bother trying again, and if they did, they'd be unlikely to last long in the face of loss leader fares.

Most of this criticism isn't particular to Ryanair. It is what would happen in any market with a dominant monopoly. Some of us boardsies are old enough to remember Aer Lingus in the 1980s, Telecom Eireann in the 1980s, and er, Eircom in the 2000s.

highlydebased

lostinsuperfunk wrote: »

Anyone who thinks an EI/FR takeover will not result in higher fares all round is living in a fantasy world. What have they, combined 75 % of the Dublin-UK market, and probably around the same between Cork-UK and Cork-Europe?
.

They only operate one European seasonal route from Cork, along with Stansted/Gatwick/Liverpool. Obviously if the merge happened they would have well over 85% of both markets.

They already own 100% of Shannon-UK and 95% Shannon-Europe

Biro

Neon-Circles wrote: »

They only operate one European seasonal route from Cork, along with Stansted/Gatwick/Liverpool. Obviously if the merge happened they would have well over 85% of both markets.

They already own 100% of Shannon-UK and 95% Shannon-Europe

Yep, 100% of the Shannon market and not long ago tickets could be bought for a round trip Shannon to London for the grand total of €12, and that includes taxes, charges and credit card fee. Never saw Aer Lingus offer anything like that when they were there. They still charge the taxes and charges for the Shannon to Dublin flight, which they're not supposed to do.

lostinsuperfunk

Yep, 100% of the Shannon market and not long ago tickets could be bought for a round trip Shannon to London for the grand total of €12,

This is quite interesting and undermines my thesis a bit. The prices for Shannon/Gatwick are still very low despite their near 100% market share. A Fri/Sun return the weekend after next is only €60, and only €90 the weekend before Christmas. To a certain extent they have some competition from Aer Lingus and Aer Arann (Cork/London, Dublin/London and Galway/London) but I find it hard to imagine they are making money out of this.

So why do they stick with it? Are they contractually obliged? Or trying to keep someone else out? I don't fully understand Ryanomics...

Fratton Fred

lostinsuperfunk wrote: »

This is quite interesting and undermines my thesis a bit. The prices for Shannon/Gatwick are still very low despite their near 100% market share. A Fri/Sun return the weekend after next is only €60, and only €90 the weekend before Christmas. To a certain extent they have some competition from Aer Lingus and Aer Arann (Cork/London, Dublin/London and Galway/London) but I find it hard to imagine they are making money out of this.

So why do they stick with it? Are they contractually obliged? Or trying to keep someone else out? I don't fully understand Ryanomics...

They can't exactly pull out of Shannon after the big fuss they made about Aer Lingus doing that. O'Leary would look like a prize muppet.:D

skybus

They still charge the taxes and charges for the Shannon to Dublin flight, which they're not supposed to do.

Biro, you're incorrect with this statement. The only routes as a passenger you shouldn't pay tax on in Ireland are PSO routes. Charges are a seperate issue as each airline imposes different charges. For example a compulsory charge with ryanair is their wheelchair levy, whether used or not. Shannon Dublin is not a PSO route these hence the tax imposed by Aer Lingus on the ticket. Aer Arann don't charge any tax as far as I'm aware on any of their PSO routes including the Kerry Dublin flight when operated by them. It's sad to see Ryanair imposing a tax on this particular flight now that they are operating it under the PSO contract recently awarded to them. Another example of a route is Cork Dublin. This is not a PSO route hence the reason both Ryanair and Aer Arann charge a tax on it whereas the likes of Galway Dublin is null of taxes.

DubDani

I still think Aer Lingus will be bought by Lufthansa in the next 12 months. I know that Lufthansa has been quite keen on them for some time.

They also have the money available (in cash) to make such a purchase very quickly. I believe they were the most profitable Airline in the world last year, when most other airlines were hardly making any profit.

Seems they are adding some Airlines to their portfolio at the moment. Swiss has already been bought, Brussel Airlines has just been bought (50% now and 50% in a few years), the sale of Austrian airlines to LH will probably completed by friday, BMI has also been completely taken over recently.

And as far as I understand they are very close in agreeing the takeover of SAS as well. They might be very keen to get their hands on AL as a gateway to the US, which then could be fed by SAS, Austrian, Swiss, BMI and Brussel Airlines.

murfie

With the new offer again today plus the promises made by ryanair I would love to see them take over Aer Lingus. The say they will recognize the trade unions, not a good thing in my opinion as that's one of aer lingus problems but it may sweeten the deal.
No figure has been stated in the media as far as i can find but being honest i would imagine aer lingus will reject this again.

I don't really get the general opinion here that it would be a bad thing, I for one cannot wait for cheaper transatlantic fares. Hopefully Ryanair will still go ahead with that by the end of the year, even if they don't get Aer Lingus.

highlydebased

lostinsuperfunk wrote: »

This is quite interesting and undermines my thesis a bit. The prices for Shannon/Gatwick are still very low despite their near 100% market share. A Fri/Sun return the weekend after next is only €60, and only €90 the weekend before Christmas. To a certain extent they have some competition from Aer Lingus and Aer Arann (Cork/London, Dublin/London and Galway/London) but I find it hard to imagine they are making money out of this.

So why do they stick with it? Are they contractually obliged? Or trying to keep someone else out? I don't fully understand Ryanomics...

During Winter not so much, but Gatwick is one of Shannon's best performing routes...

Tenger

murfie wrote: »

................... The say they will recognize the trade unions, not a good thing in my opinion as that's one of aer lingus problems but it may sweeten the deal.....

................... I for one cannot wait for cheaper transatlantic fares. Hopefully Ryanair will still go ahead with that by the end of the year..............

The problem isn't the recognising of unions it is the historic stranglehold SIPTU had over EI.

Don't hold your breath for the much touted RyanAtlantic.............it is at least 18 months away. FR will wait till aircraft sales drop so they can get better deals on a big order. FR are keeping it in the media as free advertising.

Biro

skybus wrote: »

Biro, you're incorrect with this statement. The only routes as a passenger you shouldn't pay tax on in Ireland are PSO routes. Charges are a seperate issue as each airline imposes different charges. For example a compulsory charge with ryanair is their wheelchair levy, whether used or not. Shannon Dublin is not a PSO route these hence the tax imposed by Aer Lingus on the ticket. Aer Arann don't charge any tax as far as I'm aware on any of their PSO routes including the Kerry Dublin flight when operated by them. It's sad to see Ryanair imposing a tax on this particular flight now that they are operating it under the PSO contract recently awarded to them. Another example of a route is Cork Dublin. This is not a PSO route hence the reason both Ryanair and Aer Arann charge a tax on it whereas the likes of Galway Dublin is null of taxes.

Cool, thanks. What does PSO stand for? Is that the Government subsidised routes?
Still though, it's a shame that it costs over €50 each way to Dublin when the plane is going anyway. If they offered it at €20 each way I reckon a lot more people would take the opportunity.

highlydebased

Public Service Obligative. Basically a subsidised service which might not otherwise make profit/operate at all

chickenhawk

Anyone see O leary on the late late? Came across brilliantly. I hope this merger goes ahead. More jobs and especially transatlantic!

Foggy43

Yes, I did see him on the Late Late. A very good performance!
He is right when he says Aer Lingus is the airline nobody wants.

opa01_2000

I thought wee Mick seemed to be getting more and more desperate to buy EI - making more and more promises as the days go by. Is there something we don't know?

I, for one, would be desperately unhappy if it went ahead. I have encountered the FR 'service' on numerous occasions - I work regularly in England and it's not pretty.

And for the prices - I was booking 4 return flights to London recently for January, leaving Monday morning and returning Friday evening, and I checked the prices for FR from Derry to Stansted against EI from Belfast to Heathrow. The total costs for FR was £342.49 including one bag and from EI £374.88 again including 1 bag. So a difference of £32.39 for 8 flights and in terms of service a difference of day and night.

I spent 6 months travelling from Derry to Stansted on FR last year and was on time returning on a Friday evening once in that whole time (a fanfare was played over the speakers when we arrived). The price averaged around £120 per week usually booked 6 weeks in advance. This year I've had EI from Belfast to Heathrow for 10 months and had 2 delays (both outside of EI's control). The average price was around £90 again booked 6 weeks in advance.

I realise others will have different experiences but I can only tell mine and believe it would not be good for consumers if there is little competition on these routes.

Ckal

I have a question. If this merger were to go ahead, what does that mean exactly? Would all Aer Lingus planes and slots be re-branded as Ryanair?

I don't understand how Airline mergers work. Sorry.

View Profile

No, as far as I know the Aer Lingus brand name, colour scheme, uniforms etc would all remain.

Ckal

View Profile wrote: »

No, as far as I know the Aer Lingus brand name, colour scheme, uniforms etc would all remain.

Okay, thanks.

Tenger

View Profile wrote: »

No, as far as I know the Aer Lingus brand name, colour scheme, uniforms etc would all remain.

Thats what MoL is saying but you have to take that with a pinch of salt............it would be very easier to turn around in 2-3 years and state that EI are no longer viable as a shorthaul carrier and only use the EI brand on longhaul.

FR have created a company called Coinside to buy EI shares,originally so they could do so covertly. The plan would be for FR and EI to be seperate companies under the umbrella of (for example) 'Irish Airlines Inc'. Thus MoL could state truthfully that they are two seperate airlines.

However what happens to the "legally binding guarantees" if Coinside is declared bankrupt and is liquidated?"




The interview with Mick in the Sindo was fun to read: He twists a lot of facts to make EI look to be worse than it is.

cutting flights

---

EI always cut flights at this time,its called changing to the winter schedule. FR have cut more routes but haven't announced this.
cutting capacity

---

EI deferred delivery of an aircraft next year,so its a temprary capacity cut from 10 to 9 aircraft. FR are grounding planes this winter,EI aren't.
high fares

---

He quotes 2007 fares which are 6% higher than the 2008 fares.
FR will return to the LAX route

---

EI have already booked the crew accomodation in LA from next March 28th.
FR will reinstate SNN-LHR

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EI will look at launching European services from SNN once the negotiate a new landing charges contract. Currently FR pay EUR1 per pax,the EI contract means they pay EUR10 per pax.
EI shares have plummeted to EUR1 ----FR shares have similarly dropped by 60%.
EI are contracting..........they have no expansion plans

---

new A330 and A350 on order.Longer range means more options.Plan is to double the longhaul flight by 2014. While nowhere near the scale of the FR deliveries(15 B737 next year) it is still expansion!
loss making airline

---

in the 10 years 1998-2007 EI make a profit 8 years.

opa01_2000

The Irish Examiner reports that Ryanair is anxious to acquire Aer Lingus because its brand is flagging across Europe.

This is according to the chief executive of Aer Lingus, Dermot Mannion, who said the Aer Lingus brand would be damaged with an association with Ryanair.

Mr Mannion also said he will keep Aer Lingus independent and plans to present a defence strategy against Ryanair’s all-cash bid of €1.40 a share.

He also cast doubt on Ryanair’s plans to restore the Shannon/Heathrow link, saying Ryanair announced it would be cutting routes at Shannon by 75% when the Government introduced the €10 air tax in the budget.

I think this is the reason wee Mick appears so desperate to secure EI. He sees that FR is on a downturn, not just because of the credit crunch but because people are fed up with being ripped off so he's got to find some other way to expand.

As for the myth that FR is cheaper I need to be in London on 30th December, single flight, no bags so I had a look at all options available. Don't really want to go to Stansted as it's too far from where I need to be but I've included it as I don't want to dismiss any alternatives.

From To With? Time Cost
Derry Stansted FR 8.50 - 10.10 £69.33
Derry Luton FR 15.30 - 16.50 £149.33
Belfast City Stansted FR 6.30 - 7.45 £64.55
Belfast City Stansted FR 15.10 - 16.25 £78.55
Knock Stansted FR No flight avail
Knock Luton FR 11.30 - 12.50 € 85.17
Belfast City Heathrow BMI 11.10 - 12.35 £108
Dublin Heathrow BMI 11.10 - 12.35 € 265
Belfast Intl Heathrow EI 12.50 - 2.15 £74.98
Dublin Heathrow EI Lots of choice € 78.98

I have added £4 and €5 for visa charges for FR as I can use Switch with EI and don't need to pay this charge.

So anybody can see the myth of cheap flights just doesn't stand up...

jmayo

Looking at this dispassionately, the only concern I would have of FR taking EI would be that loss of competition on flights out of Ireland.
Apart from that I couldn't give a toss if all the spongers in EI, who have sponged off the Irish taxpayer for donkeys of years, got their marching orders.

But what I would like to know is what assets and positives, apart from LHR slots and possibly operating out of airports with US immigration, have EI got that would make them really attractive to foreign buyers ?
Ps saying EI are know as a friendly airline with good reputation doesn't wash.

Davidth88

JMayo

You know what, you have hit the nail on the head. If Aer Lingus went BANG and changed to Acme Airlines , with the same coverage I wouldn't care less.

Reading the stuff from MOL ( and others ) in the Sindo last weekend was interesting ( although obviously you have to take some bias out ).

I was shocked ( but not surprised ) by the number of political appointees on the board of EI, as MOL said he would take them out and shoot them , but I would wonder what these guys know about running an airline.

I don't think EI have any real ' unique selling point ' , they used to be the friendly/full service airline, but with some of the odd things they do now ( like making you pay for bags ) they have lost that . Their tranatlantic offering is poor to be honest , half the fleet have no IFE to speak of , the service has dropped to US levels ( ie poor ), the only HUGE advantage they have is the INS in Dublin and the INS/Customs in Shannon.

Now saying that I always fly EI , because 90% of my flights are short notice / business / need to connect , EI are the only airline in that case ( FR are hugely expensive if you book 1-2days before the flight and they typicially don't go to airports where you can travel onwards to anywhere ) my main destinations are LHR/LGW/AMS/CDG/FCO/JFK

CDfm

I think its great.

It should unregulate the routes and see lots competition coming in if Aer Rianta handles it correctly.

Alicano

Bramble-Where do u get your info on lax return for ei?
Its my understanding that the lax route is dead in the water just like dxb.
The sfo route is a far better seller than lax.

ian_m

I think it's only a matter of time before it happens. Both of their business plans are virtually mirrored anyway. Having said that I wouldn't like to see it go ahead.