Aer Lingus - 6

[EI-BUD]

clareview,

I would agree that AerLingus is a fringe player, but despite their challenges they have weathered the worst of storms and are managing well comparatively speaking in the recession and in a climate of high fuel prices.

One would only hope that if Ryanair did acquire EI it would give it the investment that it needed to allow it to realise many opportunities e.g. making Dublin a real hub for flights to USA, Dubai can do it and manage a high proportion of interlining, no reason why Dublin can't do it.

My challenge to MOL would be to make the brand work at airports like Belfast, Gatwick etc, the model is perfectly suitable just doesnt have the established name in some other markets to make it through.

If MOL is planning to take EI out of LHR or any other primary airports, does that mean that they would plan to take the company down market and into secondary airports around the place. Surely this is not the way the company needs to go.

When did EI base a 330 in Man? I recall many routes to EU in the form of one stop on Dublin EU routes but never a 330 based and used to do MAN DUB USA...?

It is my view that BRU is a crazy suggestion. Focus on the core markets that is the most important for EI, Ireland and UK... If the brand can not work in a London airport such as Gatwick after the long and expensive marketing activity and the huge Irish Population who know the brand so well, it is has little chance going to another country with who uses a different language... Else they need to recognise that EI is a niche carrier with focus on its core market of the Island of Ireland.

If EI want to go into a UK market and a base they need to start small and hold on until they are well established, perhaps if FR did take over and they used Ryanair.com as another distribution channel for the brand it might help to some extent...

EI-BUD

[42psi]

When did EI base a 330 in Man? I recall many routes to EU in the form of one stop on Dublin EU routes but never a 330 based and used to do MAN DUB USA...?

Off the top of my head it was around '91 or '92, winter season, without looking it up.

Not based in MAN as such and not via Dub but SNN, it was a SNN based A/C.

Main t/round was at MAN with SNN becoming a transit stop in each direction, crewing was all ex SNN.

It was a great hit, US immigration at SNN was very popular.

Problem was that it couldn't work for the summer as the bookings ex SNN meant no space for the pax ex MAN.

[Skipness One Echo]

MOL has a personal interest in removing Aer Lingus, this is not entirely business driven, it's the last act of a play that began wih EI doing everything it could to kill FR from day one. Some of this is personal. There's a couple of good books on the history of Ryanair that are still available out on amazon or ebay.

If FR get EI, they will close it ASAP. Anyone who believes otherwise also believes in the tooth fairy.

[MCDU2]

If FR get EI, they will close it ASAP. Anyone who believes otherwise also believes in the tooth fairy.

Yep, will go something like this:-

- BA gets the LHR slots, FR gets the cash
- The net cash of 800m is deposited into the FR bank account and all other AL assets hived off to the highest bidder
- All AL employees are made redundant. They may well be offered new BRK contracts but the T&Cs will be so punitive that it wouldn't even put food on the table and so the pilots will for the most part head to the Middle East or Asia. They are the lucky ones as their licences are easily transferrable across the world. The other employees won't be so lucky and will add to the governments woes as unemployment hits a record level.
- the "10 players" don't materialise or if they do they last for the minimal 3 month period as required under EU law to provide competition on flights into Dublin. After this period FR will come back on ALL the routes to much fanfare offering "free" seats. The competitors will withdraw to their strongholds and FR will then crank up his prices as any person with a complete monopoly would do.
- FR now holding a complete monopoly over ALL traffic into and out of Ireland will meet with the DAA to present FR's new schedule of landing fees. The DAA goes to the wall as a consequence requiring the government to bail it out. FR blames T2 as being to blame and moves in there for free.
- People start considering using the ferry again to or holidaying in the more wild and windswept parts of Ireland as they can no longer afford to go abroad.

[ayroplain]

MOL has a personal interest in removing Aer Lingus, this is not entirely business driven, it's the last act of a play that began with EI doing everything it could to kill FR from day one. Some of this is personal

Nothing wrong with that. There were thousands of westerns made in Hollywood and elsewhere in which our hero was done an injustice by some evil baron and set out for revenge. Whose side were audiences on? I guess you know the answer to that.

[racedo]

MOL has a personal interest in removing Aer Lingus, this is not entirely business driven, it's the last act of a play that began wih EI doing everything it could to kill FR from day one. Some of this is personal. There's a couple of good books on the history of Ryanair that are still available out on amazon or ebay.

If FR get EI, they will close it ASAP. Anyone who believes otherwise also believes in the tooth fairy.

What a load of tosh......

Easier ways to kill Aer Lingus than spending hundreds of millions buying it and shutting it down. Just compete hard on every single route at low low prices and EI would be gone in 2 years.

The personal issue really is laughable as MOL had nothing to do with Ryanair when EI was trying to kill it and it was 5 years later before he became involved.

Its laughable that posters feel that a good businessman who has proved it for last 20 years would spend hundreds of millions on EI just to close and gain nothing when he can buy it and turn it into something different.

[EI-BUD]

Easier ways to kill Aer Lingus than spending hundreds of millions buying it and shutting it down

Arguable point Racedo, however, we could apply this rationale to Buzz. Why did FR acquire Buzz if they could have closed it in this way?

We could argue the toss but yes FR could make life hard for EI but price is not the only driver in the choice of airline. Yes Price is important but there is a much bigger point here, Aer Lingus can afford to be a little more expensive than FR but still attract a sustainable number of passengers to its services.

In terms of 'easier ways to kills Aer Lingus', this hasnt worked on many routes where FR perservere with low low prices, e.g. Stockholm Dublin?

Many many other markets where FR cannot penetrate EI's position to any great extent namely to slot constrained airports and for the business of interlining which onless FR has a direct service between the points, it is a market that AerLingus does well with and FR cannot touch. E.g. Stockholm Dublin Boston eg.
Also routes like Dublin Bristol, Aer Arann in the guise of EI well able to hold its own, despite great FR schedule and lower prices.

FR is a fantastic Success story but its motives for acquiring EI in my opinion are not in the interest of Ireland.

EI-BUD

[racedo]

Arguable point Racedo, however, we could apply this rationale to Buzz. Why did FR acquire Buzz if they could have closed it in this way?
.

FR bought Buzz to prevent anybody else doing so and got paid by KLM to take Buzz off its hands as it was dragging KLM down with losses.

Everybody highlightsBuzz and how bad Ryanair treated them when KLM wanted to exit the business as fast as they could because of its losses.

[Skipness One Echo]

The personal issue really is laughable as MOL had nothing to do with Ryanair when EI was trying to kill it and it was 5 years later before he became involved.

Its laughable that posters feel that a good businessman who has proved it for last 20 years would spend hundreds of millions on EI just to close and gain nothing when he can buy it and turn it into something different

It is VERY personal against Aer Lingus, and to this "great businessman", don't make me laugh. That's the whole point racedo, a good businessman wouldn't have wasted so much time effort and money trying to buy out what he would see as a poxy lower sized former national flag carrier complete with unions. Is he trying to buy CSA? No. Did he go after Malev ? No. Yet he is FIXATED on Aer Lingus.

[racedo]

It is VERY personal against Aer Lingus, and to this "great businessman", don't make me laugh. That's the whole point racedo, a good businessman wouldn't have wasted so much time effort and money trying to buy out what he would see as a poxy lower sized former national flag carrier complete with unions. Is he trying to buy CSA? No. Did he go after Malev ? No. Yet he is FIXATED on Aer Lingus.

Really so he not a great businessman....

Show me examples of people who have had 20 years of consistent growth, still profitable in the recession and haven't milked the company for personal gain at the expense of its future...

As fo wasting time and effort I think Aer Lingus board are quite thankful as he has enabled them to use him as the stick in which to beat the unions or did you not realise that.

If the Unions claims on pensions for Aer Lingus stands then the €330 million they had in net cash at the end of June will disappear quickly into the pension fund.

[EI-BUD]

FR bought Buzz to prevent anybody else doing so and got paid by KLM to take Buzz off its hands as it was dragging KLM down with losses.

Applying your logic of earlier, it would be unncessary to worry about anybody else taking over Buzz as FR could just put the squeeze on etc and put Buzz out of business.

Everybody highlightsBuzz and how bad Ryanair treated them when KLM wanted to exit the business as fast as they could because of its losses.

Perfectly logical to highlight Buzz as it is an example of Ryanair taking over a competitor (I am not aware of any other airlines that they took over). I never indicated that Buzz were badly treated, though I would suggest that everybody including the Buzz staff are perfectly entitled to their own view. How they were treated is highly irrelevant, given that I was referring to your earlier comments that there were 'easier way to kill Aer Lingus' than buying it and then closing it down

Really so he not a great businessman....

Nobody could argue that MOL is great businessman and FR under his remit has been a runaway success in terms of Profit and all financial metrics. It is clear that he is fixated on Aer Lingus absolutely true, but moreover fixated on anything that happens on home turf examples include running easyJet out of the place at significant cost, trying to obliterate Aer Arann from its own markets e.g. Cork Dublin and many more to count.

Referring back to Buzz as a highly relevant example, if the Unions in EI are unwilling to cooperate with his plans, he wil warn of his intentions to close the comany down...

[ayroplain]

poxy lower sized former national flag carrier complete with unions

a perfect description of EI some would say.

if the Unions in EI are unwilling to cooperate with his plans, he will warn of his intentions to close the company down...

He won't need to close it down. The unions will see to that as history has shown that unions would rather see a workplace closed than lose their power therein. No amount of trying would ever convince me that MOL will be sitting down and discussing EI's future with siptu et al. He'll be telling them what is going to happen, take it or leave it.
All hypothetical, of course, as the takeover is very unlikely to happen.

[Skipness One Echo]

He won't need to close it down. The unions will see to that as history has shown that unions would rather see a workplace closed than lose their power therein. No amount of trying would ever convince me that MOL will be sitting down and discussing EI's future with siptu et al. He'll be telling them what is going to happen, take it or leave it.

Pendulums swing.
We've gone from Pan Am type Skygods to kids paying for their own PPL, uniform, pass and other odds and sods at the same time as being paid as contractors for a few years before making the flight to the sandpit.
The point is, MOL doesn't ever stop, he sees the line then crosses it. The end result is that the working conditions of tax paying employees are much worse than they used to be. I know some unions can be more interested in their own politics than their members, but MOL is no hero. He's a multi millionaire who got to where he is by dragging a great many others down to Earth. Sometimes that is admirable, in moderation it's indispensable. On planet Ducksy, it's because he can.

Buzz was destroyed and parted out, anyone who says "no" to MOL has the full toys out of the pram performance. I think the Irish public at least deserves the chance not to choose Aer Lingus. They're about to lose even that if these vandals get their way.

[Just a spotter]

From a purely business perspective (and attempting to remove the history and personalities from it for a minute or two); what exactly does Ryanair gain by acquiring Aer Lingus?

The reason FR puts forward is to develop the long haul business, promising fares from €99 each way. Now, to use a very Irish phrase in response to a request for directions … “I wouldn’t start from here”.

If Ryanair want to start a long haul/trans-Atlantic operation then they have sufficiently deep enough pockets and could easily start from scratch and brand it anything they wanted, it doesn’t have to Ryanair or carry any legacy (by way of example, look at Toyota, who built their initial presence in Europe & the US on low cost, developed a reputation for, at the very least being OK, and in order to "move up the food chain" and capture more lucrative markets established a new separate brand in Lexus). Ryanair would have no problem in securing aircraft, no problem in setting up a company, little difficulty in securing an AOC & routes and probably, in the current environment very little trouble in recruiting staff (or encouraging existing crew to pay for type rating training and moving across). What’s more … the big plus for this approach (as presumably seen from the perspective of an organisation that does not “do unions”) … no union involvement or legacy work practices.

Compare that to the alternative option, that of purchasing an existing operation (in this case Aer Lingus), which requires the downsizing or disposal of the short haul operation and ramping up of the long haul one all while dealing with a less than sympathetic unionised workforce (if rumours on this board are to be believed, even Aer Lingus' own management team have had problems agreeing new long haul routes & rotas with the staff representatives).


Regardless of which option was selected, as has been pointed out in this parish, the Aer Lingus brand is very Irish centric, so carries little weight outside of the “diaspora”, therefore a lot of money would have to be spent in promoting it across Europe and the US … so why not start afresh with a new brand and company that carries no legacy and with new work practices?

Which strikes you as the better, less troublesome and more “low cost/low fares” option?

IMHO, from a business perspective, the whole saga is nothing more than an attempt to remove EI from the field in DUB.

JAS

[Bearcat]

Ehhh...FR are non etops, so they'll have to go the long way to kick off for a long timeDon't expect help from EIN as M cleavers them.

[racedo]

Ehhh...FR are non etops, so they'll have to go the long way to kick off for a long timeDon't expect help from EIN as M cleavers them.

The doom merchants see no further than the end of their nose.

[Jamie2k9]

IMHO, from a business perspective, the whole saga is nothing more than an attempt to remove EI from the field in DUB.

Couldn't put it better myself.

[Bearcat]

Snide comments from a hired FR hack are nothing new here.

Bottom line is that MO'L will cleaver EIN in an instant should they take them over. He doesn't do smiling assassin tactics.

[dublinaviator]

Some interesting comments from one of United's Senior VP's:

Explaining why the Joint Venture with Aer Lingus on the Washington-Madrid route was ending, Hershel Kamen, United’s senior vice-president of alliances, regulatory and policy said:

“We do not have anti-trust immunity with Aer Lingus so we don’t have the ability, like we do with Lufthansa, or ANA [in Japan] or Air Canada, to co-ordinate pricing or co-ordinate networks....That puts a lot of strain on a joint venture because you can’t talk about the dynamics of the joint venture together because of anti-trust law. So, from a functional standpoint, it didn’t really work because we couldn’t have the conversations that we needed to have.”

On the issue of Aer Lingus joining Star Alliance, he said:

“We’ve agreed with Aer Lingus that, while they may or may not ever want to join Star, and you would have to ask them that question, we think there are benefits for both carriers.

“They are a strong partner for us in the UK and Ireland. We will likely expand that relationship.

“The benefit for us is the connections they provide throughout the UK and Ireland, especially with [UK airline] BMI leaving Star and the Lufthansa group [following its takeover by BA].

“Aer Lingus provides connections at Heathrow as well as out of Shannon and Dublin services that we couldn’t otherwise offer to destinations that we don’t serve.”

Full article: Not all plane sailing for Aer Lingus and United - The Irish Times - Fri, Oct 05, 2012

[ryan2000]

Hard to see Aerlingus breaking away from feeding traffic through BA at LHR even with BA returning to Dublin. It would represent a major change in strategy for them to do so. Can Star Alliance possibly offer the same range and frequency of connections particularly from Cork and Shannon neither of which serve Frankfurt?