Agenda, Agenda, Agenda.......
School yard bullying at its best. Ryanair V Aer Lingus. AL Pilots ( Ialpa ) V MOL.
Very tiring.
Some facts, not agenda driven bullying.
ALT is fat, but it can lose weight ( alot of it ). Watch the media in the next 5 days, some of that weight will be shed.
Ryanair is not fat ( Its loan book is! )
AL is cash positive FACT. Ryanair has net debt FACT.
ALT can improve, Ryanair must expand ( Trees dont grow to the sky, look at the Irish property bubble and all the developers gone bust, look at Lehman Brothers..... etc etc )
Expansion in a contracting market is a risky strategy, especially if you're heavily in debt. If things further decline Ryanair may have to further collateralise whats left of its debtless or low debt assets. The interest rates on the borrowings will increase, thereby reducing the ability of the assets to perform. Fares will have to increase, load factor will decrease..... The perfect storm. Yes there is 2.4ish Billion cash on the balance sheet, but MOL has already ( worryingly ) suggested this be allocated to shareholders as a dividend, Why? He had to in order to quell the exodus of shareholders who now realise expansion is over.
Stelios of Easyjet ( perhaps more agenda here ) has stated in public he feels Ryanair has over extended themselves. Take it or leave, may be agenda.
To defend Ialpa's purchase of shares, they have on numerous occasions stated that the purchase was not to make money but to block a hostile takeover by Ryanair ( which has succeeded twice ). I'd imagine ( if the figures mentioned above are correct ) 2 years ALT salary has more than compensated Ialpa members compared to 2 years of a Ryanair salary. Ironically, Ryanair, I'm told is one of the reasons the Pilots pension fund is in better shape than most other pension funds, when it bought ALT shares around the time of the first takeover bid it was compelled to sell a % of its exposure to the ISEQ, they sold the Irish bank shares before their collapse! Ialpa should have sent MOL a bunch of flowers!
Why does Ryanair want, what they continue to call a basket case zombie Airline? My opinon, because its not a basket case, if it were, Ryanair would have commercially destroyed them. ALT has existed in one of Ryanairs biggest bases now for as long as Ryanair has existed. You dont run laps with an Olympian and not get fit yourself.
Ryanair IS a champion business, FACT. They will survive this downturn. MOL may not, the shareholders are getting uncomfortable. Without continuing expansion you need a product with some sort of quality. MOL is unable to deliver that product the Herb did at Southwest.
Expansion in a contracting market has killed many a business.
When the growth is over, the product must be strong.
Following every boom is a bust.
Economics is simple and obvious, believing it, extremely difficult.
Trees don't grow to the sky.
Rds
no slot