Ryanair looking to sell Stake in EI to other EU Airline

Shamrock231

http://www.ryanair.com/en/news/ryanair-offers-to-sell-aer-lingus-stake-to-another-eu-airline

Looking at that, that means:

1) They want an airline to buy EI, not investors or a hedge fund, so while that's not exactly what EI management were looking for, at least it won't be liquidated by a hedge fund.

2) This other airline will have to make a full takeover bid for EI.

My guess would be IAG despite them saying they want no involvement, although there would be a bit of a conflict between EI's and BA's Transatlantic networks, and if Ryanair make it their business to damage EI as much as possible, EI are really going to need to rely on a strong TA network and connections to and from it...

The Lufthansa group may be a possibility, but not as likely as IAG IMHO.

I can't see AF/KLM taking them on at the minute.

Any other airline/group in a position to acquire an airline?

L1011

Not a hope in hell this'll be accepted by the UK authorities. It'll be a sale on their conditions, not Micks.

However, I think you're picking this up wrong - they aren't actively selling it to anyone, only suggesting they'll offer it. So there is no pre-arranged deal with IAG, LH, AF/KLM or anyone else at all.

Shamrock231

MYOB wrote: »

However, I think you're picking this up wrong - they aren't actively selling it to anyone, only suggesting they'll offer it. So there is no pre-arranged deal with IAG, LH, AF/KLM or anyone else at all.

Sorry, yes, that's what I actually thought but phrased poorly. The way I read it was if an airline could convince other shareholders to sell them the difference of 50.1%, then Ryanair would sell them their 29% and that the only airlines out there likely either looking or with the means to buy an airline would be IAG, AF/KLM or the LH Group.

Tenger

Another unexpected move by FR....keeping everyone on their toes.

I do wonder however are they selling as they know they may be forced to divest some/all of their shareholding in the future?

And by selling to an airline they ensnare EI in the ambitions and plans of another entity......
....the EI CEO is on record as saying he is not wholly in favour of another airline buying into EI.

Or is it just a bluff to show up the UK competition authority? (I always thought their investigation was a little odd)

urajoke

Hold on let me get this straight this is being done to appease the UK CA. Remind me why the UK CA are interested in an Irish airline buying part or all of an Irish airline!? And why would they be doing it to appease the UK.

Surely it's only of interest to the Irish competition authority and the EU.

Surely they are doing it because they have been blocked and they are getting no where and are doing it simply to get their money back and as usual they are blaming anyone else other than themselves for buying into something that was never going to be allowed because everyone knew they were going to rip Aerlingus apart.

BuffyBot

Ryanair has extensive UK operations, therefore it's of a large interest to the UK authorities. (Mods: I've edited the thread title just to ,make it look like it's not a done deal)

basill

Its the death roll of his bid. He wants to sell on his terms and not to be told by a regulator when and how much of his stake. By making this offer he thinks he might throw them off the scent. Given that the EU saw straight through his last offer (Flybe issuing further profit warnings and is downsizing) then I am sure that the UK Competition Authority will give it their fullest and undivided attention.

Then the lawyers will issue the appeal proceedings and he will get another couple of years of limbo before finally someone delivers him the bad news.

Shamrock231

http://www.independent.ie/business/irish/competition-authority-to-demand-ryanair-sell-stake-in-aer-lingus-29526366.html

Jhcx

I know a few people within Etihad hope that Etihad talk air Berlin into buying the stake .. Personally I would hate for Aer Lingus to be run by another airline.

Shamrock231

http://www.rte.ie/news/2013/0828/470687-ryanair-aer-lingus/

basill

More money for the lawyers, they must be happy. He will no doubt carry on for a while milking the publicity then his pr message will change to read something like AL is a basket case and he wants no further involvement before selling off.

Shamrock231

Yup, he'll manage to claim they're a basket case alright: "Profits are too high!!! The load factors are too high!!! People don't find flying with them a hassle, something must be wrong!!!" :rolleyes:

Shamrock231

On the subject of lawyers, anyone know if EI get's their legal costs back from defending the takeover last year or is a takeover defence different to a normal court case?

basill

Nope it's all wasted cash down the gurgler. Think the CEO said recently during the prelim announement that we had burnt approximately 40m and counting in bid defence costs. Staggering amount given what's going on in the economy as a whole.

Shamrock231

Christ that's more than half of last years profits!!! :eek:

mitosis

How do the UK competition authority get to INSTRUCT an Irish company in its relationship with another Irish company?

Shamrock231

They don't have the authority to instruct them, Ryanair don't have to sell their stake, they're free to keep their stake and instead exit the UK market... :pac: You want to do business in the UK, you play by their rules.

Seeing though as ~25% of Ryanair's business comes from the UK, it's pretty much an instruction.

basill

It's no different to having to observe local labour laws and suchlike in the territories in which you operate. You don't get to pick and choose. Otherwise companies would setup in a "flag of convenience" country and show two fingers, which clearly ain't going to happen.

Tenger

Shamrock231 wrote: »

Christ that's more than half of last years profits!!! :eek:

FR would count that as a success. The more hassle they generate for EI the less able EI are to survive as a "small European regional airline"

Which does however support the UK OFT premise that the FR 29% has an undue influence on the EI operation.....both airlines having to operate under UK rules in the UK market.

dubdaymo

What is difficult to understand here is why neither the Irish Government nor the EU authorities has ever instituted similar inquiries and/or come up with same conclusion. Can someone explain that - leaving aside all prejudices, of course. Surely, if there was a problem with FR having such a large shareholding in EI it would be affecting Irish passengers more so than those in the UK and that action would already have been taken over the past 7 years. There is a big difference between "not liking" FR to have the shareholding and the legality or illegality of it.

Shamrock231

IIRC, the Irish Government asked the UKCC to find against Ryanair and force them to sell. It all comes down to duristiction though, if Ryanair is breaking rules in the UK, that doesn't necessarily mean that they're breaking the rules in Ireland, competition rules differ from country to country. What one country deems unacceptable, another might deem as not ideal.

dubdaymo

Shamrock231 wrote: »

IIRC, the Irish Government asked the UKCC to find against Ryanair and force them to sell. It all comes down to duristiction though, if Ryanair is breaking rules in the UK, that doesn't necessarily mean that they're breaking the rules in Ireland, competition rules differ from country to country. What one country deems unacceptable, another might deem as not ideal.

So, as I suspected, the whole thing is a sham so that the Irish Govt. can sell their EI shares. Nothing to do with fair play at all.

ballooba

Shamrock231 wrote: »

Christ that's more than half of last years profits!!! :eek:

This is a multi-year battle though? Obviously keeping Aer Lingus tied up is worth a lot to them.

basill

If and when Etihad buy up more shares then I do not foresee AL being a small regional airline if it can be called that in any case. Lots of rumours at work of us trying to get our hands on more airframes and flying to exotic destinations through the Middle East. As the CEO has said on many occasions the Irish market is not where our future lies, hence the diverging mix of inbound vs. outbounds.

dubdaymo

basill wrote: »

us trying to get our hands on more airframes

I think it will be more a case of THEM (whoever they might be) getting THEIR hands on EI's Heathrow slots;). Be careful what you wish for.

Shamrock231

http://www.telegraph.co.uk/finance/newsbysector/transport/10274830/Aer-Lingus-held-merger-talks-prior-to-Ryanair-bid.html

Another twist in the story, with this info it looks like the timing of Ryanair's takeover bid was selected so as to sabotage the talks between Aer Lingus and a serious investor airline.

Thanks to PPRuNe for the link.

MuffinsDa

Shamrock231 wrote: »

http://www.telegraph.co.uk/finance/newsbysector/transport/10274830/Aer-Lingus-held-merger-talks-prior-to-Ryanair-bid.html

Another twist in the story, with this info it looks like the timing of Ryanair's takeover bid was selected so as to sabotage the talks between Aer Lingus and a serious investor airline.

Thanks to PPRuNe for the link.

Any idea who were they talking to? One would assume a merger with IAG would face the same competition issues, or am I wrong? The only other potential European contenders would be AF/KLM or DLH - probably Lufthansa group then, especially now that they are rid of BMI?

Shamrock231

I wouldn't say there'd be competition issues with IAG, they only compete on one route with EI. Lufthansa, AF/KL, IAG or Etihad/AirBerlin Group would be only groups that'd come to mind.

MuffinsDa

Shamrock231 wrote: »

I wouldn't say there'd be competition issues with IAG, they only compete on one route with EI. Lufthansa, AF/KL, IAG or Etihad/AirBerlin Group would be only groups that'd come to mind.

Any of them would be good news from consumer point of view I think. But I think AL staying as it is would also be good news too. Is there a business pressure for it to merge? Isn't it sustainable and profitable as it is?

PS: I am going to be pedantic and mention that to my limited knowledge Aer Lingus competes with IAG on three routes probably: DUB/LHR, BFS/LHR, and DUB/MAD. I could be wrong! But it's still a very small number compared to the level of competition with Ryanair, so your point is perfectly valid.

donvito99

Christoph Mueller and MO'L both agree that EI need to partner up to survive.

Shamrock231

MuffinsDa wrote: »

Any of them would be good news from consumer point of view I think. But I think AL staying as it is would also be good news too. Is there a business pressure for it to merge? Isn't it sustainable and profitable as it is?

PS: I am going to be pedantic and mention that to my limited knowledge Aer Lingus competes with IAG on three routes probably: DUB/LHR, BFS/LHR, and DUB/MAD. I could be wrong! But it's still a very small number compared to the level of competition with Ryanair, so your point is perfectly valid.

At the moment it's very profitable, one of only 3 legacy airlines in Europe that's profitable on short haul operations, but you could make cost savings by joining up with another group, similar to what Lufthansa did a few months back with their large aircraft order for Lufthansa, Swiss, Austrian etc. There could also be savings in the area of heavy maintainence and crew training, the ins and outs I'm not sure of.

And correct, I'd forgotten to think about the Belfast route or the Iberia Express route to Dublin, my bad, apologies.

whitebriar

Iberia on the dub mad route offer business class at pretty keen prices,cheaper in fact than club Europe on BA from Dub-Lhr.
The fact,business is offered,on both of those routes,indicates profitability.
Ba anytime I've flown them into Lhr (quite a bit this year)usually have high loads up front and down the back.
They have to be hitting Ei's growth on that route with 8 a day,and if they fly into T5 after T1 closes next year,the transfer bums on seats will probably be growing.

Ei management will need to be looking at strategies to counter that,joining star and feeding BA's competitors seems to me logical.

Jhcx

whitebriar wrote: »

Iberia on the dub mad route offer business class at pretty keen prices,cheaper in fact than club Europe on BA from Dub-Lhr.
The fact,business is offered,on both of those routes,indicates profitability.
Ba anytime I've flown them into Lhr (quite a bit this year)usually have high loads up front and down the back.
They have to be hitting Ei's growth on that route with 8 a day,and if they fly into T5 after T1 closes next year,the transfer bums on seats will probably be growing.

Ei management will need to be looking at strategies to counter that,joining star and feeding BA's competitors seems to me logical.

BA have business on DUB - LHR? I didnt see that when i went onboard the aircraft. still find it crazy that they have 8 flights a day i know 2 of the aircraft come in and depart at the exact same time. how can their be any profitability in that?

L1011

Jhcx wrote: »

BA have business on DUB - LHR? I didnt see that when i went onboard the aircraft. still find it crazy that they have 8 flights a day i know 2 of the aircraft come in and depart at the exact same time. how can their be any profitability in that?

Yes. Middle seat left empty rather than physically missing.

Jhcx

MYOB wrote: »

Yes. Middle seat left empty rather than physically missing.

ahh..

whitebriar

Jhcx wrote: »

BA have business on DUB - LHR? I didnt see that when i went onboard the aircraft. still find it crazy that they have 8 flights a day i know 2 of the aircraft come in and depart at the exact same time. how can their be any profitability in that?

Well,there's 45 mins between the 2 closest flights,other than that,its a pretty good timetable.
Yes Club Europe with a full meal and bar service to the 1st 8 or so rows,curtain pulled .

whitebriar

MYOB wrote: »

Yes. Middle seat left empty rather than physically missing.

Well,it actually screwed thin,so there's no middle seat as such.The crew have a tool to do that.
You get enough of the seat left for storing newspapers and get to use the table.

A319er

Odd schedule for BA two flights at the same time DubLhr, times broadly mirror EI
Cutting schedule back end Octobervto 6 per day , down gauging to all A319 , low demand?

L1011

BA prick around with the Dublin schedule at an unmerciful rate. Don't trust what's up for booking yet, there could easily be more thrown on.

A319er

So true, they have committed to min 6 bar for two weeks when it's 8 a day , deal signed till march 14, mind you I hope they stay only airline in Dublin with empty seats all August for our invols, just love em to death , a godsend ,

whitebriar

A319er wrote: »

Odd schedule for BA two flights at the same time DubLhr, times broadly mirror EI
Cutting schedule back end Octobervto 6 per day , down gauging to all A319 , low demand?

A return to their winter schedule I'd imagine,less holiday makers connecting etc

A319er

Nope two flights less per day plus 4 gauge down shift 320 to 319
Plus only one night stopper means less business choice in am
Mind you they will still struggle as times mirror EI , who have 12 x A320 to LHR ,
And unless BA move Dub flights to T5 they really will struggle,
No lounge at Dublin either , not even a ticket desk , I hope they stay
But customers are always getting messed about , they need a proper
Presence in my opinion, at DUB ,
Good flights for staff ....

whitebriar

They do have a lounge,albeit a shared one.Its a bit better than the old Bmi lounge in that,since they done it up,they connected annalivia to it with a nice new reception at the lifts.
Its still crap though compared to say the flounge in T5 or the galeries club lounges...but typical enough as an out station lounge.
They have a corporate office in Dawson st.

L1011

The lack of consistency in which flights they're going to have operating at a given time is a killer for business traffic - something that also affects Ryanair very badly (desperately trying to haul the thread back on topic). BA would have taken significantly more of EI's regular traffic, especially as many of them would still be OW from the old days, if they didn't do that.

A319er

True sort of confirms BA are not committed to DUB , no prescience , scaling back and always available , shame because the EK TK EY crowd need competition
Still they have bigger markets to target and those ex BMI 319 will go in about ten years !!!

whitebriar

Id agree,they chop and change flights a bit,but I think its a big leap,from that to saying they're pulling out.

A319er

Nope no need to pull out yet, penalties for non use slots at Lhr
Too high they say that new aircraft and then long haul capacity increase will result in continued down sizing, frequency at first , depends on EI signing up to new code share offer and well at the moment they don't need to...
But we'll a war in Syria , further spike in fuel and who knows ...
Probably worth a new thread


Does BA do shorthaul ?
Do they need to ? Lol

Jhcx

Back to Ryanair about to blow up aer lingus or make hell for them before they pull out. It's actually such a pity an American airline doesn't buy ei I have more in mind JetBlue who are quiet successful in low fares yet operate premium quality . Mind u though 129$ for an hour trip ain't low fair but my point is allowing Ei to be their transatlantic carrier wouldn't be too bad I think they could make a good run of it. Works for both airlines dub becomes a feeder hub for ei seen as we're sooo successful on our short haul. And then onto JFK where JetBlue take over. Althought I don't know how the sfo run would work for both. Could still possibly as a direct Europe to west coast .

One can dream right?

A319er

Club yield ex Dub is brutal for BA
Redemption tickets are upto 50% , AA code share is worth nothing yield wise
Given so any and I mean hundreds invols a week dueAA delays
People have no idea how little revenue BA club pax give BA
Code share and alliances are almost bankruptcy material
If AA involved , thank god EI manage code shares based on yield
Rather than volume ie pax numbers
Still BA are big enough to swallow the hit fora weak partner.
Next summer they will loose YYZ and SFO feed to a degree
That just leaves Sth Africa and Ey Ek are pricing into that.

IB business traffic ex Dub is zero, even to Sth America,
It's all students end of story..

BA are missing a chance ex Dub, ten years ago we all went LHr
Now it's via Dxb Fra Ist AUH other than avios or AA invol reroutes
Pity....

whitebriar

B6 have live tv,free snacks and drinks though and they do sales with 49 dollar flights.
I'd agree that would be a peach though.

A319er

Spot on JetBlue or UA
UA and EI really liked the Was Mad link , sweet deal for both sides and they
Got real cosy , code share SFo with Ua next year guarantees success for EI
And more to come. Both CEO s are talking the same message in this
350 is too high spec for East coast Usa ops....