EC Extend Aer Lingus Takeover Probe Deadline Again

Turbine

According to the Sunday Business Post, the European Commission has again extended the deadline for the probe into Ryanair's takeover of Aer Lingus to February 6th.

The Sunday Business Post - News - EU extends Ryanair-Aer Lingus review to Feb 6th

Going by this, I'd say the odds of Ryanair taking over Aer Lingus have shortened and the more this probe is dragged out, the more it looks like Ryanair could actually get approval from EC.

What are your views?

keroseneboy

Ryanair regards Aer Lingus as a trophy asset with a golden egg or heathrow slots. They will not accept no for an answer. I believe this takeover attempt is a case of an inpenatrable object meeting with an unstoppable object. The only ones to benifit will be the competitors of both Ryanair and Aer Lingus who will not have to deal with the distraction of a fight that is only getting started, in my opinion. The tob brass at Ryanair have made it personal... Thy have a huge cash war chest and they will stop at nothing until they find a way of taking over Aer Lingus.

The purpose of the EU is to regulate the market and avoid unhealthy monopolies.

Regardless what "revolutionary consessions" Ryanair is prepared to make in order to secure a grren light from the EU monopolies commission, it is clear that the takeover of aer lingus by ryanair would lead eventually to a monopoly or oligopoly where there are few large airlines able to operate out of Dublin as a cartel.

As a frequent user of air travel to get on and off the island, I would be happier to see more rather than less competition on the routes I fly. It leads to better quality/price ratio for me, the consumer.

I also believe htat given the fact Ireland is an island and therefore depends greatly on air transport, I believe it to be unwise to surrender control of our commercial air links to the vagaries of the open market where, sadly, the company with the meanest attitude and tightness of purse gets to win.

Having at least 2 airlines based in Dublin is good for competition. I would not like to rely on Ryanair for the essencial service of connecting us to our neighbours as I believe that they are a slash and burn outfit who operate mercenary policy where all that matters is black ink sold under the guise of democratising air fares. Personally, I would be happy to see their demise even if it meant paying more for my plane ticket.

It does seem, however, that consolidation in the airline industry worldwite is the way forward leveraging economies of scale( e.g. The lufthansa group or BA/ Iberia). I would prefer to see Aer Lingus bought by a more civilised carrier such as Lufthansa. Mr Müller's close association and potential carreer there might lead to a good partnering.

It will be interesting to watch Ryanair's management subject the EU regulators to their charm offensive. One has to hand it to MOL that on any given Sunday, he shines in the "offensive" stakes.

dubdaymo

keroseneboy wrote: »

I believe it to be unwise to surrender control of our commercial air links to the vagaries of the open market ....I would prefer to see Aer Lingus bought by a more civilised carrier such as Lufthansa.

Now that is some contradiction!!!....and you want to hand over control of EI to the Germans :).

Personally, I would be happy to see their demise even if it meant paying more for my plane ticket.

The other 77,999,999 wouldn't agree with you.

donvito99

TBH, no one but Ryanair (excluding Etihad, and that is a long shot) would have any interest in buying Aer Lingus, as things stand.

As EI would be a massive thorn in the side of Ryanair should a takeover happen, their present motives are purely spiteful, and that leads me to believe that this pitiful drumming up of possible competitors out of DUB is bollix of the highest order.

It is inevitable that an EI takeover would be deeply damaging to Irish consumers and the economy. It might create one "strong airline", but even MO'L has talked about this in a global context, as opposed to one that concerns Irish customers.

keroseneboy

dubdaymo wrote: »

Now that is some contradiction!!!....and you want to hand over control of EI to the Germans :).


The other 77,999,999 wouldn't agree with you.

You did not read my post. Where did you get that "I want to hand over control of EI to the Germans".

I believe you havemisconstrued my observation about the illustrious career at Lufhhansa of the current Aer Lingus CEO and turning into them at best bigoted and at worst racist provocation really does not advance any cause.

That is a completely stupid comment leading me to the belief that posting here is a total waste of my time and effort. I will, however, humour you and explaing again what I meant in simpler language.





First of all, the LH group is owned by it's shareholders, not by "The Germans".

"The Germans" and indeed anyone with a brokerage account can buy ordinary Aer Lingus shares today for about €1.

Secondly, Aer Lingus PLC is owned by it's shareholders, not by some unknown to me entity I am attempting, according to you, to hand over EI from.

If you are referring to the German state 75 years ago I concede you might have a point, ableit, a bigoted racist one.

If you take the time to re-read the original post, my point was that consolidation is inevitable and EI's current boss es -ex Lufthansa and well got there. I said that this might lead to a good partnering.

LH have had successful foreign aquisitions experience( BMI,Swiss, Austrian)

However,I would prefer to see EI retain it's brand and thrive the way Swiss International Airlined did under LH.

The most facist and least democratic Airline in Europe is FR.

Lufthansa is a far more ethical operion than the boys at Ryanair will ever be.

I am guessing that the 80 million odd number you quote as having an opposing view to me. Quite frankly, I could not care less what anyboy thinks of my personal preference to see Ryanair's AOC revoked.

I belive MOL's behaviour as an individual at that press conference he have in Germany where he had a female interpeeter put on the spot after federring to fellacio as a frill in the Ryanair transatlantic premium cabin that he was fabulating on the fly about tipifies why he is an appaling ambassador for our nation. I would applaud The Department of Foreign Affairs threatening to revoke his passport on those grounds, assuming he is still travelling under one.

When you quote that huge number of people(79,999,999) not agreeing with me, I would like to say back to them that the efforts in innovation in safety where airlines have been proactive and taking a 6 sigma approach to safety have plateaued since the advent cut throat bullies like Southwest/Ryanair have put enormous downward pressure on fares.

i believe that commercial aviation should not be a free for all with no consideration given to CO2/NOx emmissions or dwindling fossil kerosene. Has anyone heard Ryanair's efforts in the Sustainable Biofuels arena  ? Of course you haven't. The planet is the last thing on MOL's greedy little thug's mind.

I am not so sure that you can deduct that every Ryanair passanger takes their service out of choice. Christoph Müller once told me that Aer Lingus would not do well offering a more full service. He told me that this is because they are so price sensitive.

Go ahead and let Ryanair become a monopoly operator out of Ireland. Next time you want to go see your cousins in Luton, enjoy the fact that tou can't fly anywhere without being bullied.

Ryanair is just another step in turning what could have been a great little democratic socialist country into a robber barron free for all joke shop modelled on that wonderful country you all admire so much, the US of A.....medicaid andyone ?

christy c

keroseneboy wrote: »

You did not read my post. Where did you get that "I want to hand over control of EI to the Germans".

I believe you havemisconstrued my observation about the illustrious career at Lufhhansa of the current Aer Lingus CEO and turning into them at best bigoted and at worst racist provocation really does not advance any cause.

That is a completely stupid comment leading me to the belief that posting here is a total waste of my time and effort. I will, however, humour you and explaing again what I meant in simpler language.





First of all, the LH group is owned by it's shareholders, not by "The Germans".

"The Germans" and indeed anyone with a brokerage account can buy ordinary Aer Lingus shares today for about €1.

Secondly, Aer Lingus PLC is owned by it's shareholders, not by some unknown to me entity I am attempting, according to you, to hand over EI from.

If you are referring to the German state 75 years ago I concede you might have a point, ableit, a bigoted racist one.

If you take the time to re-read the original post, my point was that consolidation is inevitable and EI's current boss es -ex Lufthansa and well got there. I said that this might lead to a good partnering.

LH have had successful foreign aquisitions experience( BMI,Swiss, Austrian)

However,I would prefer to see EI retain it's brand and thrive the way Swiss International Airlined did under LH.

The most facist and least democratic Airline in Europe is FR.

Lufthansa is a far more ethical operion than the boys at Ryanair will ever be.

I am guessing that the 80 million odd number you quote as having an opposing view to me. Quite frankly, I could not care less what anyboy thinks of my personal preference to see Ryanair's AOC revoked.

I belive MOL's behaviour as an individual at that press conference he have in Germany where he had a female interpeeter put on the spot after federring to fellacio as a frill in the Ryanair transatlantic premium cabin that he was fabulating on the fly about tipifies why he is an appaling ambassador for our nation. I would applaud The Department of Foreign Affairs threatening to revoke his passport on those grounds, assuming he is still travelling under one.

When you quote that huge number of people(79,999,999) not agreeing with me, I would like to say back to them that the efforts in innovation in safety where airlines have been proactive and taking a 6 sigma approach to safety have plateaued since the advent cut throat bullies like Southwest/Ryanair have put enormous downward pressure on fares.

i believe that commercial aviation should not be a free for all with no consideration given to CO2/NOx emmissions or dwindling fossil kerosene. Has anyone heard Ryanair's efforts in the Sustainable Biofuels arena  ? Of course you haven't. The planet is the last thing on MOL's greedy little thug's mind.

I am not so sure that you can deduct that every Ryanair passanger takes their service out of choice. Christoph Müller once told me that Aer Lingus would not do well offering a more full service. He told me that this is because they are so price sensitive.

Go ahead and let Ryanair become a monopoly operator out of Ireland. Next time you want to go see your cousins in Luton, enjoy the fact that tou can't fly anywhere without being bullied.

Ryanair is just another step in turning what could have been a great little democratic socialist country into a robber barron free for all joke shop modelled on that wonderful country you all admire so much, the US of A.....medicaid andyone ?

I'm not sure what has you so bitter but you would like to see Ryanair's AOC revoked and for good measure MOL's passport? Yes a Ryanair monopoly wouldn't be good but let's not get carried away. Also am I the only one that hasn't been "bullied" when flying from Ireland?

brandon_flowers

keroseneboy wrote: »

You did not read my post. Where did you get that "I want to hand over control of EI to the Germans".

I believe you havemisconstrued my observation about the illustrious career at Lufhhansa of the current Aer Lingus CEO and turning into them at best bigoted and at worst racist provocation really does not advance any cause.

That is a completely stupid comment leading me to the belief that posting here is a total waste of my time and effort. I will, however, humour you and explaing again what I meant in simpler language.





First of all, the LH group is owned by it's shareholders, not by "The Germans".

"The Germans" and indeed anyone with a brokerage account can buy ordinary Aer Lingus shares today for about €1.

Secondly, Aer Lingus PLC is owned by it's shareholders, not by some unknown to me entity I am attempting, according to you, to hand over EI from.

If you are referring to the German state 75 years ago I concede you might have a point, ableit, a bigoted racist one.

If you take the time to re-read the original post, my point was that consolidation is inevitable and EI's current boss es -ex Lufthansa and well got there. I said that this might lead to a good partnering.

LH have had successful foreign aquisitions experience( BMI,Swiss, Austrian)

However,I would prefer to see EI retain it's brand and thrive the way Swiss International Airlined did under LH.

The most facist and least democratic Airline in Europe is FR.

Lufthansa is a far more ethical operion than the boys at Ryanair will ever be.

I am guessing that the 80 million odd number you quote as having an opposing view to me. Quite frankly, I could not care less what anyboy thinks of my personal preference to see Ryanair's AOC revoked.

I belive MOL's behaviour as an individual at that press conference he have in Germany where he had a female interpeeter put on the spot after federring to fellacio as a frill in the Ryanair transatlantic premium cabin that he was fabulating on the fly about tipifies why he is an appaling ambassador for our nation. I would applaud The Department of Foreign Affairs threatening to revoke his passport on those grounds, assuming he is still travelling under one.

When you quote that huge number of people(79,999,999) not agreeing with me, I would like to say back to them that the efforts in innovation in safety where airlines have been proactive and taking a 6 sigma approach to safety have plateaued since the advent cut throat bullies like Southwest/Ryanair have put enormous downward pressure on fares.

i believe that commercial aviation should not be a free for all with no consideration given to CO2/NOx emmissions or dwindling fossil kerosene. Has anyone heard Ryanair's efforts in the Sustainable Biofuels arena  ? Of course you haven't. The planet is the last thing on MOL's greedy little thug's mind.

I am not so sure that you can deduct that every Ryanair passanger takes their service out of choice. Christoph Müller once told me that Aer Lingus would not do well offering a more full service. He told me that this is because they are so price sensitive.

Go ahead and let Ryanair become a monopoly operator out of Ireland. Next time you want to go see your cousins in Luton, enjoy the fact that tou can't fly anywhere without being bullied.

Ryanair is just another step in turning what could have been a great little democratic socialist country into a robber barron free for all joke shop modelled on that wonderful country you all admire so much, the US of A.....medicaid andyone ?

And breathe....

Ryanair will not take over EI, it will suck the life out of Ryanair's current business health. They are simply looking for the best return for their investment which they are perfectly entitled to do.

L1011

brandon_flowers wrote: »

And breathe....

Ryanair will not take over EI, it will suck the life out of Ryanair's current business health. They are simply looking for the best return for their investment which they are perfectly entitled to do.

How would buying a profitable business "suck the life" out of another profitable business? Despite Micko's claims, Aer Lingus aren't some helpless wreck.

brandon_flowers

MYOB wrote: »

How would buying a profitable business "suck the life" out of another profitable business? Despite Micko's claims, Aer Lingus aren't some helpless wreck.

Bit of a myopic response... Where did I say anything in that post about EI being a helpless wreck?

And the reason it would is because M'OL would have no interest in running EI the way it is run now. He would have no time for unions and/or union loyal staff and it would cost Ryanair/O'Leary a lot of money to turn the place into an extension of Ryanair with Ryanair policies.

Turbine

donvito99 wrote: »

TBH, no one but Ryanair (excluding Etihad, and that is a long shot) would have any interest in buying Aer Lingus, as things stand.

As EI would be a massive thorn in the side of Ryanair should a takeover happen, their present motives are purely spiteful, and that leads me to believe that this pitiful drumming up of possible competitors out of DUB is bollix of the highest order.

It is inevitable that an EI takeover would be deeply damaging to Irish consumers and the economy. It might create one "strong airline", but even MO'L has talked about this in a global context, as opposed to one that concerns Irish customers.

Why is it inevitable? There's hardly any competition between the two airlines now as is, so what would them merging change?

You said it yourself, Ryanair acquiring Aer Lingus would create one strong Irish airline group that would rival Lufthansa Group, IAG, and Air France-KLM. This new airline group would then have the buying power capable of joint procurement of aircraft and the negotiating power to bring down Aer Lingus' costs that it doesn't have right now as an independent carrier.

Ryanair also has the capital required to invest in new long-haul aircraft that would enable Aer Lingus to quickly expand it's long-haul network, which it isn't capable of doing now where we're only seeing modest increases in capacity on existing routes.

Michael O'Leary has also suggested that Ryanair's European network could be used to feed Aer Lingus' long-haul network through Dublin. Unlike the nonsense being posted by keroseneboy, this actually makes perfect financial sense.

Now obviously were Ryanair to be given approval by the EC to takeover Aer Lingus, there would be conditions attached. One of them most likely being the release of some LHR slots. From a consumer point of view though, I would welcome that because it'd mean more competition on the Dublin-London market, where Aer Lingus and Ryanair are far too cosy right now.

brandon_flowers wrote: »

M'OL would have no interest in running EI the way it is run now. He would have no time for unions

You make it sound like such a bad thing.

basill

Why is it inevitable? There's hardly any competition between the two airlines now as is, so what would them merging change?

Hardly? Its about 30-40 routes that we compete on.

You said it yourself, Ryanair acquiring Aer Lingus would create one strong Irish airline group that would rival Lufthansa Group, IAG, and Air France-KLM. This new airline group would then have the buying power capable of joint procurement of aircraft and the negotiating power to bring down Aer Lingus' costs that it doesn't have right now as an independent carrier.

Err. 101 of economics. Go look up and see if monopolies are good or bad for the consumer and the business itself.

Ryanair also has the capital required to invest in new long-haul aircraft that would enable Aer Lingus to quickly expand it's long-haul network, which it isn't capable of doing now where we're only seeing modest increases in capacity on existing routes.

You seem to lack the fundamentals of living on and island. Where are these passengers going to come from to fly on the shiny new longhaul jets that you want FR to purchase? Incidentally AL has orders for A350 aircraft and plenty of money in the bank to buy shiny new aircraft if we had somewhere to fly them.

Michael O'Leary has also suggested that Ryanair's European network could be used to feed Aer Lingus' long-haul network through Dublin. Unlike the nonsense being posted by keroseneboy, this actually makes perfect financial sense.

Whilst CBP has its advantages for a lot of people many want to go direct to the US and avoid a connection. Connections mean you introduce into the equation things like potential delays, lost baggage etc. To overcome this you tend to have to discount to get the custom. That negates the advantage of getting the custom unless you are purely chasing load factor which is not the strategy of a mature airline such as AL. The low fares strategy and constant "supposed" discounting by MOL has only served to make his customers even more price adverse than what they otherwise would have been.

Now obviously were Ryanair to be given approval by the EC to takeover Aer Lingus, there would be conditions attached. One of them most likely being the release of some LHR slots. From a consumer point of view though, I would welcome that because it'd mean more competition on the Dublin-London market, where Aer Lingus and Ryanair are far too cosy right now.

The slots would be freed up and then after the minimum 3 month period has lapsed there would be an almighty fare war with lots of free tickets on offer. It would result in a bloodbath for the overseas airline who would cease Dublin operations. More than likely they would use the slots to fly somewhere else and the FR monopoly would kick into action. Of course MOL would blame xy and z but the result would be an increase in fares.

Turbine

basill wrote: »

Hardly? Its about 30-40 routes that we compete on.

And there's not much difference on fares on most of those routes, hence my comment.

basill wrote: »

Err. 101 of economics. Go look up and see if monopolies are good or bad for the consumer and the business itself.

Most countries in Europe only have 1 main airline, and the industry will continue consolidating until there are only 4 large airline groups left. Like it or not, this is the way the industry is going, and it's up to Aer Lingus to adapt it's business so as to remain relevant in an increasingly consolidated marketplace. It has so far refused to rejoin an alliance, so the only logical path I see for it to go down is to become part of a large airline group. And right now the only airline interested in acquiring Aer Lingus is Ryanair.

basill wrote: »

You seem to lack the fundamentals of living on and island. Where are these passengers going to come from to fly on the shiny new longhaul jets that you want FR to purchase? Incidentally AL has orders for A350 aircraft and plenty of money in the bank to buy shiny new aircraft if we had somewhere to fly them.

You seem to lack the ability to respond to someone's opinion without talking down to them. Yes, Aer Lingus have 9 A350s on order, but these have been deferred out to 2015-2017, and there are question marks over whether it'll even have the capital to take delivery of all 9 aircraft. And by then, Aer Lingus will have lowered it's minimum reserve capital and then there's the pension dispute with the union which could end up in the high court and them have to pay out hundreds of millions. So nobody knows what financial state the airline will be in by 2015, which may force it to cancel it's A350 order altogether. And even if it does take delivery of the A350s, most if not all of them will just replace existing A330s, so there'll be very little increase in capacity.

But to say there isn't a market to fly to right now is pure nonsense. Particularly when you have US carriers announcing new routes to Ireland, with further announcements on the way. Aer Lingus' problem is suitable aircraft, not suitable markets.

basill wrote: »

Whilst CBP has its advantages for a lot of people many want to go direct to the US and avoid a connection. Connections mean you introduce into the equation things like potential delays, lost baggage etc. To overcome this you tend to have to discount to get the custom. That negates the advantage of getting the custom unless you are purely chasing load factor which is not the strategy of a mature airline such as AL. The low fares strategy and constant "supposed" discounting by MOL has only served to make his customers even more price adverse than what they otherwise would have been.

By that logic nobody would be connecting with Aer Lingus through Dublin. Yet we know that 80% of their long-haul passengers originate outside Ireland, and over 20% of their passenger revenues are generated from passengers connecting from inter-airline carriers.

basill wrote: »

The slots would be freed up and then after the minimum 3 month period has lapsed there would be an almighty fare war with lots of free tickets on offer. It would result in a bloodbath for the overseas airline who would cease Dublin operations. More than likely they would use the slots to fly somewhere else and the FR monopoly would kick into action. Of course MOL would blame xy and z but the result would be an increase in fares.

That could very well happen, but surely by that logic Ryanair would be launching a fares war with BA now as they increase their LHR-DUB frequency to 8 flights a day? What makes you think Ryanair would even want to regain the DUB-LHR market share that Aer Lingus has now anyway?

dubdaymo

Turbine wrote: »

Yet we know that 80% of their long-haul passengers originate outside Ireland,

Turbine, can you elaborate a bit more on that. Are you saying that, on the daily EI A330 flights DUB-USA, 80% of the passengers thereon are not resident in Ireland but are just connecting at DUB from somewhere else? Or am I misunderstanding?

but surely by that logic Ryanair would be launching a fares war with BA now as they increase their LHR-DUB frequency to 8 flights a day?

The average return flight DUB-LONDON APTS on FR is already way less than even a one-way flight on BA DUB-LHR so I don't see the need for a further fares war.

Turbine

dubdaymo wrote: »

Turbine, can you elaborate a bit more on that. Are you saying that, on the daily EI A330 flights DUB-USA, 80% of the passengers thereon are not resident in Ireland but are just connecting at DUB from somewhere else? Or am I misunderstanding?

Apparently. At least that's according to this article:

http://centreforaviation.com/analysis/aer-lingus-pursuing-sixth-freedom-strategy-seeks-trans-atlantic-joint-venture-60379

Then in another article from March 2012, Christoph Mueller is quoted as saying:

"We’re focusing more and more on the non-Irish consumer and shifted out ticket sales, from 55% outbound and 45% inbound to 45% outbound and 55% inbound."

dubdaymo wrote: »

The average return flight DUB-LONDON APTS on FR is already way less than even a one-way flight on BA DUB-LHR so I don't see the need for a further fares war.

Just making the point that if Ryanair's intention is drive off or even reduce competition on the Dublin-London market, they'd already be doing it. They don't need to wait to takeover Aer Lingus to start a price war. But instead we see that Ryanair and Aer Lingus have become very cosy with each other in terms of fares. So in the event of a takeover I don't see anything changing, they'll just continue to cosy up to any new competition because Dublin-London is one of their highest-yielding markets, and it's in their interests in keep prices inflated.

IngazZagni

basill wrote: »

You seem to lack the fundamentals of living on and island. Where are these passengers going to come from to fly on the shiny new longhaul jets that you want FR to purchase? Incidentally AL has orders for A350 aircraft and plenty of money in the bank to buy shiny new aircraft if we had somewhere to fly them.

Well you are very positive. Aer Lingus themselves are not. In the aer Lingus annual report it says there is a risk that future aircraft orders may not be able to be prperly financed and they would have to rely on other resources. That "plenty of money in the bank" is useless unless many issues, especially the pension deficit is sorted out. Right now that issue alone will be causing strikes.

If Aer Lingus is as valuable as you say then the markets would rate them as such but they don't. About 550 million euro, almost 150 million less than the FR bid and I would imagine it would slide further should the FR bid fail.

L1011

Market valuations cannot, ever, be trusted to be a true indicator of an assets value. Particularly when such a tiny % of the shares are actually actively trading - due to the huge blocs owned by the state, FR, O'Brien, etc.

orionm_73

If EI and FR prices are similar it's because they ARE competing. Each trying to stay within the same price range. It would be a very different situation if one airline had 80% of the market to themselves.

While most European countries have either only one airline or one dominant airline, there is no lack of competition from other countries airlines... Eg France, while there isn't really any major carrier other then Air France, there are any other number of carriers to get passengers to and from France other than AF.

If FR was to take over EI, there would be little or no competition on routes to and from Ireland. FR have shown in the past they will run any other low cost carrier out of Ireland. (easyJet & Go). In addition other legacy carriers would not have the cost base to either continue competing with FR or launch new routes to Ireland.

With regard to RE, The only reason they are still operating is the EI franchise. They would have no hope of surviving with EI gone.

Turbine

orionm_73 wrote: »

If EI and FR prices are similar it's because they ARE competing. Each trying to stay within the same price range. It would be a very different situation if one airline had 80% of the market to themselves.

So if both airlines are charging €200 pp each way to Malaga, that's competition in action is it?

orionm_73 wrote: »

While most European countries have either only one airline or one dominant airline, there is no lack of competition from other countries airlines... Eg France, while there isn't really any major carrier other then Air France, there are any other number of carriers to get passengers to and from France other than AF.

That's true, a lot of airlines fly to France. But then France has a population 14 times the size of Ireland, so is it any wonder more airlines fly there? But even despite this, Air France still holds a very dominant position with a market share of 80% of the French domestic market, and a 26% share of the total European market.

orionm_73 wrote: »

If FR was to take over EI, there would be little or no competition on routes to and from Ireland. FR have shown in the past they will run any other low cost carrier out of Ireland. (easyJet & Go). In addition other legacy carriers would not have the cost base to either continue competing with FR or launch new routes to Ireland.

And yet BA have just increased frequency on their LHR-DUB route to 8 flights a day. This idea that Ryanair would drive all competition out of Ireland after acquiring Aer Lingus is just nonsense.

Like I said in another post, Ryanair don't need to takeover Aer Lingus to start a price war with other airlines. If they wanted to drive all competition out of Ireland, they could do it now if they wanted to.

orionm_73 wrote: »

With regard to RE, The only reason they are still operating is the EI franchise. They would have no hope of surviving with EI gone.

But that's assuming the franchise is discontinued, yet there's every chance it'll continue.

In any case, why do people think it's guaranteed to continue if Aer Lingus remains independent? Aer Lingus already have a clause in their contract with Aer Arann that allows them to end the franchise at any time, so why do people think this would only ever happen if Ryanair took over Aer Lingus? Markets change and as a result so do business models. Aer Lingus could decide in 5 years that the franchise doesn't suit their business model anymore and end it there and then, just like they did with Aer Lingus Commuter 10 years ago.

dubdaymo

Thanks, Turbine. That 80% is a staggering figure and suggests that the T/A operation would collapse without it - and equally staggering that EI's own staff are planning to p them all off.

omega man

dubdaymo wrote: »

Thanks, Turbine. That 80% is a staggering figure and suggests that the T/A operation would collapse without it - and equally staggering that EI's own staff are planning to p them all off.

It's a difficult scenario for many staff who would never believe that strike action is an option, however the thought of losing your pension can focus the mind. Still think common sense will prevail and talks will resume. Too much to lose for all parties concerned.

Bessarion

Turbine wrote: »

And yet BA have just increased frequency on their LHR-DUB route to 8 flights a day. This idea that Ryanair would drive all competition out of Ireland after acquiring Aer Lingus is just nonsense.
.........
But that's assuming the franchise is discontinued, yet there's every chance it'll continue.

BA are increasing service, yes. But in reality they are replacing the previous Bmi service. So overall the capacity increase on the route isn't huge.
In addition BA services a different market to FR. BA offers connections onto their worldwide network ex-LHR, FR offer point to point services with no transfers. FR already dominate the DUB-STN/LTN market, no other carrier will enter those markets. EI serve point to point and connection at LHR/LGW. Turbine, do you remember what FR did to Easyjet and GO when they had the temerity to enter the Irish market....then there is asset stripping that occured when FR took over Buzz.

Just because 2 carriers offer similar prices to a destination doesn't mean their is no competition. its means both carriers are trying to match the others price so they will not lose business. FR and EI compete on 40 routes out of Ireland, that approx 80% of all traffic out of Ireland. So with your example of Malaga, which airline is the lowest cost? FR....then surely they should offer cheaper fares than EI....unless they are NOT offering their lowest possible average fare?
http://www.anna.aero/2012/06/20/the-ryanair-offer-for-aer-lingus-how-do-the-two-airlines-networks-at-dublin-compare/

The theory that the FR network would feed into the EI longhaul is mad. Firstly FR will not offer connections, secondly MoL claims that the 2 airlines would be run seperately.

As for the survival of RE....MoL has already threatened to crush RE and Padraig O'Cheallaigh. So I think the odds are good that FR in control would end the franchise, thus killing off RE. Afterall FR underbid RE on the KIR-DUB PSO a while back even though operating a 189 seater B738 is far more costly than an ATR-72. This was done purely to prevent RE getting access to this revenue stream,FR lost money on the route. This FR takeover attempt is being fuelled by emotion rather than cold logic. We already saw/read how US investors were very unhappy about the share purchase in 2006, this time MoL was very careful to note that as the offer is below 50% of the market value of FR, therfore he is not answerable to shareholders. A strange piece of info to include in the announcement a few months ago.

EI figures from their 2011 Full year results show that approx E650M of the 1 Billion Euro cash reserves are earmarked for future aircraft payments. So EI have the A350's already financed. The question mark exists about whether or not they require them in 2015 or at a later time. There A330 fleet is quite young. They have the flexibility to switch the A350 order to A321NEO or even sell the slots to another airline. EI were able to change and defer 3 A333 orders with no financial penalty from Airbus. Christoph Mueller has already stated that he can see EI operating both types in tandem. Recent pax numbers published in the Irish media show loadfactors of >85% on their longhaul services. (From my reading of the full years results I take it that approx 65% of L/H pax are transfers) It seems that EI are filling their aircraft as it is, don't know what seats MoL is talking about filling.
MoL talks about growing the EI longhaul network, does he have a secret stash of aircraft to utilise. The current market has a lot of narrow bodies avail but few suitable widebodies on the leasing market. Also longhaul is a quite differnt operation than shorthaul. Not very many successful longhaul low cost operators around.


And as a final point the EI share price was above 1.00 when the FR bid was announced. Since then it has hovered around 1.10-1.05. So it might drop back to 1.00. Afterall only about 40% of the shares are actually being traded on the open market. In fact if FR are forced to sell their bloc trading might actually increase from institutional investors in the US.

Turbine

Bessarion wrote: »

BA are increasing service, yes. But in reality they are replacing the previous Bmi service. So overall the capacity increase on the route isn't huge.
In addition the BA series are a differnet market to FR. BA offers connections onto their worldwide network ex-LHR, FR offer point to point services with no transfers. FR already dominate the DUB-STN market, no other carrier will enter that market.

BA are not filling 8 flights a day with connections, most of their passengers are flying only between Dublin and London. So the point still stands that a carrier with a much higher cost base than Ryanair has entered/re-entered the Dublin-London market and looks to have been successful, and has yet to trigger a price war with Ryanair.

Bessarion wrote: »

Just because 2 carriers offer similar prices to a destination doesn't mean their is no competition. its means both carriers are trying to match the others price so they will not lose business. FR and EI compete on 40 routes out of Ireland, that approx 80% of all traffic out of Ireland.
http://www.anna.aero/2012/06/20/the-ryanair-offer-for-aer-lingus-how-do-the-two-airlines-networks-at-dublin-compare/

That's your opinion but I disagree. I think Aer Lingus and Ryanair are far too cosy on too many routes, and are merely matching their prices so as to maximise yields rather than provide the consumer with real competition.

Bessarion wrote: »

The theory that the FR network would feed into the EI longhaul is mad. Firstly FR will not offer connections, secondly MoL claims that the 2 airlines would be run seperately.

It was Michael O'Leary who suggested Ryanair would use it's network to feed Aer Lingus long-haul. So take it up with him...

Bessarion wrote: »

As for the survival of RE....MoL has already threatened to crush RE and Padraig O'Cheallaigh. So I think the odds are good that FR in control would end the franchise, thus killing off RE.

If I were you I'd stop reading the dramatic headlines of the Independent.

Bessarion wrote: »

Afterall FR underbid RE on the KIR-DUB PSO a while back even though operating a 189 seater B738 is far more costly than an ATR-72. This was done purely to prevent RE getting access to this revenue stream,FR lost money on the route.

Didn't Ryanair tender for the KIR route as a way to protest against PSO routes. In that they purposely undercut Aer Arann to show the route could be run commercially at a lower cost?

Bessarion wrote: »

EI figures from their 2011 Full year results show that 2/3 of the 1 Billion Euro cash reserves are earmarked for future aircraft payments. So EI have the A350's already financed. The question mark exists about whether or not they require them in 2015 or at a later time. They have the flexibility to switch the A350 order to A321NEO or even sell the slots to another airline. EI were able to change and defer 3 A333 orders with no financial penalty from Airbus. If EI thought they could use those A333's they would be in service now. Recent pax numbers published in the Irish media show loadfactors of >85% on their longhaul services. (From my reading of the full years results I take it that approx 65% of L/H pax are transfers)

That's all irrelevant when you consider the pension dispute with the unions, which if not resolved will end up in the high court and very well result in Aer Lingus being forced to pay out hundreds of millions of euro.

My point is by being part of a large airline group, Aer Lingus would be able to procure new wide-body aircraft sooner and quickly expand their long-haul network. The fact that US carriers are quickly expanding their capacity out of Ireland shows that there is a market, and that's just Ireland-USA connections. The potential for Europe-USA connections through Dublin is even greater.

Tenger

Turbine wrote: »

My point is by being part of a large airline group, Aer Lingus would be able to procure new wide-body aircraft sooner and quickly expand their long-haul network. The fact that US carriers are quickly expanding their capacity out of Ireland shows that there is a market, and that's just Ireland-USA connections. The potential for Europe-USA connections through Dublin is even greater.

Lots of points being bandied about....I focus on this one.

As it stands EI currently hold 6 early delivery slots for the A350. Both this and the B787 are booked out for up to 5 years. (558 and 838 orders respectively) Being part of a larger airline group doesn't give them the ability to jump the queue. It does offer them a stronger bargaining position for future order discounts. But the announcement a few months back of the Ethiad share purchase mentioned 'up to 50 areas of joint cost saving' So I would guess that EI and EY have already discussed joint procurement of aircraft in the future.

Looking at the US carriers growing capacity from Ireland, please note that these routes are being operated with B757's for the most part. This aircraft is perfect for east Coast-Ireland, low CASM and feeding from/into their domestic network reduces their risk. EI have a larger aircraft which while very efficient is a riskier proposition. If EI had B757's I am sure we would see them being able to grow their network in this way. Lets see if EI lease some A321NEO when the are in operation (25% of current orders are direct from leasing companies)

Bessarion

Possible update on this situation:

http://www.lse.co.uk/FinanceNews.asp?ArticleCode=7yarjd1sk487ywp&ArticleHeadline=EU_to_oppose_Ryanair_Aer_Lingus_deal__source

EU antitrust regulators plan to object to Ryanair's proposed takeover of rival Aer Lingus because the Irish budget airline has not offered sufficient concessions, a person familiar with the matter said on Monday. ..........The person said the objections were likely to be sent to Ryanair in the coming week or two. The source said the European Commission had not sought feedback from consumers or competing airlines on the concessions offered by Ryanair, indicating that it was unconvinced by the airline's arguments

A319er

I have been following this thread in conjunction with annother one on pprune,
a lot of the discussion is similiar,

I am wondering why MOL just cannot get anyone,
i.e. Justice Peter Kelly Commercial Court
EU regulaters,
UK Competition office amongst others

to believe what he says in connection with any issue he raises. I love Justice Kelly qte, " MOL has an infrequent relationship with the truth"

Surely no one wants a man like this as an even more dominant player in Irish and EU aviation ?

also query for thos ein the know
why have BA cancelled BA822/823 every day so far this month LHRDUBLHR , odd way to re launch the old BMI winter schedule , from years back. ?

DOCARCH

Just heard that the Government/Leo has ruled out selling its 25% share in Aer Lingus to Ryanair. Looks like FR bid to take over EI could be dead in the water!

Shamrock231

DOCARCH wrote: »

Just heard that the Government/Leo has ruled out selling its 25% share in Aer Lingus to Ryanair. Looks like FR bid to take over EI could be dead in the water!

Now just for the government to try and pull a few strings in the EU and we can finally see this over and done with. Glad to see common sense has prevailed at the Department this time round.

DOCARCH

Probably didn't help MOLs cause by previoulsy calling Leo 'the Lyons Tea of Irish politics'.