Goodbye Aer Lingus

54and56

Quin_Dub wrote: »

Can we assume that you both think the Sale is a good idea in the long term?


I get where you are coming from Graham - Aer Lingus are currently profitable , but they weren't for years and given the consolidation going on in the Airline Industry there is absolutely no guarantee that a small regional airline would remain profitable in the future..

So, get while the going is good , sell it at a premium whilst it's profitable and reap the short term rewards of the cash and the long term rewards of having one of the largest Airlines in the world running the show...

Yes I'm in favour of selling as I believe the market conditions are right and may not be right again for a very long time.

Getting a PE of 18 on a business which has traditionally struggled to be profitable, is unionised, has an ageing fleet which will require significant investment and has one of the most aggressive and successful competitors in the global market (Ryanair) to contend with who are also planning to expand into the trans Atlantic market is IMHO a serious result.

I just couldn't understand what point Graham was trying to make.

I thought he thought a 5% yield or 18 times earnings is a poor deal whereas I think it's actually amazing given the reasons I've listed above and I wanted to understand his POV.

I think myself and Graham are on the same page, at least I hope we are

northknife

Quote:
Originally Posted by northknife
In a few years time, I sense that there will be very little trans Atlantic flights from Ireland and it will all be connecting flights from the U.K.
That doesn't even make sense. Why do you think this takeover would lead to that?


I hope I'm wrong, but I just see Dublin, Cork and Shannon being used as regional airports in the future and the bigger long haul aircraft based in the larger U.K. airports.
I understand that we have the pre clearance for the U.S. here but I don't think that that alone will keep the trans Atlantic flights here.
The last couple of times I flew to the U.S. immigration in Dublin was a bigger pain than clearing the other side.

Quin_Dub

northknife wrote: »

I hope I'm wrong, but I just see Dublin, Cork and Shannon being used as regional airports in the future and the bigger long haul aircraft based in the larger U.K. airports.
I understand that we have the pre clearance for the U.S. here but I don't think that that alone will keep the trans Atlantic flights here.
The last couple of times I flew to the U.S. immigration in Dublin was a bigger pain than clearing the other side.

I don't think it will happen to be honest... If anything they'll look to increase the volume of flights out of Ireland going west..


It's something that Aer-Lingus should have been doing but didn't have the money or the connected traffic volumes to do.

Aer-Lingus and the Irish airports will become the west-bound hub for IAG.

IAG will bounce flights through Dublin and Shannon with a view to flying direct to secondary airports in the US saving significant money on landing fees in the main US airports..

Even using the main airports they save money as the "domestic" slots are way cheaper than the international ones..

Also allows them to ease the congestion issues they have at Heathrow by routing larger volumes of West-bound traffic to Ireland rather than having everything transiting through Heathrow..

Would make no economic sense not to use the unique advantage Irish Airports have for Transatlantic travel.

Eugene Norman

In general I think that this is a good idea, at this time.

RayM wrote: »

I'm no fan of privatisation of public utilities, but I've never really understood why the state should own an airline.

Asking why the State ever owned an airline is like asking why the state owned the electricity companies, or telephone lines, or railways. The private capital wasn't there at the time.

54and56

Eugene Norman wrote: »

In general I think that this is a good idea, at this time.





Asking why the State ever owned an airline is like asking why the state owned the electricity companies, or telephone lines, or railways. The private capital wasn't there at the time.

Not sure that's true. Is there any evidence that there was an attempt to raise private capital to fund/start these companies which failed resulting in the Govt stepping in? I might be wrong but I don't think so.

Privately run airlines, railways and telephone companies started in many countries where the Govt restricted it's role to facilitating planning and licencing etc.

awec

northknife wrote: »

The last couple of times I flew to the U.S. immigration in Dublin was a bigger pain than clearing the other side.

Yea but it costs the airlines a lot less because they can fly to the likes of La Guardia instead of JFK with pre-clearance.

There is no pre-clearance in the UK.

joeysoap

IAG must be laughing. They bid for Aer Lingus in euros, the euro tanks, saving them 20% of their initial offer.

I have no views on the Heathrow slots. Along with a lot of others travelling to London (recreation only in my case) I would seldom find myself at Heathrow. However I don't think enough attention is being paid to Aer Lingus staff concerns. Undoubtably when AIG start restructuring, pay scales will be high on their agenda. Afaik there are already a few different pay scales in operation at the company, depending on when staff commenced. Aer Lingus have only paid increments to younger staff once in the past 4 years. (even though when the minister for education was asked about this in relation to teachers saleries a few years ago, he said that to stop increments would result in court cases that the dept of education would in all possabiity lose). Older staff are well paid and have received free shares, but younger staff have their pay frozen for most of the past 4/5 years. My concern is that AIG would regard even these staff as overpaid by their standards. IAG did not pay over 1.3b for the good of Ireland, they paid it in order to maximise profits and take such profits out of the country.

At least we still have one Irish airline left

Eugene Norman

Je_suis_Jean wrote: »

Not sure that's true. Is there any evidence that there was an attempt to raise private capital to fund/start these companies which failed resulting in the Govt stepping in? I might be wrong but I don't think so.

Privately run airlines, railways and telephone companies started in many countries where the Govt restricted it's role to facilitating planning and licencing etc.

Why would the government "raise" or encourage capital to be raised. It either is there or it isn't. Ireland was poor, foreign investors didn't want to know. If private capital was going to do this, it would have done it. However it didn't

That said Aer Lingus was set up before Dublin airport was built and most European counties (and probably US States or cities) spent public money on airports. Then, in the Irish case, WWII intervened.

Would the building of the airport alone have sufficed? Maybe by the fifties but that would have left two decades without some flights to the UK and Europe.

Boom_Bap

Aer Lingus threads have been merged.

jonnny68

The shambles of a government will probably spend the money on the dead duck that is Irish water

JustTheOne

jonnny68 wrote: »

The shambles of a government will probably spend the money on the dead duck that is Irish water

Zzzz

curioser

Bloody hell, that Daly one is some madra, barking like a rottweiler.

54and56

Eugene Norman wrote: »

Why would the government "raise" or encourage capital to be raised.

Apologies if I wasn't clear. I meant was there any failed attempt by private companies to raise to launch an airline or phone company?

curioser

curioser wrote: »

Bloody hell, that Daly one is some madra, barking like a rottweiler.

Maybe a bit harsh on Ms Daly, visually speaking. The canine perspective was was brought about by the sight of the Old English Sheepdog sitting beside her.

joeysoap

Korvanica wrote: »

Already is. Booked flights with them last week, 50 quid cheaper than Ryanair was to the same destination.

Flights I am interested in

Aer Lingus

Tue, Aug 11, 2015
FAO DUB
Mon, Aug 24, 2015

Fare Summary

Departing EUR 80.99
1 Adult 1 x 80.99 Fare p.p. 46.99 Taxes & Charges 34.00
Returning EUR 112.99
1 Adult 1 x 112.99 Fare p.p. 84.99 Taxes & Charges 28.00
Admin fee EUR 14.00 Fare Total EUR 207.98


Ryanair

1. Dublin T1 → Faro
   Tuesday, 11 Aug 2015
   13:05 - 16:00
   
   1 Adult, 107.99 EUR 1 x Adult Fare107.99 EUR
2. 
   Faro → Dublin T1
   Monday, 24 Aug 2015
   16:55 - 19:50
   
   1 Adult, 127.99 EUR 1 x Adult Fare127.99 EUR

Discount Pay by debit card: 235.98 EUR
Pay by credit card / PayPal: 240.70 EUR
Total235.98 EUR


I recently flew Ryanair but you cannot always assume Aer Lingus are more expensive. Guess who I will be booking in August?
edit: took those prices, €56 saving for two of us on A/L (EasyJet now totally out of the question with sterling so high)

eeepaulo

I like the idea of discussing the PE, looking at potential growth, both as an indpendent company and as part of the IAG group, maybe sprinkle in a few broker ratings.

Instead we get a government who knew nothing yesterday, right up until they could appear on primetime without allowing any td's to see the deal, no doubt there are no minutes of any meetings, and it will get railroaded througo the Dail.

A profitable growing company, quick flog it, we have an election to buy

54and56

eeepaulo wrote: »

I like the idea of discussing the PE, looking at potential growth, both as an indpendent company and as part of the IAG group, maybe sprinkle in a few broker ratings.

Didn't the Govt hire IBI Corporate Finance and Credit Suisse to assess the offer and they issued their report confirming the proposed deal = good value for shareholders? Maybe the report hasn't been made public yet (why should it?) but don't forget the Govt isn't the largest shareholder. If M O'Leary goes for the deal and other shareholders go for the deal isn't that validation that the amount offered is attractive Vs the alternative of holding and investing in what would continue to be a small regional unionised airline dwarfed by it's largest competitor Ryanair who have announced plans to compete on the transatlantic routes and will result in downward pressure on prices and margins for Aer Lingus going forward.

eeepaulo

Je_suis_Jean wrote: »

Didn't the Govt hire IBI Corporate Finance and Credit Suisse to assess the offer and they issued their report confirming the proposed deal = good value for shareholders? Maybe the report hasn't been made public yet (why should it?) but don't forget the Govt isn't the largest shareholder. If M O'Leary goes for the deal and other shareholders go for the deal isn't that validation that the amount offered is attractive Vs the alternative of holding and investing in what would continue to be a small regional unionised airline dwarfed by it's largest competitor Ryanair who have announced plans to compete on the transatlantic routes and will result in downward pressure on prices and margins for Aer Lingus going forward.

The same credit suisse that have taken a position betting the deal will go through, I'm sure there is a Chinese wall in there.

The share are up on the price when iag made their intentions known but is the bid price considered fair value by the brokers? I would suggest we should look for more than fair value.

What you say is possible, although no one was worried about the future of aerlingus until they wanted to sell. I would say we, as share holders, do not need to invest though, it is a profitable growing company.

The US pre clearance could be worth a fortune, it could be worth more to Ireland by allowing IAG to exploit it.

I would love if it wasn't all done in the backroom and rushed through, what we had on primetime was one letter from the CEO giving vague details.

Stevek101

Korvanica wrote: »

Already is. Booked flights with them last week, 50 quid cheaper than Ryanair was to the same destination.

I hope you know you could of gotten double the difference back if you had of booked with Ryanair and sent them proof of the cheaper fare?

Graham

eeepaulo wrote: »

I would love if it wasn't all done in the backroom and rushed through, what we had on primetime was one letter from the CEO giving vague details.

Probably more by luck than judgment, Aer Lingus is currently profitable and the Unions are keeping quiet. If ever there was a time to sell, now is it.

eeepaulo

Graham wrote: »

Probably more by luck than judgment, Aer Lingus is currently profitable and the Unions are keeping quiet. If ever there was a time to sell, now is it.

We have a company that has either been run well recently or very lucky, that treats it's Irish workforce ok, that is quoted on the iseq, pays tax here, that is competitive.

2 days, was going to put discussion, 2 days notice then sold off, quick paschal that's an asset, we can cash that in.

54and56

eeepaulo wrote: »

The same credit suisse that have taken a position betting the deal will go through, I'm sure there is a Chinese wall in there.

I wouldn't bet on it!! We need better regulation of these enormous financial institutions. I don't agree with any organisation being on both sides of an argument or having players on both sides of a match, it shouldn't happen regardless of Chinese walls or otherwise.

eeepaulo wrote: »

The share are up on the price when iag made their intentions known but is the bid price considered fair value by the brokers? I would suggest we should look for more than fair value.

What type of value do you suggest and why should anyone be prepared to pay more than market value?

If the business was worth more than IAG are offering don't you think the organisation willing to pay more would have stepped forward by now?

eeepaulo wrote: »

What you say is possible, although no one was worried about the future of aerlingus until they wanted to sell. I would say we, as share holders, do not need to invest though, it is a profitable growing company.

It is only recently profitable (it has a long history of losses) and it faces a number of major challenges which on it's own it would find very difficult to deal with.

eeepaulo wrote: »

The US pre clearance could be worth a fortune, it could be worth more to Ireland by allowing IAG to exploit it.

Ireland has had a free run at exploiting US pre clearance for years. what makes you think it could be worth more in the future than it currently is?

eeepaulo wrote: »

I would love if it wasn't all done in the backroom and rushed through, what we had on primetime was one letter from the CEO giving vague details.

It frustrates some people that these decisions aren't made with in the full public glare. The nature of decision making is that we elect our representatives to make decisions on our behalf and when they do that we then give out about it and say it was done in back rooms.

Can you imagine the circus if every statement made and question raised or answered was streamed live on TV and every document published or report commissioned by Govt was instantly published for all to see? It would result in everyone playing to the camera and reports which are totally sanitised for fear of upsetting one interest group or another.

The present democratic system of elected representatives has it's flaws but on balance it is far better than all other systems which have been tried such as dictatorships, communism etc and the various hybrids of same.

54and56

eeepaulo wrote: »

We have a company that has either been run well recently or very lucky, that treats it's Irish workforce ok, that is quoted on the iseq, pays tax here, that is competitive.

2 days, was going to put discussion, 2 days notice then sold off, quick paschal that's an asset, we can cash that in.

That's really funny. It's been debated in detail on here since Jan 24th - http://www.boards.ie/vbulletin/showpost.php?p=93982390&postcount=1

Where are you getting 2 days notice from?

eeepaulo

Je_suis_Jean wrote: »

That's really funny. It's been debated in detail on here since Jan 24th - http://www.boards.ie/vbulletin/showpost.php?p=93982390&postcount=1

Where are you getting 2 days notice from?

The fact that a bid has been made is public, details were given to td's (today)

The email was sent to the whips at 7:43 last night

Of course every statment and document should not be instantly available, but there should be accountability, minutes of meeting? God no.

Paschal went onto rte with just a letter from the ceo, that's probably the limit of paperwork.

Quick get it flogged

Graham

eeepaulo wrote: »

Of course every statment and document should not be instantly available, but there should be accountability, minutes of meeting? God no.

So you agree this shouldn't be immediately available but you're upset because it's not immediately available.

Got it. :rolleyes:

eeepaulo

Graham wrote: »

So you agree this shouldn't be immediately available but you're upset because it's not immediately available.

Got it. :rolleyes:

Do you think it will become available?

Not talking about cabinet minutes, they should remain private, but say the due diligence?Reports into aerlingus potential growth? What departments and ministers said?

We learn nothing.

Do you think it has to be done by tomorrow?

Ryanair have a bigger stake in this than the government. If Ryanair think it's a good deal, I would trust them a whole lot more than the government.
The airline industry is consolidating all over the world. Aer Lingus is not viable on its own in the long term.
Willie Walsh can turn Aer Lingus into a bigger, better airline than it is today and give it a safer long term future.

Graham

eeepaulo wrote: »

Do you think it will become available?

I'm good, not psychic.

eeepaulo wrote: »

Not talking about cabinet minutes, they should remain private, but say the due diligence?

Maybe but I suspect many aspects of due dilligence are commercially sensitive.

eeepaulo wrote: »

We learn nothing.

Who's this 'we'?

eeepaulo wrote: »

Do you think it has to be done by tomorrow?

Probably not, this kind of information generally isn't instantly available

54and56

eeepaulo wrote: »

Do you think it will become available?

Not talking about cabinet minutes, they should remain private, but say the due diligence?Reports into aerlingus potential growth? What departments and ministers said?

Wouldn't KLM Air France just love to get their hands on such commercially sensitive info?? Let's make it all publicly available and then watch as we lose jobs because competitors know the companies strategy and weaknesses etc :rolleyes:

eeepaulo

Je_suis_Jean wrote: »

Wouldn't KLM Air France just love to get their hands on such commercially sensitive info?? Let's make it all publicly available and then watch as we lose jobs because competitors know the companies strategy and weaknesses etc :rolleyes:

Of course every statment and document should not be instantly available, but there should be accountability, minutes of meeting? God no