Originally Posted by
pinhammond
To me it looks as if the Irish Government has made this decision on purely political grounds, probably connected with the Irish trade unions. The EI share price is well below the FR offer price. The share price will probably now collapse and those poor staff in the company bought into the company at privatisation will have lost all their investments.
That's an interesting perspective. The EI share price was (naturally) below the FR offer price at the time of the offer and has gone nowhere near it ever since, a clear signal that the market has never believed in the offer. I see no evidence of the price "collapsing" in this morning's trading, presumably because the impending failure of Ryanair's bid doesn't really come as news.
Meanwhile that other Irish airline (FR) which is actually one of the largest and most successful Irish businesses of any sort ever, has the highest market capitilisation of any European airline, has the strongest cash balance of any European airline, is the largest international airline in the world, has the best punctuality record of any large airline in Europe. Need I go on?
Put the two together and make Irish aviation even stronger. Fail to put them together and EI will fade away.
Why on earth the Irish government prefers the failed EI to one of Ireland's greatest successes ever is beyond me.
"Put the two together and make Irish aviation even stronger" - you'll have to explain that one to me.
Imagine that somehow FR gets the green light to take over EI. BA gets the lion's share of the Heathrow slots and flyBE takes on 20 routes out of Ireland (including, incidentally, some longer sectors that really need 150+ seaters rather than E195s). What happens three years down the road? BA shifts most of the Heathrow slots over to more lucrative long-haul, and FR goes after flyBE with aggressive pricing and chases it off most or all of the 20 Irish routes, just as it's doing with Wizz in Cork. Result: the Irish market is then a Ryanair near-monopoly. But consumers should rejoice because "Irish aviation is even stronger"? Tell me again how exactly?
