Aer Lingus - 5

[BFS101]

Thats s a bit of a shock alright. It was well known that the city break destinations didn't perform from BFS, but believed that ACE and TFS did okay. Can anyone actually confirm these rumors though at this stage, source???

Maybe uneconomical to have an aircraft operating just one route a day, either the TFS or ACE, on top of the LHR. Eek, time will tell... Though I'm keeping my fingers crossed thats is a mistake.

[CallBell]

BFS

Just did a dummy booking on EI.com BFS-ACE for NOV/DEC and encountered no problems... any source for this rumour?

[racedo]

Investor presentation:
http://www.aerlingus.com/Corporate/P...ion_290310.pdf

Slide 26:
"Short haul performance for 2009 is broadly break-even despite significant losses generated by the Gatwick base... Gatwick losses were deemed unacceptable by management"
"Short haul trading in Dublin and Cork was broadly satisfactory"
"While Belfast was loss-making in 2009, it is a new base and is trading on an improving trajectory"
"we are likely to still incur long haul losses in 2010

Interesting that in total for 2008 and 2009 EI will have spent €205 Million in getting rid of staff. The Greenfield plans will cost €77 million but even after that their cost base will be 8% higher than Easy and 92% higher than FR.

Still a long way to go.

[EI320]

Lets not get too carried away with all these "rumours". Obvious troll is obvious.

[tigger2k8]

bit premature of looking at flights for EI after the current summer schedule dont you think?

my prediction for BFS is 2 A320's, one doing LHR runs, the other doing ACE/TFS/AGP and something else

[DannyKelly22]

sounds like a load of bollocks to me. Why would they reduce their operations to just one route that will more than likely go back to being 3xdaily for the winter season. They'll prob go back to 2 based aircraft for the winter and operate London Heathrow Tenerife Malaga and Lanzarote. Thats what they have in the booking engine at the minute. Wouldn't be suprised to see that they consider adding LGW to the schedule too. Maybe 1 rotation per day out early morning back late night. Means they could keep the third aircraft based at BFS and do BFS - LGW - LGW schedule LGW - BFS. Would certainly give EZY a run for their money. This is just a thought not a romour.

[Charlie Roy]

they could keep the third aircraft based at BFS and do BFS - LGW - LGW schedule LGW - BFS

That would suggest a LGW based crew overnighting in BFS. Sounds more hassle than it's worth. Unlikely for 3 reasons:

• Aer Lingus have zero expansion plans for Gatwick
• Belfast to London market has over capacity already
• Easyjet respond to every attack by Aer Lingus

[SKY's4ME]

Somehow I wouldn't regard AL on any Easy route as a ''attack'' more like a blip on Easy's radar! The LGW move by Lingus seemed out of context and has proved to be a misrable drain on its already failing finances.

I have to agree with others that its unlikley AL will just fly a LHR from BFS next winter if this was the case they may as well call it a day at Aldegrove.

[EI Premier]

Interesting that in total for 2008 and 2009 EI will have spent €205 Million in getting rid of staff. The Greenfield plans will cost €77 million but even after that their cost base will be 8% higher than Easy and 92% higher than FR.

Still a long way to go.

Really? A long way to go now as opposed to the writing being on the wall - that has to be an improvement

€11.0 million of those restructuring costs relate to an under provision during 2008. We don't know know if that was a total under provision or if it was because of an adoption of various new/ammended IAS/IFRIC standards. Several sections of the results contain restatements.

We have seen a strong reduction in unit cost per ASK. This will continue during 2010, especially towards Q2 and into Q3. Its quite likely, with stringent fuel hedging having been undertaken, that the unit cost per ASK will decline by at least a further 7.0% - 10.0% in the medium term towards 2012, dependant upon oil prices.

Regarding the cost base. It's great to round up figures when you want to press a certain agenda isn't it?

Post Greenfield: EI - 3.30 EZ - 3.08. Working the maths, that gives a figure of 7.14%, in excess of EZ - EBITDAR (excl. fuel).

Regarding a comparison with FR, that made me laugh! The average cost on the basis above might be as you stated. But, the point is - Aer Lingus can't go around with cap in hand collecting €600 MILLION in subsidies. FR can, for the moment at least. But I await FR results when such subsidies are removed. The figures will be far from pretty then.

Moving onto the issue of Cash, which has always been used a strong indicator of the impending collapse of EI for those who push that agenda.

• There are two aircraft, each with an NBV of €15 million. While we can't assume that NRV will be the equivalent of NBV, a solid €25 million could be generated in a fairly rapid sale.
• Gross Cash remains high at €828.5 million. There has been a decline in total debt of 10.9%.
• The rate of decline in Cash decelerated markedly during M11/M12 2009, with an increase in Gross Cash during Q1, 2010.

On balances, all variables considered, Aer Lingus is moving in a positive direction. The necessary steps have been taken by management to ensure a consolidation of the cost base.

As the statements point out, there is a strong interrelationship between real GDP trends, National Income and demand. It is quite likely that Aer Lingus could see top line revenue growth by Q2, 2011 - when Business travel in particular should have stabilised - with the proviso that we need to see a continuation in the latest global economic trends.

[racedo]

Really? A long way to go now as opposed to the writing being on the wall - that has to be an improvement

€11.0 million of those restructuring costs relate to an under provision during 2008. We don't know know if that was a total under provision or if it was because of an adoption of various new/ammended IAS/IFRIC standards. Several sections of the
results contain restatements.

Its cash out of the business. You can claim it may be as a result of a change in accounting standards but then if it were they would be declaring it. They aren't which pretty much indicates that the underprovided, not unsurprising as the estimate and actuals will rarely tie up that nicely.

We have seen a strong reduction in unit cost per ASK. This will continue during 2010, especially towards Q2 and into Q3. Its quite likely, with stringent fuel hedging having been undertaken, that the unit cost per ASK will decline by at least a further 7.0% - 10.0% in the medium term towards 2012, dependant upon oil prices.

Regarding the cost base. It's great to round up figures when you want to press a certain agenda isn't it?

Post Greenfield: EI - 3.30 EZ - 3.08. Working the maths, that gives a figure of 7.14%, in excess of EZ - EBITDAR (excl. fuel).

Regarding a comparison with FR, that made me laugh! The average cost on the basis above might be as you stated. But, the point is - Aer Lingus can't go around with cap in hand collecting €600 MILLION in subsidies. FR can, for the moment at least. But I await FR results when such subsidies are removed. The figures will be far from pretty then.

Another one of those giving credence to AF claims. Well lets see you support the claims as on the biggest and oldest routes like London - Dublin etc etc they are clearly NOT getting any taxpayers money so therefore based on your supposition there must be airports paying them massive amounts..........can you provide some detail on all these airports.

As for the comparison whether its 7 or 8 is pretty much irrelevant as still way out of line for the pesudo LC operation they claim to be or has this changed again.

Moving onto the issue of Cash, which has always been used a strong indicator of the impending collapse of EI for those who push that agenda.

• There are two aircraft, each with an NBV of €15 million. While we can't assume that NRV will be the equivalent of NBV, a solid €25 million could be generated in a fairly rapid sale.
• Gross Cash remains high at €828.5 million. There has been a decline in total debt of 10.9%.
• The rate of decline in Cash decelerated markedly during M11/M12 2009, with an increase in Gross Cash during Q1, 2010.

EI burned through €300 plus million in 2009, the selling off of 2 aircraft only pays 1/3 of the cost of getting rid of employees based on their estimate of €77 million.

[EI Premier]

ts cash out of the business. You can claim it may be as a result of a change in accounting standards but then if it were they would be declaring it. They aren't which pretty much indicates that the underprovided, not unsurprising as the estimate and actuals will rarely tie up that nicely.

I said that it could be a result of a change. €11 million is obviously material but we don't know what exactly it comprises of, it could just be a clean underprovision. I didn't dispute that it was an outflow.

Another one of those giving credence to AF claims. Well lets see you support the claims as on the biggest and oldest routes like London - Dublin etc etc they are clearly NOT getting any taxpayers money so therefore based on your supposition there must be airports paying them massive amounts..........can you provide some detail on all these airports.

As for the comparison whether its 7 or 8 is pretty much irrelevant as still way out of line for the pesudo LC operation they claim to be or has this changed again.

I'm not privy to the financial statements of Ryanair. I didn't say that it was on every route and obviously they shouldn't be getting a subsidy on a route established for many years that is competitively saturated. Actually 1% does make a difference when you are taking in hundreds of millions of Euro. The post-Greenfield cost base is not way out of line. Comparisons with the likes of FR and EZ are simply not possible, because Aer Lingus offers a mixed business model. A full business class service on Transatlantic routes, various lounges - some operated directly by Aer Lingus. Thankfully, it also doesn't bombard pax with a lottery every few minutes...

Are you disputing that Ryanair are getting several hundred million Euro per annum in subsidies which is adding to top line revenue? They have been doing so for many years. However, let's just take a look at the following case as an example:

2003

Ryanair route hit by subsidy ruling

CHEAP flights to Europe were under threat yesterday after Ryanair was forced to suspend one of its routes.

It had to cancel all flights from London to Strasbourg after a French court decided a subsidy they received was illegal. And the ruling may mean more destinations being scrapped.

Airports such as Bergerac, Limoges, Bologna and Palermo offer Ryanair subsidies to attract more visitors.

The subsidy from the Strasbourg Chamber of Commerce, reported to be worth pounds 1million, was challenged by Air France
in full Compagnie Internationale Air France

Judges ruled it a breach of competition rules which prevent subsidies to airlines using publicly-owned airports. Ryanair has cancelled its flights to Strasbourg from September 24 but plans to appeal.

EI burned through €300 plus million in 2009, the selling off of 2 aircraft only pays 1/3 of the cost of getting rid of employees based on their estimate of €77 million.

Context, context... Some €157 million or 52.3% of this cash burn was once off exceptional Cap Ex. The next A330 which should arrive very soon is being acquired under a long term finance lease.

In addition, while the selling off might only cover 1/3 of the cost, the medium term impact of the reduction in outflows as a result of the generated savings will neutralise the effect and will eventually result in cash conservation.

[racedo]

Are you disputing that Ryanair are getting several hundred million Euro per annum in subsidies which is adding to top line revenue? They have been doing so for many years. However, let's just take a look at the following case as an example:

Yes I am as now you have gone from 600 million to several hundred million yet aside from an Air France claim there is nothing else.

Using the Britair case which AF used to keep their fares high as a basis is pretty lame. IF as you claim they are receiving hundreds of millions then who is paying it.

Quote:
EI burned through €300 plus million in 2009, the selling off of 2 aircraft only pays 1/3 of the cost of getting rid of employees based on their estimate of €77 million.
Context, context... Some €157 million or 52.3% of this cash burn was once off exceptional Cap Ex. The next A330 which should arrive very soon is being acquired under a long term finance lease.

In addition, while the selling off might only cover 1/3 of the cost, the medium term impact of the reduction in outflows as a result of the generated savings will neutralise the effect and will eventually result in cash conservation.

EI had to use cash because as their FD stated they struggled to borrow at normal rates which tells you what the bankers were thinking.

The issue is that EI has burned though 200 Million in 2 years and claims it is getting a payback on it quickly.

On that basis how much exactly were the staff who left paid ?

It will lose money on its LH in 2010 and its not sure of its Winter schedule for SH.

[EI Premier]

Yes I am as now you have gone from 600 million to several hundred million yet aside from an Air France claim there is nothing else.

Using the Britair case which AF used to keep their fares high as a basis is pretty lame. IF as you claim they are receiving hundreds of millions then who is paying it.

Racedo,

I'm not gone from anything. I fully believe that the figure of ~ €600 million is correct. I merely used several hundred million as a figure of speech! Par contre, can you produce information to explicitly show that Ryanair does not receive vast subsidies on an annual basis??

Any search will turn up a myriad of results regarding Ryanair, subsidies and associated disputes, so there is nothing lame at all about the example that I used. It shows perfectly the amount of money in subsidies that was awarded to FR on one route alone. Let's not lose sight of the fact here also that the original point was about Aer Lingus and how they cannot rely on such subsidies like Ryanair does.

Who is paying for it? Local councils and developments authorities etc.. Cases in point include Derry council and the airport authority in Lubeck.

I'm not going to continue to drag this out any further but there is sufficient evidence to support the notion that Ryanair are receiving vast amounts in subsidies, which is contributing to top line revenue figures.

EI had to use cash because as their FD stated they struggled to borrow at normal rates which tells you what the bankers were thinking.

The issue is that EI has burned though 200 Million in 2 years and claims it is getting a payback on it quickly.

On that basis how much exactly were the staff who left paid ?

It will lose money on its LH in 2010 and its not sure of its Winter schedule for SH.

Regardless of why they used cash or not, capital acquisitions were the underlying reason. It's a past historical event. It won't affect future cash flow decisions because EI have deferred the majority of very heavy capital intensive commitments. By the way, who really gives a toss what bankers or analysts were thinking? Their credibility (complete lack of) has been demonstrated quite clearly in the last twelve months.

The outlook remains uncertain for many companies, not just Aer Lingus. Tell me of an airline that is, at the moment, sure of its Winter Schedule for SH. Who can accurately forecast what demand will be like?

In what way is it claiming that its getting payback on the cash burn quickly?

[Kavs8]

Hi guys, i stand corrected! -> EI will be basing 2 a/c at BFS for Winter 2010/2011 serving....

Lanzarote, 4 flights per week
London-Heathrow, 3 times daily
Malaga, 4 flights per week
Tenerife, 3 flights per week

+ Another route to a European destination will either be continued or a new one added for the Tuesday, Thursday, Saturday slot as MUC was dropped.

[Tom the Tenor]

We all had our eye off the ball in the last few days and missed the inaugural flight on Tuesday of the Madrid to Washington Dulles service operated by Aer Lingus on behalf United Airlines. It will be an interesting project to observe. Guess it should do okay. Are the first flight crews seconded out from Dublin or are their American pilots all ready on the line?

The first aeroplane to launch the new flight was EI-LAX for anyone that needs to know.

[dublinaviator]

Originally Posted by EI Premier

Are you disputing that Ryanair are getting several hundred million Euro per annum in subsidies which is adding to top line revenue? They have been doing so for many years. However, let's just take a look at the following case as an example:

2003

Ryanair route hit by subsidy ruling

CHEAP flights to Europe were under threat yesterday after Ryanair was forced to suspend one of its routes.

It had to cancel all flights from London to Strasbourg after a French court decided a subsidy they received was illegal. And the ruling may mean more destinations being scrapped.

Airports such as Bergerac, Limoges, Bologna and Palermo offer Ryanair subsidies to attract more visitors.

The subsidy from the Strasbourg Chamber of Commerce, reported to be worth pounds 1million, was challenged by Air France
in full Compagnie Internationale Air France

Judges ruled it a breach of competition rules which prevent subsidies to airlines using publicly-owned airports. Ryanair has cancelled its flights to Strasbourg from September 24 but plans to appeal.

So what if the €600mln is adding to revenue? That doesn't mean its adding to net profit, because you have to factor in the cost of aircraft, crew, fuel, marketing, fees etc. It costs money to start new routes, and thats what the support funding Ryanair receives goes toward. I mean thats the whole point of these arrangements Ryanair has with airports, if they want new routes Ryanair will give them but they have to share the costs. If costs get too high, and the airport doesn't reduce fees, then Ryanair will pull the routes(as they have done several times) once they become unprofitable. Where these arrangements become illegal and may be considered state aid is when they're offered to 1 airline but not another, they have to be offered to all airlines, so theres nothing to stop any other airline getting the same deal as Ryanair. The only reason other airlines don't get the same deal is because theres not many airlines buying new aircraft and expanding at the rate Ryanair is.

And in relation to the Strasbourg case you selectively quoted, the European Court of First Instance found in 2008 that Ryanair was not in receipt of state aid or subsidies in relation to it's arrangement with Brussels-Charleroi Airport, which Air France claimed was a form of subsidy. The ECFI held that publicly owned airports like Brussels Charleroi were free to enter long-term, discounted arrangements with airlines in return for new route and traffic growth and in so doing, the Court dismissed the EU Commission’s claims that Ryanair’s cost base at Charleroi included State aid or subsidies. So the previous case in relation to Strasbourg is irrelevant.

If you want to talk about state aid, why not mention the €400mln KLM received from Amsterdam Airport last year?



Just more Ryanair-bashing using past cases that were effectively overturned with the 2008 judgement, which you conveniently forgot about...

[EI Premier]

So what if the €600mln is adding to revenue? That doesn't mean its adding to net profit, because you have to factor in the cost of aircraft, crew, fuel, marketing, fees etc. It costs money to start new routes, and thats what the support funding Ryanair receives goes toward. I mean thats the whole point of these arrangements Ryanair has with airports, if they want new routes Ryanair will give them but they have to share the costs. If costs get too high, and the airport doesn't reduce fees, then Ryanair will pull the routes(as they have done several times) once they become unprofitable.

Of course it is adding to both Gross and Net Profit!. Do you really think that Ryanair would commence routes if they were not going to be profitable to them? Of course I am well aware of all the associated costs with starting a new route, but its not difficult is it when you are demanding below norm airport charges (below those charged to competitors operating from the same base at that) and are threatening to pull out if you don't continue to receive them!

Where these arrangements become illegal and may be considered state aid is when they're offered to 1 airline but not another, they have to be offered to all airlines, so theres nothing to stop any other airline getting the same deal as Ryanair. The only reason other airlines don't get the same deal is because theres not many airlines buying new aircraft and expanding at the rate Ryanair is.

I don't seem to hear much about Ryanair buying new aircraft? Any of their deliveries in the recent past are for aircraft that have already been purchased. It was only recently that FR came out with the publicity statement that they were not purchasing another large batch of aircraft because they apparently couldn't reach a deal with manufacturers. If, in reality, there was a viable need for such further expansion and that it was going to be profitable, they would of course have reached a deal! The reality is any such purchase would have a significant negative impact on FR's Gross cash position and as it is they are going to end up with a surplus of aircraft from all of the deliveries.

In addition, its not as if another carrier is going to go into an obscure airport or airbase that already will only have the demand to support one carrier such as FR.

Also, it has been stated that several of these subsidies have been awarded on an annual basis. Are they beginning the same route on an annual basis?? Certainly not!

And in relation to the Strasbourg case you selectively quoted, the European Court of First Instance found in 2008 that Ryanair was not in receipt of state aid or subsidies in relation to it's arrangement with Brussels-Charleroi Airport, which Air France claimed was a form of subsidy. The ECFI held that publicly owned airports like Brussels Charleroi were free to enter long-term, discounted arrangements with airlines in return for new route and traffic growth and in so doing, the Court dismissed the EU Commission’s claims that Ryanair’s cost base at Charleroi included State aid or subsidies. So the previous case in relation to Strasbourg is irrelevant.If you want to talk about state aid, why not mention the €400mln KLM received from Amsterdam Airport last year?

I did not selectively pick any one example. You have selectively quoted what I posted. Read down further and I gave at least two other examples. I will also remind you that my first comments simply related to the fact that its unreasonable to be making any comparisons with the cost base of FR, due to the entirely different nature of its business model, along with the fact that it can rely on a substantial amount of annual subsidies which Aer Lingus simply cannot.

I have no interest in KLM, they are not competing with EI and the topic of discussion here was a comparison of the EI/FR cost base. In any case, is the €400m you mentioned annualised, available per annum? It has been widely reported that FR are receiving €600m, or 33% in excess of the amount that KLM received.

Just more Ryanair-bashing using past cases that were effectively overturned with the 2008 judgement, which you conveniently forgot about...

On the contrary.... just more FR supporting sentiments from you. The bottom line is, that in spite of all of the above comments that you have made, my original point certainly holds true in that it is impossible to make any real or meaningful comparison between the cost base of FR and EI, for the above mentioned reasons.

Also, back to your original point and to honestly suggest that the €600m is not adding to the overall FR net profit..... I mean do you really believe that FR would enter into anything that would result in losses for them, apart from of course their attempted takeover bid in trying to ruin and undermine the share price of EI - which I will remind you that despite resulting in significant write downs in the past 18 months, actually resulted in an upward trend in the Revaluation reserve on FR's books of circa €25 million in the recent past contributing to overall increases in equity as the EI share price has gradually recovered in terms of LRAvg in the past 12 months.

[dublinaviator]

Originally Posted by EI Premier

I don't seem to hear much about Ryanair buying new aircraft? Any of their deliveries in the recent past are for aircraft that have already been purchased. It was only recently that FR came out with the publicity statement that they were not purchasing another large batch of aircraft because they apparently couldn't reach a deal with manufacturers. If, in reality, there was a viable need for such further expansion and that it was going to be profitable, they would of course have reached a deal! The reality is any such purchase would have a significant negative impact on FR's Gross cash position and as it is they are going to end up with a surplus of aircraft from all of the deliveries.

In addition, its not as if another carrier is going to go into an obscure airport or airbase that already will only have the demand to support one carrier such as FR.

Yeh know exactly what I meant. No other European airline is taking on the amount of new aircraft as Ryanair are, and as such are not in a position to expand at the rate they are atm.

And whether or not airlines choose to operate from airports Ryanair operates from is their choice. Just because they don't feel they can compete with Ryanair doesn't make the support schemes any less legal.

Originally Posted by EI Premier

Also, it has been stated that several of these subsidies have been awarded on an annual basis. Are they beginning the same route on an annual basis?? Certainly not!

So what? In that case the schemes offered by the DAA are illegal because they run over a 5-year period.

Originally Posted by EI Premier

I did not selectively pick any one example. You have selectively quoted what I posted. Read down further and I gave at least two other examples. I will also remind you that my first comments simply related to the fact that its unreasonable to be making any comparisons with the cost base of FR, due to the entirely different nature of its business model, along with the fact that it can rely on a substantial amount of annual subsidies which Aer Lingus simply cannot.

I can't find any other examples you posted, but I agree with you, it is unreasonable to compare the 2, but not for the reason you give. Its completely inaccurate and misleading to say Ryanair are only turning a net profit because of the €600mln they receive from different airports. If I was a shareholder in Ryanair and that was the case, I'd sell my shares straight away because these support schemes are not permanent and if Ryanair's profit was down to the support funding they receive, they'd probably be losing hundreds of millions the following year or the year after. So your logic is flawed.

Also theres nothing to stop Aer Lingus operating from the same airports and availing of the same deals as Ryanair get, but they choose not to because thats not the business model they have. Again just because Aer Lingus choose to follow a particular business model, doesn't make Ryanair's any less legal.

Originally Posted by EI Premier

I have no interest in KLM, they are not competing with EI and the topic of discussion here was a comparison of the EI/FR cost base. In any case, is the €400m you mentioned annualised, available per annum? It has been widely reported that FR are receiving €600m, or 33% in excess of the amount that KLM received.

The €400mln was given to KLM from 2008 to 2009.

Originally Posted by EI Premier

Also, back to your original point and to honestly suggest that the €600m is not adding to the overall FR net profit..... I mean do you really believe that FR would enter into anything that would result in losses for them

Thats my point exactly. Ryanair are entering into these agreements in order to turn a profit, why would they start a route they'd lose money on? These support schemes are offered by airports to offset the cost of starting new routes until and if the market grows and the route becomes profitable, and at that stage its up to Ryanair whether or not to continue the route.

[airnoc]

Hi Aer lingus is one year back in Ire west knock.
How many pax has travel on this route or whats loads being like?

[EI Premier]

Yeh know exactly what I meant. No other European airline is taking on the amount of new aircraft as Ryanair are, and as such are not in a position to expand at the rate they are atm.

And whether or not airlines choose to operate from airports Ryanair operates from is their choice. Just because they don't feel they can compete with Ryanair doesn't make the support schemes any less legal.

Ryanair are not in a position for further largescale expansion, that was my point and thus my comment regarding excessive aircraft deliveries. I really don't want to turn this into an FR thread.

They can't compete with Ryanair because they can't employ the same bully type tactics in relation to airport costs/charges as I mentioned in my previous post. A lot of these routes are eventually pulled again by FR as you yourself even highlighted: ''If costs get too high, and the airport doesn't reduce fees'' So its a cyclical process but that can only be sustained for so long...

I can't find any other examples you posted, but I agree with you, it is unreasonable to compare the 2, but not for the reason you give. Its completely inaccurate and misleading to say Ryanair are only turning a net profit because of the €600mln they receive from different airports. If I was a shareholder in Ryanair and that was the case, I'd sell my shares straight away because these support schemes are not permanent and if Ryanair's profit was down to the support funding they receive, they'd probably be losing hundreds of millions the following year or the year after. So your logic is flawed.

Also theres nothing to stop Aer Lingus operating from the same airports and availing of the same deals as Ryanair get, but they choose not to because thats not the business model they have. Again just because Aer Lingus choose to follow a particular business model, doesn't make Ryanair's any less legal.

I didn't say that the €600million subsidies are solely/explicitly contributing 100% to the bottom line figures, but there is a feedforward motion and they certainly are contributing to them. My logic is not flawed at all, because therein lies my point. As I posted previously, I await to see FR results several years down the line when all such subsidy type resources will become depleted. Ryanair are receiving these subsidies for the moment on an annual basis so the differential is not going to show up immediately. But as I've said, give it some time and we shall see how things turn out.

I didn't say that aspect was illegal, however no other airline could employ the above mentioned tactics that FR employ.

The €400mln was given to KLM from 2008 to 2009.

Have KLM been receiving these subsidies to the above tune on an annualised basis prior to this? Are they going to receive these again this year and thereafter?

Thats my point exactly. Ryanair are entering into these agreements in order to turn a profit, why would they start a route they'd lose money on? These support schemes are offered by airports to offset the cost of starting new routes until and if the market grows and the route becomes profitable, and at that stage its up to Ryanair whether or not to continue the route.

I thinks its safe to say that we are going to have to agree to disagree. At the end of the day, my original point still stands and that is, EI cannot be compared with FR in relation to:

• Revenue as the FR revenue figures are skewed from a subsidy perspective.
• Cost base for the above mentioned and previously mentioned reasons, including to an extent the different nature of the EI business model

EI Premier