Aer Lingus - 5
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MO'L met Noel Dempsey (Transport) last night and has requested a meeting with Brian Lenihan (Finance), who has indicated that a deal might be possible. Dempsey described the meeting as a listening exercise, although BL will no doubt be aware that the price MOL is offering now is considerably less than that offered last year and the likelihood that it's not going to be higher anytime soon.
O'Leary meets minister to push case for Aer Lingus deal - Politics - Independent.ie
O'Leary meets minister to push case for Aer Lingus deal - Politics - Independent.ie
A deal is on its just a question of at what price.
Ryanair moving its fleet maintenance to Ireland or aggressively expanding US routes using EI brand and feeding them from its network to create couple of thousand jobs plus reduction in transatlantic taxes may be something that Irish Govt would listen to.
The idea that you can't have 2 separate brands from same company seems not to be born out by Toyota and Lexus.
EI benefits from FR business model and FR benefits from customer service focus.
MO'L intergrates them and then retires to do something else.
Ryanair moving its fleet maintenance to Ireland or aggressively expanding US routes using EI brand and feeding them from its network to create couple of thousand jobs plus reduction in transatlantic taxes may be something that Irish Govt would listen to.
The idea that you can't have 2 separate brands from same company seems not to be born out by Toyota and Lexus.
EI benefits from FR business model and FR benefits from customer service focus.
MO'L intergrates them and then retires to do something else.
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racedo you're an idiot if you think there will be ANYTHING left of Aer Lingus at the end of that process. The naivety of some of you guys on here is breathtaking. Clearly SOME of you have no idea what goes on in a business.
racedo you're an idiot if you think there will be ANYTHING left of Aer Lingus at the end of that process. The naivety of some of you guys on here is breathtaking. Clearly SOME of you have no idea what goes on in a business.
Can you tell me what identity of KLM now exists ? or SN Brussels ? or Swiss ?
FR aren't going to buy EI to shut all the routes rebrand and sell the aircraft as what point would that serve.
Fact is it is easily possible to have 2 complementary brands alongside each other and that is the strategy FR would take and use the EI one on its transatlantic and Capital city routes.
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Skipness one echo, I feel your pain. Racedo has been quoting FR propaganda for a few days now. I don't think it is a genuine poster and as for Akerosid, any person holding up the Indo as a genuine source of unbiased news is a bit suspicious also. I had to laugh the Indo was quoting this thread the other day under PILOTS ARE DIVIDED OVER FR BID. Sad grubby little FR trolls and Indo hacks be here, BEWARE!
Skipness one echo, I feel your pain. Racedo has been quoting FR propaganda for a few days now. I don't think it is a genuine poster and as for Akerosid, any person holding up the Indo as a genuine source of unbiased news is a bit suspicious also.
So exactly what FR propoganda have I been quoting ? Do tell.
So anybody who doesn't spout company line is a troll....nice but false.
Interested in hearing what future you are proposing for EI .
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"and as for Akerosid, any person holding up the Indo as a genuine source of unbiased news is a bit suspicious also. I had to laugh the Indo was quoting this thread the other day under PILOTS ARE DIVIDED OVER FR BID. Sad grubby little FR trolls and Indo hacks be here, BEWARE!"
All I did was to report what the Indo said, which was a factual item; either he did or he didn't meet the minister and the minister said in the Dail that the meeting did take place. It wasn't the Indo's opinion as such.
I take the view that a deal is on the cards (my view, not the Indo's!); I think we will see DM go (and possibly a few others) as soon as the deal is done. MOL is in a position to drive a hard bargain and clearly, the govt would like to see more aggressive development of long haul.
All I did was to report what the Indo said, which was a factual item; either he did or he didn't meet the minister and the minister said in the Dail that the meeting did take place. It wasn't the Indo's opinion as such.
I take the view that a deal is on the cards (my view, not the Indo's!); I think we will see DM go (and possibly a few others) as soon as the deal is done. MOL is in a position to drive a hard bargain and clearly, the govt would like to see more aggressive development of long haul.
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FR aren't going to buy EI to shut all the routes rebrand and sell the aircraft as what point would that serve
However one has to ask whether this is the best thing for the consumer.
Air France / KLM are complimentary national brands, both full service airlines operating from strong hubs with growing synergies in the business. They have similar business models and VERY strong links in their home countries. Hence they rightly continue to operate two very strong and long lived brands.
Ryanair took out Buzz and closed it down. Some routes went to Ryanair and Buzz is now a footnote in wikipedia. I strongly believe Ryanair will take the routes they want in Europe and fly them as Ryanair, the transatlantic rights will be flown as the new long haul loco M'OL has been keen to start.
That leaves no Aer Lingus competitor, no Aer Lingus in Europe, and the long haul rebranded I suspect. If they continue to fly as Aer Lingus to the US it will be using the name only. Getting EI Christmas come early for Ryanair but as for the Aer Lingus staff? God help them.
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Update on Cash Offer by Coinside Limited a wholly owned subsidiary of
Ryanair Holdings plc for Aer Lingus Group plc
Since Ryanair's announcement of its Offer, it has noted a range of
observations and comments from a variety of interested parties and
stakeholders. Opinions have also been expressed that Ryanair's Offer is
unlikely to receive European Commission merger approval.
At a meeting between Ryanair and the Minister for Transport last night,
3 December, 2008, Ryanair highlighted the benefits which the Offer, if
successful, would deliver to Ireland, Irish consumers, Aer Lingus
employees and all other Aer Lingus stakeholders.
In this announcement Ryanair outlines some of the details of its
proposals in order to demonstrate how the Offer promotes and secures
competition and how it will promote national aviation policy and
perceived Irish Government concerns in that regard.
With respect to the Offer, Ryanair is undertaking that, if its Offer is
successful, it will:
A) Recognise the Trade Unions in Aer Lingus. Ryanair will commit and
guarantee that Aer Lingus will continue to honour and respect Aer
Lingus' long-standing policy of trade union recognition within Aer Lingus.
B) Shannon-Heathrow connectivity will be restored. Ryanair will
ensure that Aer Lingus returns to the Shannon-Heathrow route with a
minimum daily frequency of a morning and evening rotation, at the first
seasonal schedule change following completion of the Offer. The
Heathrow slots necessary to meet this commitment will be switched from
one of Aer Lingus' other Heathrow routes. This will meet the
Government's national aviation objective of restoring connectivity
between Heathrow and the Shannon/Midwest region, and improving Ireland's
connectivity to London Heathrow.
C) Government will be given control over London Heathrow slots.
Ryanair propose that the Articles of Association of Aer Lingus will be amended
upon completion of the Offer to provide the Irish Government and Minister for
Transport with a legally binding guarantee that will ensure Aer Lingus'
Heathrow slots cannot be sold, transferred, leased or switched by Aer
Lingus to any other airline or to any other route without the prior
written approval of the Irish Minister for Transport. This legally
binding guarantee will protect Ireland's connectivity to Heathrow and
the world.
This will ensure that the Irish Government's national aviation policy
(as articulated at the time of the Aer Lingus' IPO), to ensure a minimum
level of connectivity between London Heathrow and Dublin, Cork and
Shannon, will be guaranteed into the future. This proposed provision in
the Aer Lingus articles of association (which will be detailed in the
Offer Document) will correct the deficiencies in Aer Lingus' existing
Articles, which allowed Aer Lingus to close the Shannon-Heathrow route
and replace it with a Belfast-Heathrow route, despite the Government's
objection. This guarantee' will ensure that Heathrow's connectivity to
Dublin, Cork and Shannon can be protected by the current and future
Irish Ministers for Transport for the benefit of Ireland and all Irish
consumers/visitors.
D) Ryanair will provide a EUR100 million bank guarantee that Aer
Lingus' short haul fares will be reduced by a minimum of 5% for a three
year period. Ryanair's Offer guarantee's to reduce Aer Lingus' short
haul fares (EUR94 in 2007) by a minimum of 5%, on a like for like
basis, for a three year period post completion. The merged Ryanair/Aer
Lingus Group will provide the Irish Government with a EUR100 million
bank guarantee which can be drawn down by the Irish Government on
behalf of consumer/taxpayers if an independent auditor, nominated by
the Government, cannot confirm that the Ryanair/Aer Lingus Group have
complied with this fare reduction guarantee each year for the 3 years
post completion of the Offer. The Ryanair/Aer Lingus Group will also
reimburse the Government for all costs associated with this annual
independent audit of Aer Lingus' short haul fare reduction. This EUR100
million bank guarantee will provide consumers, the Irish Government and
all other stakeholders with absolute assurance that the annual EUR40
million consumer savings arising from the minimum 5% reduction in Aer
Lingus' average short haul fare will be delivered, in order
to promote competition and growth on Aer Lingus' short haul route
network.
E) Ryanair will provide an additional EUR100 million bank guarantee
that Aer Lingus' fuel surcharges will be eliminated in their entirety
(for all new bookings) within 28 days of completion of the Offer. The
merged Ryanair/Aer Lingus Group will provide the Irish Government with
a EUR100 million bank guarantee which can be drawn down by the Irish
Government on behalf of consumers/taxpayers if an independent auditor
nominated by the Government cannot confirm that the Ryanair/Aer Lingus
Group have complied with this fuel surcharge elimination within 28 days
of completion of the Ryanair Offer (for all new bookings). The
Ryanair/Aer Lingus Group will also reimburse the Government for
all costs associated with this independent audit of Aer Lingus' fuel
surcharge elimination. This EUR100 million bank guarantee will provide
consumers, the Irish Government and all other stakeholders with absolute
assurance that the annual EUR100 million consumer saving arising from
the elimination of Aer Lingus'fuel surcharges will be delivered in order
to promote competition and growth on the Aer Lingus' long haul route
network.
Ryanair believes that these substantial guarantees and financial
penalties, which will be unique to the proposed Ryanair-Aer Lingus airline merger,
will afford consumers, the Irish Government, the European Commission and all
other stakeholders the necessary confidence in Ryanair's guarantees.
Ryanair believes that these reductions in Aer Lingus' short haul fares
and removal of Aer Lingus' fuel surcharges will deliver annual consumer
savings of over EUR140 million, and will meet national aviation policy
by promoting and securing the competitveness of Aer Lingus' short and
long haul network, and increasing competition between Aer Lingus' lower
fares and Ryanair's services on short haul routes to and from Ireland.
Full details of these proposals and the full terms and conditions of the
Offer will be contained in the Offer Document. The Offer Document will
be posted to Aer Lingus Shareholders in due course.
Ryanair Holdings plc for Aer Lingus Group plc
Since Ryanair's announcement of its Offer, it has noted a range of
observations and comments from a variety of interested parties and
stakeholders. Opinions have also been expressed that Ryanair's Offer is
unlikely to receive European Commission merger approval.
At a meeting between Ryanair and the Minister for Transport last night,
3 December, 2008, Ryanair highlighted the benefits which the Offer, if
successful, would deliver to Ireland, Irish consumers, Aer Lingus
employees and all other Aer Lingus stakeholders.
In this announcement Ryanair outlines some of the details of its
proposals in order to demonstrate how the Offer promotes and secures
competition and how it will promote national aviation policy and
perceived Irish Government concerns in that regard.
With respect to the Offer, Ryanair is undertaking that, if its Offer is
successful, it will:
A) Recognise the Trade Unions in Aer Lingus. Ryanair will commit and
guarantee that Aer Lingus will continue to honour and respect Aer
Lingus' long-standing policy of trade union recognition within Aer Lingus.
B) Shannon-Heathrow connectivity will be restored. Ryanair will
ensure that Aer Lingus returns to the Shannon-Heathrow route with a
minimum daily frequency of a morning and evening rotation, at the first
seasonal schedule change following completion of the Offer. The
Heathrow slots necessary to meet this commitment will be switched from
one of Aer Lingus' other Heathrow routes. This will meet the
Government's national aviation objective of restoring connectivity
between Heathrow and the Shannon/Midwest region, and improving Ireland's
connectivity to London Heathrow.
C) Government will be given control over London Heathrow slots.
Ryanair propose that the Articles of Association of Aer Lingus will be amended
upon completion of the Offer to provide the Irish Government and Minister for
Transport with a legally binding guarantee that will ensure Aer Lingus'
Heathrow slots cannot be sold, transferred, leased or switched by Aer
Lingus to any other airline or to any other route without the prior
written approval of the Irish Minister for Transport. This legally
binding guarantee will protect Ireland's connectivity to Heathrow and
the world.
This will ensure that the Irish Government's national aviation policy
(as articulated at the time of the Aer Lingus' IPO), to ensure a minimum
level of connectivity between London Heathrow and Dublin, Cork and
Shannon, will be guaranteed into the future. This proposed provision in
the Aer Lingus articles of association (which will be detailed in the
Offer Document) will correct the deficiencies in Aer Lingus' existing
Articles, which allowed Aer Lingus to close the Shannon-Heathrow route
and replace it with a Belfast-Heathrow route, despite the Government's
objection. This guarantee' will ensure that Heathrow's connectivity to
Dublin, Cork and Shannon can be protected by the current and future
Irish Ministers for Transport for the benefit of Ireland and all Irish
consumers/visitors.
D) Ryanair will provide a EUR100 million bank guarantee that Aer
Lingus' short haul fares will be reduced by a minimum of 5% for a three
year period. Ryanair's Offer guarantee's to reduce Aer Lingus' short
haul fares (EUR94 in 2007) by a minimum of 5%, on a like for like
basis, for a three year period post completion. The merged Ryanair/Aer
Lingus Group will provide the Irish Government with a EUR100 million
bank guarantee which can be drawn down by the Irish Government on
behalf of consumer/taxpayers if an independent auditor, nominated by
the Government, cannot confirm that the Ryanair/Aer Lingus Group have
complied with this fare reduction guarantee each year for the 3 years
post completion of the Offer. The Ryanair/Aer Lingus Group will also
reimburse the Government for all costs associated with this annual
independent audit of Aer Lingus' short haul fare reduction. This EUR100
million bank guarantee will provide consumers, the Irish Government and
all other stakeholders with absolute assurance that the annual EUR40
million consumer savings arising from the minimum 5% reduction in Aer
Lingus' average short haul fare will be delivered, in order
to promote competition and growth on Aer Lingus' short haul route
network.
E) Ryanair will provide an additional EUR100 million bank guarantee
that Aer Lingus' fuel surcharges will be eliminated in their entirety
(for all new bookings) within 28 days of completion of the Offer. The
merged Ryanair/Aer Lingus Group will provide the Irish Government with
a EUR100 million bank guarantee which can be drawn down by the Irish
Government on behalf of consumers/taxpayers if an independent auditor
nominated by the Government cannot confirm that the Ryanair/Aer Lingus
Group have complied with this fuel surcharge elimination within 28 days
of completion of the Ryanair Offer (for all new bookings). The
Ryanair/Aer Lingus Group will also reimburse the Government for
all costs associated with this independent audit of Aer Lingus' fuel
surcharge elimination. This EUR100 million bank guarantee will provide
consumers, the Irish Government and all other stakeholders with absolute
assurance that the annual EUR100 million consumer saving arising from
the elimination of Aer Lingus'fuel surcharges will be delivered in order
to promote competition and growth on the Aer Lingus' long haul route
network.
Ryanair believes that these substantial guarantees and financial
penalties, which will be unique to the proposed Ryanair-Aer Lingus airline merger,
will afford consumers, the Irish Government, the European Commission and all
other stakeholders the necessary confidence in Ryanair's guarantees.
Ryanair believes that these reductions in Aer Lingus' short haul fares
and removal of Aer Lingus' fuel surcharges will deliver annual consumer
savings of over EUR140 million, and will meet national aviation policy
by promoting and securing the competitveness of Aer Lingus' short and
long haul network, and increasing competition between Aer Lingus' lower
fares and Ryanair's services on short haul routes to and from Ireland.
Full details of these proposals and the full terms and conditions of the
Offer will be contained in the Offer Document. The Offer Document will
be posted to Aer Lingus Shareholders in due course.
They would take out their primary competitor. Allowing EI to remain competing with FR is not something I can see. The networks are not complimentary, MO'L is looking to buy a monopoly and close out the competition, they are ruthless at this and there's nothing wrong with that.
However one has to ask whether this is the best thing for the consumer
However one has to ask whether this is the best thing for the consumer
FR and EI compete in very few routes so to suggest there are a big competitor is not borne out by the reality.
Air France / KLM are complimentary national brands, both full service airlines operating from strong hubs with growing synergies in the business.
Ryanair took out Buzz and closed it down.
That leaves no Aer Lingus competitor, no Aer Lingus in Europe,
FR has no intentions of spending €750m to shut down EI as that makes no sense when you keep it and make it pay.
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I think we will see MO'L tone down the histrionics over the next few weeks, as he edges towards his long sought after prize!
Just looking through the statement above, I couldn't help noticing a few odd points:
Re SNN-LHR: "The
Heathrow slots necessary to meet this commitment will be switched from
one of Aer Lingus' other Heathrow routes"
Bye-bye BFS-LHR?
Also Re SNN-LHR, it says "This will meet the
Government's national aviation objective of restoring connectivity
between Heathrow and the Shannon/Midwest region, and improving Ireland's
connectivity to London Heathrow."
There is a national aviation strategy? (I just can't help recalling Capt. Blackadder's comment, "Our battles are directed?") ... and this "national aviation strategy includes restoring connectivity to the SNN/midwest region?
"This will ensure that the Irish Government's national aviation policy
(as articulated at the time of the Aer Lingus' IPO), to ensure a minimum
level of connectivity between London Heathrow and Dublin, Cork and
Shannon, will be guaranteed into the future".
Another dig at the govt's failure to protect SNN-LHR?
Last (but one) paragraph:
"will meet national aviation policy
by promoting and securing the competitveness of Aer Lingus' short and
long haul network"
Again, "what national aviation policy?"
Still a lot of "Ryanairese" in there, but will certainly go down well in the midwest.
Would love to know how EI management perceives the govt's apparent openness to a deal!
As for the consequences of the govt saying "no", FR can/will probably say, "wait until you see what we'll be offering for EI next year; when we're finished with it, you'll be paying us to take it off your hands" ... I suspect Brian Lenihan knows this; better €2-300m (or whatever the govt stake is worth now) than a fraction of this, next year.
Just looking through the statement above, I couldn't help noticing a few odd points:
Re SNN-LHR: "The
Heathrow slots necessary to meet this commitment will be switched from
one of Aer Lingus' other Heathrow routes"
Bye-bye BFS-LHR?
Also Re SNN-LHR, it says "This will meet the
Government's national aviation objective of restoring connectivity
between Heathrow and the Shannon/Midwest region, and improving Ireland's
connectivity to London Heathrow."
There is a national aviation strategy? (I just can't help recalling Capt. Blackadder's comment, "Our battles are directed?") ... and this "national aviation strategy includes restoring connectivity to the SNN/midwest region?
"This will ensure that the Irish Government's national aviation policy
(as articulated at the time of the Aer Lingus' IPO), to ensure a minimum
level of connectivity between London Heathrow and Dublin, Cork and
Shannon, will be guaranteed into the future".
Another dig at the govt's failure to protect SNN-LHR?
Last (but one) paragraph:
"will meet national aviation policy
by promoting and securing the competitveness of Aer Lingus' short and
long haul network"
Again, "what national aviation policy?"
Still a lot of "Ryanairese" in there, but will certainly go down well in the midwest.
Would love to know how EI management perceives the govt's apparent openness to a deal!
As for the consequences of the govt saying "no", FR can/will probably say, "wait until you see what we'll be offering for EI next year; when we're finished with it, you'll be paying us to take it off your hands" ... I suspect Brian Lenihan knows this; better €2-300m (or whatever the govt stake is worth now) than a fraction of this, next year.
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FR and EI compete in very few routes so to suggest there are a big competitor is not borne out by the reality.
DUB-BHX / MAN / NCL / LGW / EDI / GLA
Lots of job losses and AF being the primary leader and where KLM competed they no longer do.
That sounds like nobody would open any routes into Ireland from CDG/FRA/LHR which is clearly not likely to happen, its an open market where people go with personal preferences and price isn't always the key.
FR has no intentions of spending €750m to shut down EI as that makes no sense when you keep it and make it pay.
FR has no intentions of spending €750m to shut down EI as that makes no sense when you keep it and make it pay.
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FR and EI compete in very few routes so to suggest there are a big competitor is not borne out by the reality.
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Dublin_Eire, re your comments about Irish personalities in Aviation, isn't it Alan Joyce that is head of Jetstar at the moment? Jetstar is the best performing division of Qantas!!! We have alot to be proud of!
Quantum leap for Tallaght maths geek to top of global airline heap - World - Independent.ie
And he took the business model from Ryanair over there although some aspects didn't take off like the free seating plan.
Sorry, I meant to say South of Ireland, EI-BUD.....
Bootcamp, I agree with you. I was watching the news and remember thinking MO'L looks a lot older.... More grey hair. I wonder has pressure recently been getting to him???
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racedo you're an idiot if you think there will be ANYTHING left of Aer Lingus at the end of that process
Racedo has been quoting FR propaganda for a few days now. I don't think it is a genuine poster and as for Akerosid, any person holding up the Indo as a genuine source of unbiased news is a bit suspicious also
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he comes across as being passionate about the business
The man suggests that FR and EI hardly compete. That view is not only different from mine, it is from a different planet. To warp the reality of the situation is beyond parody.
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FR has no intentions of spending €750m to shut down EI as that makes no sense when you keep it and make it pay.
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Skipness One Echo & en2r, Aer Lingus and Ryanair compete out of Ireland only, surely you recognise that when viewing Ryanair's network as a whole, this is a very small proportion and certainly doesn't come anywhere near meriting Aer Lingus being classified as one of their 'primary competitors'.
O'Leary's a business man, if there are passengers out there who want to pay Aer Lingus fares on the same route then there's additional revenue to be made. It's quite likely that a lot of these people would refuse to pay the same fare with Ryanair even though both companies position themselves as low cost carriers. Obviously O'Leary will be able to create a true low cost base with Aer Lingus far outweighing the 5% average reduction in fares he's promising - and all without having to introduce dreaded 'customer service' at Ryanair!
Anyway I'm sure transatlantic is his main focus. With a bit of work it'll become a true European service, rather than the current Irish service with a few transferring European passengers thrown in here and there.
Aer Lingus would be doing some major bucking of the trend to remain as a stand alone airline in the current climate. I for one don't want them to try as, taking away any sentiments, it just makes no business sense.
What synergies exist with Ryanair having two brands on the same city route? It's the left hand competing with the right hand and MO'L is way too sharp for that.
Anyway I'm sure transatlantic is his main focus. With a bit of work it'll become a true European service, rather than the current Irish service with a few transferring European passengers thrown in here and there.
Aer Lingus would be doing some major bucking of the trend to remain as a stand alone airline in the current climate. I for one don't want them to try as, taking away any sentiments, it just makes no business sense.