Ryanair bid for Aer Lingus

bmaxi

Judging by the language it would appear the Government are preparing to sell off their stake in Aer Lingus to Ryanair, the proviso being "if it's in the best interests of the taxpayer". As successive governments have proven unwilling or incapable of acting in the best interests of the taxpayer, I'd be interested to know how many people think allowing Ryanair a virtual monopoly of the air routes off this island, in exchange for a bypass or two, would be in their best interests, I certainly don't.
Not interested in Ryanair bashing, just realistic opinion.

ballooba

How many routes do BMI/BA/Cityjet have out of Dublin?

n97 mini

What is the govt's share holding worth now, versus when Aer Lingus was first floated?

LXFlyer

BA (what was bmi): Heathrow
Cityjet / Air France: Paris CDG, Pau (Seasonal) and London City

Jamie2k9

Ryanair take over Aer Lingus will not happen ever and as far as I know FR can not make a fourth offer as it would be breaking the law.

It would be very bad for Irish people and would realy damage Dublin Airport future.

ballooba

lxflyer wrote: »

BA (what was bmi): Heathrow
Cityjet / Air France: Paris CDG, Pau (Seasonal) and London City

I meant to say flights, but thanks. The ideal situation would be for Aer Lingus to go to a more up market airline.

LXFlyer

BA - 5-6 flights per day, AF 5-6 flights per day to LCY and the same to CDG.

L1011

EU blocked it when they controlled far less (combined) of Irish traffic; EU will block it again.

O'Leary is just trying to drive the share price up to sell his stake to someone else.

bmaxi

MYOB wrote: »

EU blocked it when they controlled far less (combined) of Irish traffic; EU will block it again.

O'Leary is just trying to drive the share price up to sell his stake to someone else.

Listening to some commentators, EU blocking of a deal is not a given this time. If O'Leary is bluffing he's taking a very expensive chance.

howiya

Don't forget that in this instance the Troika, of which the EU are a part, want the Government to sell its stake. Would they be fussy who bought it?

Are there any other realistic buyers out there at the moment or is selling to Ryanair the only option in the short to medium term?

n97 mini

The govt should sell their share in AL, as the share price, like AL, is slowing going down the plug hole. Typical Irish govt: pander to vested interests, incl the MOL haters. Sell it now, to anyone, and maximise the little return there is left on it.

M three

Jamie2k9 wrote: »

Ryanair take over Aer Lingus will not happen ever and as far as I know FR can not make a fourth offer as it would be breaking the law.

It would be very bad for Irish people and would realy damage Dublin Airport future.

Ryanair has been good for Dublin airport and will continue to be.
I know Aer Lingus isnt solely state owned anymore but it is still very inefficient and bloated compared to Ryanair

Funny how Aer Lingus supporters didnt mind when Aer Lingus had a total monopoly but now think Ryanair taking over Aer Lingus will be the worst thing ever

LLU

M three wrote: »

Ryanair has been good for Dublin airport and will continue to be.
I know Aer Lingus isnt solely state owned anymore but it is still very inefficient and bloated compared to Ryanair

Funny how Aer Lingus supporters didnt mind when Aer Lingus had a total monopoly but now think Ryanair taking over Aer Lingus will be the worst thing ever

Funny also how so many people seem to mistake Ryanair for Robin Hood.

But they're in the business of getting as much money as they can, not taking it from the rich and giving it to the poor. And occasionally we're reminded of this when our soccer team qualifies for some playoff or other and overnight Ryanair shoots up the fare to that venues.

Fine. That's supply and demand. And the likes of Aer Lingus and other competitors serve to balance that equation.

Do people seriously believe that if Ryanair are in control of Aer Lingus and in almost competitor-free environment they're suddenly going to start loving the customers and giving them even cheaper prices and better service? Why would they?

bk

Ryanair taking over AerLingus would be a disaster for the Irish travelling public.

Don't get me wrong, I really like Ryanair and use them multiple times a year, I love the way they broke AerLingus's monopoly and made flying cheap and affordable.

But don't kid yourself, Ryanair isn't a charity, hand them a monopoly and prices will shut up. It isn't just to London either, but the likes of Manchester, Barcelona, Poland, etc. All places where both AerLingus and Ryanair currently fly and where AerLingus does help to keep Ryanair honest and cheap. But if AerLingus get bought, you can bet that overnight Ryanair will cancel the AerLingus flights to these places and increase their own prices significantly.

Bad, bad news.

ballooba

If Ryanair have a monopoly and prices shoot up as people claim? Then what stops other airlines entering the market to take advantage of the high fares? Or BA/Cityjet increasing their number of flights?

bk

ballooba wrote: »

If Ryanair have a monopoly and prices shoot up as people claim? Then what stops other airlines entering the market to take advantage of the high fares? Or BA/Cityjet increasing their number of flights?

You totally underestimate Ryanair.

They will increase prices, but not by enough to make it attractive for other airlines to try and come in and compete with them. If another airline does enter the market, then Ryanair will quickly drop prices until they leave.

Ryanair would have a massive advantage in Dublin in having a large operation here and thus scale of ops. Only AerLingus has a similar scale of ops in Dublin. Any other airline would find it more expensive to set up in Dublin, thus making it hard for them to compete with Ryanair.

BTW non of this is new, Ryanair have done exactly these sort of tactics many times before at other airports and routes. The game plan is:

1) Become the primary dominant airline at an airport
2) Increase prices when facing no competition
3) Slash prices when another airline comes sniffing around.
4) Increase prices again when the other airline finally leaves.

Ryanair is not a charity, they are a business. It is madness that people seem to think handing Ryanair almost a monopoly is a good thing.

Don't get me wrong I have great respect for Ryanair, they are some of the shrewdest business people in the market. But it is this respect for them that leads me to know that this consolidation would be bad for Irish people.

bmaxi

The way I see it, the state stands to benefit to the tune of c. €200m if the stake in AL is sold, enough only to complete the Arklow bypass. That's the end of the good news.
Apart from the issues already raised re. removal of competition, there are other issues to consider, such as Ryanair's attitude to trade unions. I think it's inevitable there will be industrial strife following on from a Ryanair takeover, probably leading to closure of one or more of our airports. How long would it take for that to erode the €200m, affecting, as it would, tourism and trade? Secondly, the perception of Ryanair as a front line ambassador for the country, I remember a German lady commenting to me on her third visit to Ireland and her first experience of Ryanair, that she would not have enjoyed her previous visits so much and probably would not have come again if her first visit had been via Ryanair.
Then there will be the redundancies among both flight and ground staff, redundancy and unemployment costs adding to the burden on the exchequer. These are some of the things that need to be addressed if something is deemed to be "in the best interests of the taxpayer". By all means if the State can sell off AL, then well and good but I think it would be more beneficial to sell it to anyone other than Ryanair, even at half the price. Personally, I feel if the State approves this, it will be viewed after a while as a Lowry rerun.

ballooba

bk wrote: »

They will increase prices, but not by enough to make it attractive for other airlines to try and come in and compete with them. If another airline does enter the market, then Ryanair will quickly drop prices until they leave.

That doesn't really seem to me a problem. If the situation gets anywhere close to what fear mongers are predicting then there will be new entrants or an upscale by existing competitors. Dublin Airport has plenty of capacity as we know from painful expense.

bk

ballooba wrote: »

That doesn't really seem to me a problem. If the situation gets anywhere close to what fear mongers are predicting then there will be new entrants or an upscale by existing competitors. Dublin Airport has plenty of capacity as we know from painful expense.

It isn't about space at Dublin Airport, it is about other airlines finding it very difficult to compete with Ryanair and getting burned before and fearing trying to compete with Ryanair on their own turf.

What Airline do you think is going to overnight suddenly bring 45 aircraft, plus maintence crews, checkin staff, etc. to Dublin Airport? Only to get into a massive price war with Ryanair on their home turf.

Not going to happen.

Let me tell you what would happen if Ryanair buy Aer Lingus:

1) All those routes where Ryanair and Aer Lingus compete (e.g. Manchester, Barcelona, etc.) Ryanair cancels the Aer Lingus flights, thus immediately increasing prices on the Ryanair flights due to there now being only one flight where there were two.
2) Ryanair sells off Aer Lingus shorthaul Airbus fleet *
3) Ryanair may keep the longhaul fleet and start operating transatlantic.
4) Ryanair sells some or all of the Aer Lingus Heathrow slots.

While eventually you might see some other airlines enter the market to compete, it will take months or even years for them to do so and in the meantime Ryanair will milk the routes with no competition for all its worth.

And when competition does eventually enter, it won't be in any way as wide spread or consistent as Aer Lingus. Rather then have one strong competitor to Ryanair, you will have lots of different airlines, with much smaller ops, competing on just one or two routes. For instance you might get competition form BA on the UK routes, Iberia on Spanish routes, Wizz Air to eastern Europe, Norweigan to Scandanavia, etc. But you wont have one strong competitor like Aer Linugs with real scale of ops to compete with Ryanair.

* Ryanair doesn't need them or the hassle of a mixed fleet. They have plenty of spare 737's and their is high demand for Airbus aircraft in the second hand market at the moment.

ballooba

Aer Lingus is a joke of an airline. It would be better if it were taken over by Etihad or another major player than Ryanair, but that doesn't seem to be on the cards. From my perspective it's an acceptable alternative that they disappear and new entrants take up the slack.

I fail to see why I should care about whether I fly on an Airbus or a Boeing.

If the business case for flogging off the Heathrow slots is better than keeping them, so be it. We have BA connections to LHR, as far as I know BA have plenty more Heathrow slots if there's a business case for it.

bk

The fleet doesn't matter.

But the fact that if this happens, at least for the next 12 months, if not longer, you will be paying probably double for most flights out of Ireland should certainly worry you.

Even when other airlines eventually do enter, the price of tickets will still likely be higher as they will have higher operating costs then Aer Lingus due to their smaller operations here.

You just seem to have an irrational hatred of Aer Lingus. Fair enough they had a crappy monopoly for decades and Ryanair breaking this was brilliant. But it shocks me that you can't see that this is just handing that old monopoly to Ryanair.

The Aer Lingus of today is a very different company and is a very good competitor to Ryanair.

How anyone thinks that the elimination of a competitor is good for consumers baffles me?

ballooba

It's funny that you mention irrationality, because those arguments are ridiculous. Fares will not double, that is baseless scare mongering. Even if fares rise marginally, this for better service would be welcome.

I have no emotional connection to Aer Lingus, positive or negative. I see them as providing a poor alternative to Ryanair and I rarely fly with them. My air travel over the last year has been predominately with CityJet and Ryanair. I have flown with Etihad more than I have flown Aer Lingus. They are blocking the entry of a new entrant more than anything. If Aer Lingus disappear then someone else will take up the slack.

bk

ballooba wrote: »

It's funny that you mention irrationality, because those arguments are ridiculous. Fares will not double, that is baseless scare mongering. Even if fares rise marginally, this for better service would be welcome.

It is based on pure logic and business sense.

Ryanair and Aer Lingus mirror one another on many routes (e.g. Manchester, Barcelona, etc.) and I mean they even leave Dublin for these destinations at exactly the same time!!

If Ryanair buy Aer Linugs, they will of course close the Aer Lingus routes to these places and thus prices will rise.

This is only pure business logic. No irrationality here.

It would then take many months, if not more then a year for any other airline to bring up a new route to challenge Ryanair. In this period Ryanair will of course raise prices and milk it for all it is worth. How can any sane person not see this?

Do you think Ryanair are just going to leave extra money on the table, in the goodness of their hearts, not a chance. The only reason for Ryanair to buy Aer Lingus is to take out a competitor. The only reason to take out a competitor is to take out competition and raise prices. Yes eventually some competition may arise, but in the mean time Ryanair will make the most of it.

This is business 101.

BTW I have no problem with someone else like Ethiad buying Aer Lingus. Just not Ryanair as it will leave no significant competition in Ireland.

ballooba

You claimed that fares will probably double in the twelve months following takeover. Is that a rational argument?

bk

ballooba wrote: »

You claimed that fares will probably double in the twelve months following takeover. Is that a rational argument?

Well if you reduce capacity by 50% on a route, then yes it is rational to predict a doubling in fares.

Think of it this way, one aircraft is capable of taking 150 passengers *. So a route has a maximum of 300 passengers between Aer Lingus and Ryanair.

200 people look to buy tickets for this route. Prices are low because both airlines are desperately trying to fill their aircraft.

But now take out one aircraft. You still have 200 people looking to fly, but only 150 seats. Guess what happens, prices rise dramatically due to supply and demand.

Again this is only pure business logic of how supply and demand works.

The only reason Ryanair would be interested in buying Aer Lingus, is to take out a competitor, reduce competition, raise ticket prices and strip and sell off the asset of Aer Lingus.

None of this would be good for the travelling public of Ireland.

* The actual capacity of a 737 is 189 passengers, using these figures for simplicity.

n97 mini

A couple of observations:

1. We already had a greedy expensive airline with a near monopoly operating out of Dublin airport (well, a duopoly, operated with BA), and look what happened to them.

2. Ryanair operate a near monopoly to Prestwick and the prices are among the cheapest on all of Ryanair's routes.

3. There are plenty of big non-Irish airlines with deep pockets.

I have no real opinion on Aer Lingus as I think that whoever buys them, their position in 10 years time will still be the same. Either gone, or some sort of marketing name.

Blowfish

bk wrote: »

It would then take many months, if not more then a year for any other airline to bring up a new route to challenge Ryanair. In this period Ryanair will of course raise prices and milk it for all it is worth. How can any sane person not see this?

Raising prices suppresses demand, especially right now when the economy is crap. It can often lead to less profit than leaving prices low. This is economics 101.

bk

Blowfish wrote: »

Raising prices suppresses demand, especially right now when the economy is crap. It can often lead to less profit than leaving prices low. This is economics 101.

Yes, but it depends on supply and demand also.

Take my example, 150 seats, 200 people want to travel. If you raise prices only 140 might want to travel now. But if you are charging those 140 a lot more and still filling most of your seats, then your making a lot more money.

Yes they can't raise prices too much, as people just won't fly then, but they can certainly raise prices significantly if they manage to take out a competitor.

Prestwick isn't comparable with Dublin. Ryanair might be the only airline there, but they are competing with 25 different airlines at Glasgow International Airport. Both airports are 11km for Glasgow city center. So Ryanair is competing with a lot of airlines for passengers too and from Glasgow.

Tarabuses

n97 mini wrote: »

The govt should sell their share in AL, as the share price, like AL, is slowing going down the plug hole. Typical Irish govt: pander to vested interests, incl the MOL haters. Sell it now, to anyone, and maximise the little return there is left on it.

Why does your graph only go as far as March 2009?

Blowfish

bk wrote: »

Yes, but it depends on supply and demand also.

Take my example, 150 seats, 200 people want to travel. If you raise prices only 140 might want to travel now. But if you are charging those 140 a lot more and still filling most of your seats, then your making a lot more money.

You are implicitly assuming that they'll cut the second flight, when the opposite could be the case.

Both companies (and hence their flights) are already profitable. As well as this, using economies of scale, it'll be cheaper for Ryanair to have both flights than for the 2 seperate companies to have one flight each.

Along with this is the fact that the marginal cost of passengers 200-300 would be very low. After all, the two planes and two crews are already paid for, the only extra cost to Ryanair to carry one more passenger would be the very small amount of extra fuel needed and a virtually insignificant administration cost. This could actually drive Ryanair to lower their prices to increase demand such that they have 280 people wanting to fly instead. The average paid per passenger would go down, but their profits would go up. This is historically how Ryanair have always operated.

In other words, unless you actually know the entire elasticity of demand for the flights, you can't say that Ryanair woud drive up prices.

ballooba

bk wrote: »

Well if you reduce capacity by 50% on a route, then yes it is rational to predict a doubling in fares.

That does not seem rational to me (aside from the fact that you seem to be implying a direct correlation between price and demand), because a new entrant will step in if the margins increase by that much. I seriously doubt it would take 12 months for a new entrant to emerge. Regardless of that, there are indirect routings which would become attractive. Aside from both of those points, it's likely that these routes would be handed directly to a competitor by the regulator if the takeover were approved. Didn't this happen with some BMI routes when they were taken over by BA?

The long and short of this is that a takeover by Ryanair is not ideal for consumers, but it's nowhere near as bad as the fear mongers are making out.

bk

Blowfish wrote: »

You are implicitly assuming that they'll cut the second flight, when the opposite could be the case.

Oh, they will definitely cut the flights.

They don't want a mixed fleet of both Airbus and Boeing and all the parts and engineering headaches that go with that. Not when relatively young Airbus aircraft like these are in such demand on the second hand market.

Nor do they want the headaches of holding onto the expensive Aer Lingus pilots and the expensive Aer Lingus engineers. Remember these are the only people rated to fly the Airbus. Ryanair pilots aren't type rated to fly Airbus and vice versa. Same goes for engineers.

It makes much better sense to sell off the Airbus at a nice profit. Fire all the expensive Aer Lingus engineers and pilots.

Sure they might stick a second 737 on a route where there is loads of demand, but routes where there is little demand will definitely be cut, to get better utilisation out of one aircraft. This will definitely lead to higher ticker prices.

Why wouldn't you raise prices (within what the market will support), when you have no competition?

ballooba wrote: »

That does not seem rational to me (aside from the fact that you seem to be implying a direct correlation between price and demand), because a new entrant will step in if the margins increase by that much. I seriously doubt it would take 12 months for a new entrant to emerge. Regardless of that, there are indirect routings which would become attractive. Aside from both of those points, it's likely that these routes would be handed directly to a competitor by the regulator if the takeover were approved. Didn't this happen with some BMI routes when they were taken over by BA?

The long and short of this is that a takeover by Ryanair is not ideal for consumers, but it's nowhere near as bad as the fear mongers are making out.

LOL indirect routings??? Your having a laugh now, do you really think it would be cheaper to fly London -> Heathrow -> Manchester/Barcelona, etc. with BA?

Such flights are very expensive. Ryanair will definitely increase prices, but not by enough to make indirect routings an option. At least I hope it doesn't get that bad.

Plus you have the massive inconvenience of a much longer trip.

I'm not scare mongering. I think Ryanair are a great company. But we have to remember that they are a company. Their only goal and drive is to make money. Given the opportunity of being a defacto monopoly, you can bet they will take every chance to make the most of it.

ballooba

You're now implying that they will cut flights because they don't want to run a mixed fleet. I thought Ryanair had lots of surplus Boeings. A switch from Airbus to Boeing is of little concern to consumers.

As for indirect connections, this is one of three scenarios I listed. The others being new entrants and forced handovers by the regulator. There are already attractive indirect connections that are alternatives to Aer Lingus / Ryanair. DUB -> AGP via MAD is one that I can think of. As for Manchester, there are rail and road alternatives that can be combined with flights or ferries. All of this only comes into play though if all the other airlines in Europe ignore Ireland and these established routes.

bk

ballooba wrote: »

You're now implying that they will cut flights because they don't want to run a mixed fleet. I thought Ryanair had lots of surplus Boeings. A switch from Airbus to Boeing is of little concern to consumers.

In the winter months they have spare AC, not during the summer and they aren't ordering anymore.

ballooba wrote: »

As for indirect connections, this is one of three scenarios I listed. The others being new entrants and forced handovers by the regulator. There are already attractive indirect connections that are alternatives to Aer Lingus / Ryanair. DUB -> AGP via MAD is one that I can think of. As for Manchester, there are rail and road alternatives that can be combined with flights or ferries. All of this only comes into play though if all the other airlines in Europe ignore Ireland and these established routes.

Oh great, I thought Ryanair was supposed to be our new saviours and that they were going to keep the same number of aircraft and prices were going to stay the same.

Now it turns out we will have to suffer paying way more and wasting time with indirect flights and long train journeys. That is just fantastic!!! :mad:

ballooba

The fact is that none of us know exactly what Ryanair or any other new owner would do with Aer Lingus. Nor do we know what other airline groups would do in response to an Aer Lingus takeover. We can all come up with scenarios for what may happen. No one has shown me any plausible reason why this should be blocked. There does not seem to be a queue of suitors for Aer Lingus.

bk

ballooba wrote: »

The fact is that none of us know exactly what Ryanair or any other new owner would do with Aer Lingus. Nor do we know what other airline groups would do in response to an Aer Lingus takeover. We can all come up with scenarios for what may happen. No one has shown me any plausible reason why this should be blocked. There does not seem to be a queue of suitors for Aer Lingus.

Actually two other airlines have shown interest in Aer Lingus, Ethiad and Turkish.

Also why can't Aer Lingus continue on their own? Why do you think they have to be taken over?

After all they are profitable now, one of the only profitable companies that the government own.

They are effectively competing with Ryanair now, one of the most competitive and aggressive and largest airline in Europe, that is quiet an achievement. They have very effectively turned themselves around and transformed into a low cost airline.

Please explain to me how the Irish public benefits from going from two large, Irish owned and very competitive airlines, with a few smaller airlines. To just one large Irish owned airline and lots of small airlines?

I just don't see the logic of how we are supposed to benefit from this?

ballooba

bk wrote: »

Actually two other airlines have shown interest in Aer Lingus, Ethiad and Turkish.

Where are they? Where is their offer?

Aer Lingus is not a large airline in any sense of the word. They are a minnow and they have the offering of a minnow. They have a large presence in Ireland which acts as a bit of a barrier to any serious entrant with a concerted effort at serving the local market. We would benefit from the presence of a large non-LCC in Ireland as we would have decent international connections and a decent frequent flyer offering. I have Etihad gold status so I would love to see them take over EI.

Vic_08

Tarabuses wrote: »

Why does your graph only go as far as March 2009?

Because obviously the share price during the worst financial period in decades is enormously relevant, far more so than the current price which is double that shown at the end of the graph above.

The fact that the share price has net increased over the last 3 years doesn't nullify his "sell it quick before it's in the toilet" argument, no not at all.

ballooba wrote: »

No one has shown me any plausible reason why this should be blocked. There does not seem to be a queue of suitors for Aer Lingus.

bk has patiently explained to you the deatails of the bloody obvious; having a single airline controlling a very large % of all commercial traffic out of our small island, especially an airline with a proven track record of cutthroat tactics towards everyone, is a very bad thing for everyone except that airline.

Solair

It would be disastrous for competition in Ireland!

Ryanair would end up with an almost total monopoly at Cork other than a few holiday-flights, and a huge % of the routes out of Dublin and Shannon.

Aer Lingus and Ryanair together operate most short-haul European flights in/out of Ireland.

How's is merging them any good for anyone other than Ryanair's shareholders?

There would be no incentive to keep fares down or service levels improving and we would probably end up in a situation like we were in in the 1980s with huge ticket prices, only without the 'frills'.

Being an island, air transport is absolutely vital for Ireland too. If we get these kinds of things wrong they could have huge economic impacts, much more so than in other countries where there's easy road/rail access.

I don't really buy this 'green shirt' thing. Ryanair is an Irish multi-national owned by its share holders. It's HQ may well be in Dublin, but I don't necessarily think that we should assume that just because they've an Irish base that they're automatically going to run Aer Lingus in anything other than a purely commercial way that suits them.

I would rather see Aer Lingus being bought by another major airline.

Also, from Ryanair's perspective, what's the deal here?

I know they've a bit of a thing about buying Aer Lingus but, I don't really see why.

Aer Lingus is a small national airline with limited scope. It's using a completely different fleet type to Ryanair (so no savings there) and has typical old-school airline issues with pensions, high costs etc.

From a Ryanair shareholder perspective, I don't really get this obsession with Aer Lingus.

Do they not have bigger fish to fry?

I would see this deal as potentially bad for both Irish airlines to be perfectly honest.

I don't see how it benefits Ryanair and I think it could be very damaging to Aer Lingus and to Irish aviation in general as it just reduces competition so much.

If Ryanair want to launch transatlantic or other long-haul routes e.g. to Asia, they would be far better off going it alone and building their own fleet than buying a former state-owned airline like Aer Lingus. They'll never be able to modify an organisation like that to the Ryanair way of doing business.

ballooba

Vic_08 wrote: »

bk has patiently explained to you the deatails of the bloody obvious; having a single airline controlling a very large % of all commercial traffic out of our small island, especially an airline with a proven track record of cutthroat tactics towards everyone, is a very bad thing for everyone except that airline.

I've seen nothing plausible in there to concern me as a (regular) consumer.

bk

ballooba wrote: »

I've seen nothing plausible in there to concern me as a (regular) consumer.

And I have yet to see an explanation from you as to how the Irish public benefits from going from having two major Irish airlines to just one?

Savman

Jesus ballooba, facepalm moments all round. It's staring you in the face but your EI agenda is blinding your logic.

Ryanair would devour Aer Lingus, this is a worrying development as far as Irish air travel goes. I don't believe this is a smoke and mirrors trick by MOL, he wants rid of EI and why wouldn't he, as imperfect as EI are they have come fighting back in recent times and seem to be in much better shape now.

There isn't an airline that can or will compete with a Ryanair monopoly out of Dublin, they are simply too aggressive and would have too much of a market share.

Don't overlook the US pre-clearance in DUB leaning in EI's favour, they haven't quite tapped into the Eastern & European feeder market yet but it's a huge, huge competitive advantage for the BOS, ORD & JFK routes over most of the big dogs running from Paris or London for example.

We know EI took advantage back when they had the lion's share and kept fares high, but the solution in present day Ireland is not to hand a fierce competitor a golden opportunity to return to those dark days.

Optimistically, I don't think this will happen, there is simply too much political influence working against FR and I think this is a step too far. Don't count on the EU Competition rules either, IAG were able to circumvent that when they took over bmi to muscle out Virgin for those highly coveted Heathrow slots. Despite considerable opposition from Branson & Co., the buyout went ahead regardless.

No shamrock waving sentiment here for EI, but we need their presence on this island if only to keep FR honest competitive.

dowlingm

The question is what if anything BA/IAG will do. Having swallowed BMI at substantial cost (on a gross basis rather than net) they are now back in Belfast and Dublin from London Heathrow in their own colours. There is therefore a question mark over the future of the remaining codeshares and what in turn that does to EI's economics irrespective of ownership.

LXFlyer

BA have stated they will compete on point to point but continue to code share for onward traffic.

ballooba

Savman wrote: »

Jesus ballooba, facepalm moments all round. It's staring you in the face but your EI agenda is blinding your logic.

By your 'all round' comment it seems that you assume to speak for people other than yourself. You don't, every poster on this site is an individual, unless they are an agent of an organisation acting within their remit. And just because they don't agree with you does not mean they have an agenda. I see bullying behaviour like this from pressure groups and their spokes people all the time. I remain unconvinced that any of this is bad for the consumer. As for airlines that could offer a differentiated product to compete with Ryanair on their home turf, Virgin would not be a bad option. Although I only have experience of their Australian business. Not everyone wants a LCC, Aer Lingus just don't offer a quality product. That's not an agenda by the way, that's being a consumer.

Savman

I could be mistaken but I think it was part of the criteria for the EU accepting the BA deal, that they had to keep the interline open for connecting pax.

In fact I have an upcoming itinerary with VS, connecting in LHR, and the outgoing flight number has changed from BD to BA so I'll get to find out what the story is...the hard way!

Savman

ballooba wrote: »

By your 'all round' comment it seems that you assume to speak for people other than yourself. You don't, every poster on this site is an individual, unless they are an agent of an organisation acting within their remit. And just because they don't agree with you does not mean they have an agenda. I see bullying behaviour like this from pressure groups and their spokes people all the time. I remain unconvinced that any of this is bad for the consumer. As for airlines that could offer a differentiated product to compete with Ryanair on their home turf, Virgin would not be a bad option. Although I only have experience of their Australian business. Not everyone wants a LCC, Aer Lingus just don't offer a quality product. That's not an agenda by the way, that's being a consumer.

That's fair enough, but I don't know where you are going with your conspiracy theory that we are all part of an EI pressure group

I'm not against the idea of an Aer Lingus takeover and I would agree that a big player like Virgin or Etihad would fit the bill and bring numerous advantages to Irish passengers. My gripe is at the very concept of an all-Ryanair market which would be a game changer in a very bad way.

LLU

ballooba wrote: »

I've seen nothing plausible in there to concern me as a (regular) consumer.

And clearly you never will. But I think it's quite likely that many other readers will be able to take on board the fact that with less competition in the field, there would be less incentive for Ryanair to offer low fares, and fares would rise.

bkehoe

Solair wrote: »

From a Ryanair shareholder perspective, I don't really get this obsession with Aer Lingus.

Do they not have bigger fish to fry?

I would see this deal as potentially bad for both Irish airlines to be perfectly honest.

I don't see how it benefits Ryanair and I think it could be very damaging to Aer Lingus and to Irish aviation in general as it just reduces competition so much.

.

In my opinion it's quite simple why Ryanair want to take over Aer Lingus now.
EI is vulnerable at the moment due to the governments desire to sell their stake to raise cash and the share price represents much better value for money than their previous takeover attempts.
And if the deal is blocked then FR may be forced to sell their current shareholding as a nicely inflated price compared to what it was.

If FR do take over EI then they succeed in taking out a huge competitor. Not a lot of people are in a position to offer all cash like FR are. The cash expended in the takeover is pretty much irrelevant to them as due to their incredibly successful business model, profitability and growth they will never have a problem financing a future aircraft order with loans.

And the ultimate benefit if it does go ahead; far better utilisation for their fleet, higher load factors and ultimately much more profit due to higher fares. They would not be doing this if it was not advantageous to their core business which is bringing people from A to B for as much profit as the market allows. It's incredibly naive for anybody to even remotely consider that they won't align the route networks to be non-competitive and set fares at a more profitable level (i.e. HIGHER) as one of the first things they do.

ballooba

Savman wrote: »

That's fair enough, but I don't know where you are going with your conspiracy theory that we are all part of an EI pressure group

Where I am going is that you are not a 'we', you are a you. You seem to seek speak for a group. Also, just because you do find yourself on the side of popular opinion does not make you right or that you should bully those with minority voices. If anything, recent economic experience in this country should make that even more obvious.

jackofalltrades

n97 mini wrote: »

A couple of observations:

1. We already had a greedy expensive airline with a near monopoly operating out of Dublin airport (well, a duopoly, operated with BA), and look what happened to them.

New competitors would have to take on one of the most competitive and commercially aggressive airlines out there with a massive cash reserve for a long and sustained price war.

2. Ryanair operate a near monopoly to Prestwick and the prices are among the cheapest on all of Ryanair's routes.

They compete against another airport serving Glasgow. aswell as trains/buses and private cars on inland routes.

3. There are plenty of big non-Irish airlines with deep pockets.

Can't think of any with deeper pockets than Ryainair and who would risk a price war in their own backyard for the smaller opportunites that the Irish market would offer.

ballooba wrote:

They are blocking the entry of a new entrant more than anything. If Aer Lingus disappear then someone else will take up the slack.

What airline do you think is being blocked from entering the market?

ballooba wrote:

We would benefit from the presence of a large non-LCC in Ireland as we would have decent international connections and a decent frequent flyer offering.

Given the state of the economy i'd say there's little demand for a non-LCC carrier. I also don't think that a new carrier could over any kind of significant increase in routes served out of Ireland.