Ryanair makes 'non-binding' offer for Alitalia

jjbrien

http://www.bbc.com/news/business-40706103

Budget airline Ryanair says it has made a "non-binding offer" for loss-making Italian carrier Alitalia.
In May, Alitalia filed to be put into special administration for the second time since 2008. It will now be restructured, sold off or wound up.
On Friday, Italian media reports said Alitalia had received about 10 non-binding offers.
"We are serious in indicating we have an interest in Alitalia," said Ryanair chief executive Michael O'Leary.
He added: "But we are also serious in that our interest in Alitalia is only... if there was a significant restructuring so that Alitalia could reasonably be seen to operate on a profitable basis."
Mr O'Leary also said there would need to be "an absence of Italian government interference".
October deadline
The Italian government has ruled out renationalising Alitalia, which was privatised and relaunched nine years ago after filing for bankruptcy in 2007.
The government said in May that it would provide a bridging loan to keep the airline's planes flying for about another six months.
About 18 firms initially interested in a potential purchase were reportedly given access to Alitalia's financial figures, and non-binding offers had to be submitted by the end of last week.
Those interested in making binding offers have until October to do so.
However, if no buyer comes forward then administrators will be faced with the prospect of winding up Alitalia, which is 49%-owned by Gulf airline Etihad.

Interesting to see if Ryanair actually gets to go ahead with this. Cant see Etihad allowing it however

Dardania

You'd have to wonder why they wanted access. Maybe to have inside knowledge on a competitor (so they know what the successful bidder is buying?) I really suspect their intentions are not honourable here...

They haven't often grown through acquisition - there was a UK airline about 10 years ago is the only instance I can think of?

finisklin

They would probably sell off long haul business if successful. The prize is the internal market where aer italia fly 36m passengers a year.

Hard to see the Italian unions or government letting Ryanair in though.

Interesting bid all the same.

jjbrien

Dardania wrote: »

You'd have to wonder why they wanted access. Maybe to have inside knowledge on a competitor (so they know what the successful bidder is buying?) I really suspect their intentions are not honourable here...

They haven't often grown through acquisition - there was a UK airline about 10 years ago is the only instance I can think of?

Think it was Buzz they bought and absorbed into Ryanair. Easyjet purchased GO from BA around the same time.

Mebuntu

On the face of it this can't be a serious bid. Everything in Alitalia is an anathema to Ryanair's view of how business should be run.

Firstly, there's a long-embedded infestation of intransigent unions in Alitalia. They would have to be got rid of first followed by the redundancy of thousands of the bloated staff numbers. Followed by a complete removal of all the usual ludicrous legacy airline work practices and introduction of outsourcing. Part of Ryanair' success has been it's ability to promptly change with the times without all the baggage of the above.

Then there is the fleet which, I think, nowadays, is almost entirely Airbus except for a few 777's.

I just could not see it working.

Fattes

Mebuntu wrote: »

Look again! Short haul fleet sold or leased, long haul 777 kept and maybe even increased. Ryanair has a big order book for new planes and future capacity it can add.

Now look at the present, Rome has become Ryanair's first transfer hub this summer with DUB and STN to follow!

So FR could strip the airline, replace short haul with Ryanair planes, brand etc. Then use Rome hub for connecting long haul with low cost using Alitalia brand!

May seem far fetched but also very possible

Dardania

Fattes wrote: »

Look again! Short haul fleet sold or leased, long haul 777 kept and maybe even increased. Ryanair has a big order book for new planes and future capacity it can add.

Now look at the present, Rome has become Ryanair's first transfer hub this summer with DUB and STN to follow!

So FR could strip the airline, replace short haul with Ryanair planes, brand etc. Then use Rome hub for connecting long haul with low cost using Alitalia brand!

May seem far fetched but also very possible

Not a bad plan... Maybe Ethiad would keep the short haul network (which they can use for their connections in Europe) and Ryanair keep the longhaul, to counter Norwegian et al.?

gordongekko

Pretty much every big airline put in a non binding bid.

Fattes

Dardania wrote: »

Not a bad plan... Maybe Ethiad would keep the short haul network (which they can use for their connections in Europe) and Ryanair keep the longhaul, to counter Norwegian et al.?

Sounded crazy in my head earlier but then the more I thought about it linked with current Ryanair activity it seemed more sane?

Not sure where the 70 odd A319, 320 & 321 will go.

10/12 777 would give FR some serious clout on low cost long haul routes, 2 in Dublin 6 in STN and the rest in Rome!

jjbrien

Fattes wrote: »

Sounded crazy in my head earlier but then the more I thought about it linked with current Ryanair activity it seemed more sane?

Not sure where the 70 odd A319, 320 & 321 will go.

10/12 777 would give FR some serious clout on low cost long haul routes, 2 in Dublin 6 in STN and the rest in Rome!

Is there not a cheaper way to get some long haul aircraft :eek:

Fattes

jjbrien wrote: »

Is there not a cheaper way to get some long haul aircraft :eek:

Yep, but show me a cheaper way to buy a brand, with 36million customers,slots at Heathrow, and all of this after after the liquidator has done all the dirty work and removed all the legacy staff!

All done while protecting the core brand

A319er

Not too sure AZ own many aircraft , all leased with EI -xxx regs
Also believe Ethiad now own the slots at LHR , and all the buildings in the airports around Italy

However the customer base well FR can pick that all up very quickly
Already have most of it,

There are 2 reasons FR might have for buying AZ

1 closing it down overnight
2 access to the few monopoly routes not currently available to them

Maybe I am a cynic

marno21

A319er wrote: »

Not too sure AZ own many aircraft , all leased with EI -xxx regs
Also believe Ethiad now own the slots at LHR , and all the buildings in the airports around Italy

However the customer base well FR can pick that all up very quickly
Already have most of it,

There are 2 reasons FR might have for buying AZ

1 closing it down overnight
2 access to the few monopoly routes not currently available to them

Maybe I am a cynic

AFAIK Alitalia own neither planes nor LHR slots, they are all leased (as you say hence the EI- regs), so this can't be Ryanair's motivation for buying them

L1011

Dardania wrote: »

You'd have to wonder why they wanted access. Maybe to have inside knowledge on a competitor (so they know what the successful bidder is buying?) I really suspect their intentions are not honourable here...

They haven't often grown through acquisition - there was a UK airline about 10 years ago is the only instance I can think of?

That's Buzz you're thinking of.

They also bought London European a lot earlier

J.pilkington

I can't see Ryanair buying a large ex national airline and "shutting it down overnight" or anything like that which would lead to 15k job losses. Italian people are some of the most passionate and patriotic people I know, it would be business / PR suicide for Ryanair in Italy, not even MOL is that stupid.

I think some of ye have been watching too much of Gordon gekko lately!

Fattes

A319er wrote: »

Not too sure AZ own many aircraft , all leased with EI -xxx regs
Also believe Ethiad now own the slots at LHR , and all the buildings in the airports around Italy

However the customer base well FR can pick that all up very quickly
Already have most of it,

There are 2 reasons FR might have for buying AZ

1 closing it down overnight
2 access to the few monopoly routes not currently available to them

Maybe I am a cynic

Cheers for the info didn't know Atalia didn't own the LHR slots, and leased the big birds.

As for point 2 that's pretty much what everyone is after Alitalia for 😂

Dardania

As an earlier poster put it, maybe also the internal Italian flights could be a big part of it

Tabnabs

Around 10 interested airlines have put similar bids in.

Seems the main reason is:

The expression of interest by Etihad and others does not necessarily equate to a desire to take the airline on as a going concern, according to John Strickland, an aviation analyst at the London-based JLS ­Consulting.

“Airlines may well bid on a defensive basis to obtain information as part of the process and to stake a claim to the parts they may be interested in,” Mr Strickland said. “It is not likely that any airline would have any interest in the entirety of Alitalia as it stands today with its legacy of challenges.”

https://www.thenational.ae/business/aviation/etihad-submits-non-binding-offer-for-alitalia-1.613209

smurfjed

I have an Italian colleague who was made redundant by Alitalia, the union agreement was that they would receive a lump sum plus a full salary for 18 months, based on this i would be extremely surprised if MOL would have any interest in fighting against Italian unions.

J.pilkington

smurfjed wrote: »

I have an Italian colleague who was made redundant by Alitalia, the union agreement was that they would receive a lump sum plus a full salary for 18 months, based on this i would be extremely surprised if MOL would have any interest in fighting against Italian unions.

That's a different issue, your colleague received a generous payment to leave quietly just like plenty of aer lingus staff received very very generous payments over the years.

If the plan is to come in and shut it / sections down then they only get a fraction / statutory

fr336

https://www.theguardian.com/business/2017/sep/14/ryanair-preparing-takeover-bid-alitalia-michael-oleary

LiamaDelta

One of the main reasons that competitors seek to 'put in a bid' is that in order to do so they get access to plenty of otherwise tightly held information on particular routes, loads, profitability etc.

Sullysark

I find it very surprising IAG haven't made a stronger move, it fits into their portfolio quite nicely and would be line what they've done previously.

goingnowhere

marno21 wrote: »

AFAIK Alitalia own neither planes nor LHR slots, they are all leased (as you say hence the EI- regs), so this can't be Ryanair's motivation for buying them

But they have to use of them today...

While Alitalia don't own most of its fleet, they have them fueled up and flying, you won't find 70 short haul aircraft on a EU reg lying around quickly.

Doltanian

I hope Ryanair takes over Aliitalia takes on the Latin and South American routees and there is some serious profits there and to Fly to Brazil or Argentina is priced far higher than it should be.

john boye

Big rumours today of AZ moving their LHR flights to STN from March next year.

jjbrien

john boye wrote: »

Big rumours today of AZ moving their LHR flights to STN from March next year.

Be a bad move that one STN is the armpit of London airports.

Locker10a

john boye wrote: »

Big rumours today of AZ moving their LHR flights to STN from March next year.

Stupid move for AZ, means they'll go head to head with EZY, and possibly FR. Where's they can offer an "advantage" in operating to LHR, it's a premium route

munchkin_utd

Locker10a wrote: »

Stupid move for AZ, means they'll go head to head with EZY, and possibly FR. Where's they can offer an "advantage" in operating to LHR, it's a premium route

Isnt it the case though that Ethiad own the slots meaning its their call and not Alitalia ?

john boye

Yes the LHR slots were leased back to AZ by Etihad. Guess Etihad want to use them themselves now, or lease them to someone else. AZ wanted to switch to LGW but couldn't get their desired slots. STN is a pretty poor alternative though. Note that they still fly to LCY

jjbrien

john boye wrote: »

Yes the LHR slots were leased back to AZ by Etihad. Guess Etihad want to use them themselves now, or lease them to someone else. AZ wanted to switch to LGW but couldn't get their desired slots. STN is a pretty poor alternative though. Note that they still fly to LCY

Issue is Delta dont fly into LGW or STN AZ does a lot of transfer business to Delta at LHR. Maybe Delta might trow their hat into the ring as it means a major loss for skyteam in Europe.