Ryanair to be Forced to Sell 1/2 it's Stake in Aer Lingus

Shamrock231

http://www.independent.co.uk/news/business/news/ryanairs-dream-to-be-grounded-watchdog-poised-to-order-michael-oleary-to-halve-carriers-stake-in-aer-lingus-8632271.html

At last the UK has finally told Ryanair to do what we should have told it to do years ago. They'll be forced to reduce their stake in Aer Lingus down to 15% with this ruling. About time that they stopped interfeering in EI's affairs and let them continue with their work without acting like sore losers. Hopefully this will mean that the EI can now focus more on maintaining its high rate of profitablity instead of trying to fend off takeover bids from Ryanair.

Xenophile

I hope that Ethiad buy the shares that Ryan Air are forced to off load.

Jhcx

Xenophile wrote: »

I hope that Ethiad buy the shares that Ryan Air are forced to off load.

Would that be good? Etihad could possibly stop EI from ever moving into the eastern market as a bit for its own dominance.
Course I would love to see Etihad buy them would be a decent airline that owns them.

Xenophile

Jhcx wrote: »

Would that be good? Etihad could possibly stop EI from ever moving into the eastern market as a bit for its own dominance.
Course I would love to see Etihad buy them would be a decent airline that owns them.

Aer Lingus for the moment should concentrate on it's core business in Europe and USA. Irish Government should off load its shares to Ethiad now. Would be great to see Ethiad buy the company outright.

wandatowell

Xenophile wrote: »

Aer Lingus for the moment should concentrate on it's core business in Europe and USA. Irish Government should off load its shares to Ethiad now. Would be great to see Ethiad buy the company outright.

Tbh I know nothing about the world of aviation or the airline business,


How would Ethiad buying up Aer Lingus shares be a good thing?

Victor

Xenophile wrote: »

Aer Lingus for the moment should concentrate on it's core business in Europe and USA. Irish Government should off load its shares to Ethiad now. Would be great to see Ethiad buy the company outright.

Maybe I'm out of date, but wouldn't that make Aer Lingus a non-EU airline and it would lose its right to fly between points within the EU?

Xenophile

Victor wrote: »

Maybe I'm out of date, but wouldn't that make Aer Lingus a non-EU airline and it would lose its right to fly between points within the EU?

Hardly likely with Swiss Air operating all around Europe and the U.K. considering a referendum in 2017 to leave the E.U. in 2017, where would that leave British airlines. I think the EU are more interested in safety standards.

Xenophile

wandatowell wrote: »

How would Ethiad buying up Aer Lingus shares be a good thing?

It's a first class brand and would give strong competition to Ryan Air rather than them have the monopoly they are seeking. No need for tax payers investment in Air Lines free up time and money for social and national needs.

ted1

I believe Eithad would use Aer Lingus for the US market as a good few Americans have issues with flying siines that have squiggly writing

JustAddWater

ted1 wrote: »

I believe Eithad would use Aer Lingus for the US market as a good few Americans have issues with flying siines that have squiggly writing

Bouileb

Victor wrote: »

Maybe I'm out of date, but wouldn't that make Aer Lingus a non-EU airline and it would lose its right to fly between points within the EU?

If I recall correctly non EU airlines are not allowed to gain more than 50% control of an EU airline so that would rule Etihad out of buying a majority shareholding in Aer Lingus.

Also I doubt Aer Lingus would venture eastwards anytime soon due to competition it would face from the Middle Eastern Airlines - it's last venture to Dubai never worked out!

Shamrock231

Personally I think the Lufthansa Group would be the best owner for Aer Lingus if it was an airline that was to buy them.

Bouileb

Bouileb wrote: »

If I recall correctly non EU airlines are not allowed to gain more than 50% control of an EU airline so that would rule Etihad out of buying a majority shareholding in Aer Lingus.

Its not specifically an EU thing but instead comes from old worldwide rules on airline ownership and slots etc. This is why we have all these 'alliances' instead on a few big global airlines. Im sure Etihad could form a company structure with aer lingus allowing it to do the EU feeder work for them, but remember, no buyer is in it for philanthropy.

smurfjed

Considering that Etihad seeks to sue just about every bulletin board that posts anything negative about them, and also seeks the name of the actual poster, do you think that this mentality indicates that the company has a good corporate culture that will instil pride and respect in the employees of EI?

EI are doing alright, sell the shares in the open market and let the EI management continue doing what they presently doing

smurfjed

hfallada

Is everyone missing the point here. Aer lingus is no longer a quality airline company compared to a lot of airlines today. Although its profitable because it learned a thing or two off ryanairs business model.

The only good thing about aer lingus to an airline like ethihad is the fact it has heathrow slots. Aer Lingus needs to have shareholders that remember its an Irish airline as the London to Dublin route is extremely important for the Irish economy. A up and coming airline like ethihad could see these slots very important for their growth

A319er

I am a little embarrassed that the UK and IRl are sorting this out
But it is good news

Of course there will be a lengthy appeal process by FR

Ducksie has wasted 100 ,s of millions on this personal vendetta and still is going to waste more millions on legal fees

EY can't buy more than 49% but who knows what there long term strategy is but sorting pensions out reducing Fr influence increasing EY influence is good for EI IMHO

Only the lawyers will be out of a very lucrative business

Shamrock231

hfallada wrote: »

The only good thing about aer lingus to an airline like ethihad is the fact it has heathrow slots. Aer Lingus needs to have shareholders that remember its an Irish airline as the London to Dublin route is extremely important for the Irish economy. A up and coming airline like ethihad could see these slots very important for their growth

I wouldn't say it's the only good thing about them, clearly they're doing a lot right to have one of the highest profit margins of an airline in Europe, but LHR certainly makes them money and that's certainly a worry should Ethihad take them over (49.999999% effectively taking them over), hence why I think the Lufthansa group would be the best group to take over EI should it be an airline, they're already the 2nd biggest holder of slots at LHR, and aren't really looking for more, there's no real overlap in their schedules bar Frankfurt/Munich so this would mean that there'd be no conflict of interests like in the case of Ryanair at the minute.

Kristopherus

Could someone explain How the UK Aviation Authority can impose equity rules on Irish entities?

Shamrock231

Kristopherus wrote: »

Could someone explain How the UK Aviation Authority can impose equity rules on Irish entities?

They can't, all they can say to Ryanair is if you don't sell your stake, you can't fly here anymore. Which seeing as like 25%(?) of Ryanairs business comes from the UK, they're not going to turn around and say "No, we'll keep the shares, bye!". But they can't actually force them to sell them, just make them a threat they can't refuse.

BuffyBot

Maybe I'm out of date, but wouldn't that make Aer Lingus a non-EU airline and it would lose its right to fly between points within the EU?

Not quite. But non-EU companies cannot hold more than 49% of an EU based airline.

I believe Eithad would use Aer Lingus for the US market as a good few Americans have issues with flying siines that have squiggly writing

As Etihad already fly into a couple of US destinations, with more to come, I doubt that's an issue. I doubt Etihad is running empty aircraft there for the fun of it. Anyone flying from the US in the direction of the Middle East would most likely be using a Middle-East airline at some point in their journey, and visiting that region (you don't transit in the middle East for the most part from the USA unless you're going very much the long way round). As such "squiggly lines" probably wouldn't upset them to much.

Personally I think the Lufthansa Group would be the best owner for Aer Lingus if it was an airline that was to buy them.

That just won't happen.

Jhcx

The preclearence would be a boost for Etihad having all their guests connecting on through Dub. kind of an incentive i think

Shamrock231

Jhcx wrote: »

The preclearence would be a boost for Etihad having all their guests connecting on through Dub. kind of an incentive i think

Not really if they have to stop over because of it. If they were stopping over anyways then it'd make sense, but to stop over just to clear it wouldn't make sense, they may as well just clear it on arrival...

Kristopherus

Shamrock231 wrote: »

They can't, all they can say to Ryanair is if you don't sell your stake, you can't fly here anymore. Which seeing as like 25%(?) of Ryanairs business comes from the UK, they're not going to turn around and say "No, we'll keep the shares, bye!". But they can't actually force them to sell them, just make them a threat they can't refuse.

Blackmail would be my term for that modus operandi:(.

Shamrock231

Kristopherus wrote: »

Blackmail would be my term for that modus operandi:(.

Not really, if Ryanair don't want to play by the competition rules in the UK, then they don't fly into the UK, simples. That is the law. Just like saying that if you steal/kill you go to jail, it's not blackmail, it's the law, the rules you agree to obey if you want live in a place that doesn't allow theft/murder...

Sulla Felix

Kristopherus wrote: »

Blackmail would be my term for that modus operandi:(.

Not really. They're not being forced to fly into or out of the UK. It makes them lots of money however so if they want to keep doing it, they have to play by the UK rules.

Xpro

I dont understand why would you want Etihad to buy Aerlingus.
Just pure silly. National airline, no more:mad:

It wouldn't bother me if Ryanair got a shot at it, at least it will stay irish.

Sulla Felix

Xpro wrote: »

I dont understand why would you want Etihad to buy Aerlingus.
Just pure silly. National airline, no more:mad:

It wouldn't bother me if Ryanair got a shot at it, at least it will stay irish.

Why do we need a national airline, other than for pride?

Shamrock231

Well, I'm proud of Aer Lingus, but it's nothing to do with it being Irish, secondly, if Ryanair took them over, there'd be no Aer Lingus left to be proud of, it'd be shut down ASAP.

Technoprisoner

there will be some cheap shares to pick up now that ryanair has to sell....also with aerlingus needing to inject in 110 million for the pension fund the share price will probably drop again. surely that cant be good for them as a business

Victor

Technoprisoner wrote: »

also with aerlingus needing to inject in 110 million for the pension fund the share price will probably drop again. surely that cant be good for them as a business

I imagine that has long been priced into the share price.

Shamrock231

Looking at the stock price at the minute it hit €1.60 there for a point last week. Looks like Ryanair's takeover bid may have set in progress a very big rise in share price, seeing as that's now more than 60% over the value when they launched their bid there a while back. That may well have been the intended effect they were looking for...

homerjay2005

Shamrock231 wrote: »

Well, I'm proud of Aer Lingus, but it's nothing to do with it being Irish, secondly, if Ryanair took them over, there'd be no Aer Lingus left to be proud of, it'd be shut down ASAP.

whats there to be proud of with Aer Lingus?

seeing as Ryanair is much more successful, profitable and anything else you can imagine, why are you not proud of them?

Shamrock231

homerjay2005 wrote: »

whats there to be proud of with Aer Lingus?

seeing as Ryanair is much more successful, profitable and anything else you can imagine, why are you not proud of them?

Never said I wasn't, I'm also certainly proud of certain aspects of Ryanair, they've brought great revolutions to air travel in Europe, making it accessible to many. That being said, I'm also extremely ashamed of the way they treat their staff, and on reflection, that shame outweighs the pride I'd take in an Irish company that has done so much for air travel.

What's there to be proud of with Aer Lingus? Well Aer Lingus has one of the highest profit margins of airlines in Europe, and is one of only 3 legacy airlines in Europe that is profitable on short haul routes, that's something to be proud of.

homerjay2005

Shamrock231 wrote: »

What's there to be proud of with Aer Lingus? Well Aer Lingus has one of the highest profit margins of airlines in Europe, and is one of only 3 legacy airlines in Europe that is profitable on short haul routes, that's something to be proud of.

only profitable in recent years, you going to ignore the millions and millions it lost prior to this?

as regards how they treat their staff, im pretty sure they are breaking no laws and are paying them fairly. there is no obligation for Ryanair staff to work there, if they are not happy, they can go elsewhere.

Mikehaw

Xenophile wrote: »

Hardly likely with Swiss Air operating all around Europe and the U.K. considering a referendum in 2017 to leave the E.U. in 2017, where would that leave British airlines. I think the EU are more interested in safety standards.

What has Swiss air got to do with anything, they are not in the eu so eu law does not apply to them. Ireland is in the eu therefore eu law applies

Peregrine

homerjay2005 wrote: »

only profitable in recent years, you going to ignore the millions and millions it lost prior to this?

as regards how they treat their staff, im pretty sure they are breaking no laws and are paying them fairly. there is no obligation for Ryanair staff to work there, if they are not happy, they can go elsewhere.

And there is no obligation for anyone to be proud of Ryanair. He never said they were treating their staff illegally, but he still disapproves of how they treat them. So do I and many other people.

I also am quite proud of some things Ryanair achieved but I still disagree with a lot of their ways.

Mikehaw

Technoprisoner wrote: »

there will be some cheap shares to pick up now that ryanair has to sell....also with aerlingus needing to inject in 110 million for the pension fund the share price will probably drop again. surely that cant be good for them as a business

I would have thought that the 110 pension number is a good one for aer lingus, I bet behind closed doors they had feared a bigger figure. They were never going to get away without paying anything. I'm sure the market had priced this in too

Shamrock231

homerjay2005 wrote: »

only profitable in recent years, you going to ignore the millions and millions it lost prior to this?

as regards how they treat their staff, im pretty sure they are breaking no laws and are paying them fairly. there is no obligation for Ryanair staff to work there, if they are not happy, they can go elsewhere.

On the first point, looking back over the accounts it looks like the years of profit have outweighed the years of loss, indeed there were heavy losses a number of years ago, but if we look at the profit/loss after tax for the last 10 years:

2003: Profit 69.2m
2004: Profit 1.2m
2005: Profit 72.4m
2006: Loss 69.9m
2007: Profit 105.3m
2008: Loss 109.9m
2009: Loss 130.1m
2010: Profit 43.0m
2011: Profit 71.2m
2012: Profit 34.1m

That's 7/10 years in Profit, 3/10 years in losses.
That's also a total loss of 309.9m versus a total profit of 396.4m in profit, or 86.4m in profit over the past 10 years.

So on that front I think they're fine, very heavy losses some years, but in the overall scheme of things, they're pretty profitable as airlines go.

On the second point, call me old fashioned, but I think people;
1.) Shouldn't have to pay to get a job, and
2.) Should be paid for all the work they do, not just some of it. Preflight paper work, turning the aircraft around, boarding passengers, waiting on the ramp during delays, that's work, and in my book you should get payed for doing it. I also believe that good employers have things such as sick leave, payed holidays and maternity leave, but maybe I'm just old fashioned about these sorts of things... The fact that Ryanair are being investigated in a number of countries over their employment setup would say to me that they may well not be legal. Simply put, when the company requires your time they should pay you for it, things like unpaid home standby are fine, but if you're sitting in an airport for 10 hours in case someone calls in sick, then you should be paid, as you're there on the companies request.
3.) I don't think people should have to pay for things such as uniforms or company IDs... If these are needed to carry out your job, then they should be provided to you. Fine, have a fee to replace them if you damage or lose them, but you should be given them when you start without being charged.

Just my €0.02.

brandon_flowers

Once the Irish government don't buy the shares in EI everything will be OK.

Most of the loss years above were the difficult period in which Dermot Mannion was in charge, I don't think he could have faired much better given Willie Walsh was just shafted out by Bertie and the unions. EI was always going to have to be floated and they just made it more painful by delaying the process.

I think Etihad will buy them and maybe increase the number of codeshares TA using pre-clearance but EI will still operate as a separate entity for a long time to come unless the start losing money at an alarming rate.

ted1

BuffyBot wrote: »

As Etihad already fly into a couple of US destinations, with more to come, I doubt that's an issue. I doubt Etihad is running empty aircraft there for the fun of it. Anyone flying from the US in the direction of the Middle East would most likely be using a Middle-East airline at some point in their journey, and visiting that region (you don't transit in the middle East for the most part from the USA unless you're going very much the long way round). As such "squiggly lines" probably wouldn't upset them to much.



That just won't happen.

But they have plans to fly between Europe and America not just to the Middle East.

I was told by a top tourism insider that they would see an distinct advantage with using a friendlier logo like the shamrock than going with what is considered in the US to be a Muslim airline.

DubDani

If Etihad really wanted to buy a big Stake in Aer Lingus they could always use their European "Partner" Air Berlin to make the purchase, and effectively get around that EU/Non-EU stake holding limitation.

homerjay2005

Shamrock231 wrote: »

That's also a total loss of 307.8m versus a total profit of 435.3m in profit, or 127.5m in profit over the past 10 years.

figures can be turned around anyway that suits. likewise i can say they lost 100million in 4 years.

where did you get those figures by the way, cant recall them making 105million profit during the bad years, but open to correction there.

by the way, where will the pension deficit be paid from?

Shamrock231

homerjay2005 wrote: »

figures can be turned around anyway that suits. likewise i can say they lost 100million in 4 years.

where did you get those figures by the way, cant recall them making 105million profit during the bad years, but open to correction there.

by the way, where will the pension deficit be paid from?

Indeed they can, and of course you can say that, but earlier you stated that they'd only recently been making profits and that that didn't make up for the years of losses, so I decided to post up that data, showing a mid-term range of time, and that they'd made an overall profit for that period.

http://corporate.aerlingus.com/media/corporateaerlinguscom/content/pdfs/Key_annual_historic_data_2006_to_2012.pdf
And page 2 of this document:
http://www.aerlingus.com/Corporate/Current_Report/AL_AnnualReport2005.pdf

Those two documents should give you all the data I have above and if you want more there's plenty of interesting info on http://corporate.aerlingus.com/investorrelations/

Pension will likely be paid from the cash reserves they have. Their current reserves in cash are almost next to 1 billion euro, so they're very liquid.

Shamrock231

Just for the craic, I'm going to go back as far as I can here with the data provided:

1998: Profit 68.7m (£)
1999: Profit 55.4m
2000: Profit 71.6m
2001: Loss 139.9m - (9/11 obviously having a major effect on air travel this year)
2002: Profit 35.3m
2003: Profit 69.2m
2004: Profit 1.2m
2005: Profit 72.4m
2006: Loss 69.9m
2007: Profit 105.3m
2008: Loss 109.9m
2009: Loss 130.1m
2010: Profit 43.0m
2011: Profit 71.2m
2012: Profit 34.1m

So that is out of the last 14 years, 4 had a loss, 10 had a profit.
There was a total loss of €449.8m.
There were total profits of €627.4m
That makes for a profit over the 14 year period of €177.6m (Taking a 1:1 ratio on the old punt to euro, really the profit was greater, but for simplicity's sake I just switched it like that.)

So hopefully all this info puts to rest the notion that Aer Lingus is/was some loss making semi-state and is/was infact a well run company.

Interesting looking back, when the losses came, they were always BIG, there wasn't a single small loss there...

Anyways, all above info can be found on the Aer Lingus Investor Relations section of their website here http://corporate.aerlingus.com/investorrelations/ if anyone wants to look it up for themselves...

Suasdaguna1

DubDani wrote: »

If Etihad really wanted to buy a big Stake in Aer Lingus they could always use their European "Partner" Air Berlin to make the purchase, and effectively get around that EU/Non-EU stake holding limitation.

I'll buy that....

Peregrine

Lads..

I say we all just chip in and buy Ryanair's 30% and the gubbermint's 25%

No more of this take over and who's buying more shares crap

hardCopy

Would it really be possible for another carrier to buy EI for their Heathrow slots, seeing as they use a dedicated Irish/Domestic terminal?

seanmacc

Shamrock231 wrote: »

Interesting looking back, when the losses came, they were always BIG, there wasn't a single small loss there...

Anyways, all above info can be found on the Aer Lingus Investor Relations section of their website here http://corporate.aerlingus.com/investorrelations/ if anyone wants to look it up for themselves...

They would be years of stock market crashes.

Its interesting though how they still made a profit in the year of the ash cloud.

I reckon the state should buy back the stake. If anything its a good investment. The Heathrow slot are extremely important for the economy here, its not just about passengers but air freight. Heathrow is Europes biggest hub and Ireland biggest link to the Far East and the Middle East. Another airline could flog them off for a song. An increased interest by the state could mean that the government could steer the company to maintain and may make new routes for the benefit of the state and the economy rather than trying to make a quick buck for shareholders.

How's that vital link to the West coast of the U.S coming along Mr. Varadkar?

Shamrock231

Nimrod 7 wrote: »

Lads..

I say we all just chip in and buy Ryanair's 30% and the gubbermint's 25%

No more of this take over and who's buying more shares crap

I'm in, I've a fiver, a couple of coins, and a prize bond, think that'll cut it?

Seriously though, don't the Aer Lingus Pilots own a 12% chunk of EI, could we see them expanding their share of the company? Now that'd be something very interesting, a co-operative airline owned and run by its staff... :pac:

Amirani

seanmacc wrote: »

They would be years of stock market crashes.

Its interesting though how they still made a profit in the year of the ash cloud.

I reckon the state should buy back the stake. If anything its a good investment. The Heathrow slot are extremely important for the economy here, its not just about passengers but air freight. Heathrow is Europes biggest hub and Ireland biggest link to the Far East and the Middle East. Another airline could flog them off for a song. An increased interest by the state could mean that the government could steer the company to maintain and may make new routes for the benefit of the state and the economy rather than trying to make a quick buck for shareholders.

Not a chance this could ever happen.

Shamrock231

Interesting idea of renationalisation, I'm not sure how it'd work though, I mean, it'd be a very safe bet for Aer Lingus, they wouldn't have their LHR slots sold off by someone else, or just shut down as would be the case if Ryanair got their hands on it. Who knows, maybe if SF get in next time could we see them re-nationalising Aer Lingus? It'd certainly make the country money going by that historical data...