Understanding MOLs motivation for a takeover is telling of a lot of tales and potentially shows where the weaknesses in the FR model are plus the lengths FR will go to wipe out the the potential theats...
- A strong brand in its home territory who has managed costs to be competitive against FR who's sole USP is price - hence when the FR model cannot wipe this out, or make the yield required in competing markets, the easiest thing is to use your cash reserves to take it over hence oliminate the threat
- I believe that FR struggle on some routes against EI and EIR, e.g. Bristol, etc. FR cannot penetrate EI to the extent where EI cannot manage due to EI reasonable cost base, and ability to use interconnetions.
- EIR, through the EI branding can compete and win in commuter markets where 738 cannot fit in terms of their size, this issue will not go away and 'linking up' with BE is a very clever attempt to disarm a competitor that they cannot penetrate on thin regional routes.
My view is that a FR take over of EI is a complete disaster if it happens, FR's long terms goal is to wipe out all threats and the long game is to control Irish Avation and Irish airports, namely DUB. If USA routes were FRs interest, they could have went off and spent a hell of a lot less in developing their own.
The net effect for the Island of Ireland (ROI & NI) will be a loss of jobs, jobs will go abroad, NI base closed and potentially service go to UK airlines ie BA on London, where their crew are London based. Plus an impact on tourism, why would FR grow from airport with higher costs than many of the EU alternatives.
This 3 year deal on EI routes is for a short time and after that period the question is what will happen then? Is the EU thinking about the long run or only the next 3 years. Very short sighted me thinks...
EI-BUD