Aer Lingus - 6

[EI-BUD]

It has been suggested that FR might do a deal with VS, but now it looks unlikely, I doubt if DL is interested in VS operating LHR-DUB (and LHR-MAM/EDI/ABZ for that matter), when they operate direct flights to Dublin from ATL and JFK)

FR will not be doing a deal with anybody, the relevant competition bodies will decide and any deal to sell EI to FR will most likely include some form of ringfencing of LHR Slots. Assuming FR are given approval, seems most unlikely.

The BA-EI alliance has been weakening for the past 10 years at least

Not entirely true, the issues are quite recent. EI had added codesharing on BFS LHR before bmi deal was done. Leaving one world not a big issue between EI / BA. There relationship really only come under the spot light an appears strained since bmi purchase.

This will sort itself out in time. Too much at stake for both parties, particularly BA.

[Aerlingus231]

However EI should sell their LHR slots to BA, even if the takeover falls though (they can still codeshare on BA's LHR-DUB flight for example)

What??? Did you just suggest that EI, a profitable company, should sell some of their most valuable assets to another company, so that the other company can make a profit at EI's expense? EI makes a profit on LHR, if it didn't then sure they could consider selling them, but what kind of mad hatter idea is it to sell something making you money, so that your competition can make money on it instead???

[BALHR]

The LHR slots are less relevant now than they were at the time of Aer Lingus'
privatisation. The industry has completely changed, and even the Irish aviation
scene has changed dramatically. Not only do Irish people have increased access
to other major European hubs such as Frankfurt, but they also have the choice of
the Middle Eastern hubs (Dubai and Abu Dhabi). Given the ever hardening
relationship between Aer Lingus and BA recently, Aer Lingus have also made
attempts to reduce their dependence on BA for feeder traffic. So I wouldn't go
as far as to say LHR slots are the life blood of Irish aviation, they're
important but they don't hold anywhere near the importance that they once held.

While the BA-EI has been weaking for some time now and the rise of Eithad/Emirates has taken traffic away from BA/LHR, the LHR-DUB remains the 3rd Busiest rute out of LHR, if the route remains profitable, I doubt if BA pull out of DUB altogether

Nothing will cahnce on that reguard even if EI pulls out of LHR, in fact it might improve yields...

FR bid is dead in the water and MOL is really struggling to keep the door
open for his appeal on the decision.

I would not think so, like Godzilla, its keeps coming back...

Even if he loses this attempt, FR/MOL will be back...

I am not convinced politics doesnt play a part in any competition decision
here and even the UK authorities are looking at FR interest in EI

The Irish government might be againt it, but the problem is times have changed, the term "national/flag carrier" is not relevent anymore, EI should fight this takeover (and look for a white knight), but it cannot expect help from any European Government (not even the Irish one, they can't buy FR's stake in EI, not unless the EU relaxes its austerity measures)

however maybe I am wrong time will tell but there is a compelling need to keep
one of the very few profitable shorthaul airlines in Europe on one of the
busiest routes in order to compete with FR

BA taking over EI LHR slots and FR the rest of EI would not stop competition on LON-DUB/IRE, even if BA CityFlyer buys CityJet

BA cannot compete on shorthaul to ROI with FR , EI can and this competition
has to be protected and I believe EU will not want to see take away the healthy
competion between two profitable Iirsh airlines .

Yes that its true to a extent, but they already compete with FR on the LON-DUB route and they seem to be fine (they focus on diffrent sectors of the market)

Remember there is a lot of comptition on the LON-DUB route already, remember we already compete in a European Air Market, the airlines that compete don't have to be Irish

Overall however, the best airline for EI is not FR, but BA/IAG...

[Hangar6]

BA to IRELAND

I cannot agree that BA already compete on IRISH routes

No service to CORK , only FR and EI
No service to SNN only FR and EI
No service to KIR only FR
No service to NOC only FR and EI

and the domestice legs

No service to LDY only FR

Service to BHD competes with EI BE EZYamong others but no FR

BA are cutting back on service to DUB , after less than a year , and never delivered on the promised 8 a day to BHD as yet anyway

Something just tells me BA will take any slots they can from IRELAND or Domestic UK and switch them toLonghaul when they get the planes

Why else have they no interest in serving some very busy routes.

I think there is more chance of FR buying IAG , for cash , than there is of EI selling BA their slots for BA to divert these slots away from IRELAND or Domestic UK ,

But who knows MOL always has a plan and he sure wants to expand and has the cash for IAG which is not performing well at all ......

[akerosid]

The Minister for Transport has just announced formally that the government will not be selling its 25% share in Aer Lingus to Ryanair.

[EI-A330-300]

Irish Gov have officaly confirned they will not sell Aer Lingus 25% share to Ryanair.

[VanBosh]

If cleared by EU they could still buy 75% but unlikely staff will sell their share either. The govt have announced they will appoint advisors in the new year so perhaps someone else will buy it. Who knows Ryanair may then try to buy that entity!

I just get the impression that a transformational move is coming for EI, I'm not sure what but whoever buys the govt. stake will give an indication. I know WW has said IAG aren't interested but the pension issue will have to be sorted before any sale and with such slots at LHR would IAG not be missing out big time not to go after it.

The number of services for EI, TK & EY added in last 5 years, a recessionary time in IRL shows the demand is there, surely this must be at BA's expense so perhaps that is causing the relationship change?

[Hangar6]

FR takeover

still

EI will look to make a purchase of annother carrier , they have to grow
BA have lost the feed traffic no matter who they choose to code share with and I still think they will come back to EI and re visit the code share as they need those DUBLHR and BHDLHR slots to fly to all those places in CHINA and India with unpronouncable names.

EI are currently well run and VERY succesful but a small player.

Intersting times but its great that such a tiny wee ISLAND has two profitable shothaul carriers in these tough times , and maybe even RE and WX will get going again ,

[mart901]

Ireland may very well have 3 profitable airlines soon as stobarts are investing into RE/new ATR's. Be interesting to see what routes come out of that.

[VanBosh]

EI will look to make a purchase of annother carrier , they have to grow"

Who could they buy?

[brian_dromey]

I would hesitate to call FR and irish airline for the purposes of this discussion. FR flies a large multitude of routes across Europe and makes no reference to the profitability of individual routes. While FR is an Irish company, its reach stretches far beyond the island, although IRL-UK routes are thought to be some of the most profitable in the netowrk. By the same token cityJet has a very small presence in the Irish market. You could argue that FR and WX are profitable in spite of their Irish operations, rather than because of them.

[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. EI is going nowhere, has an appaling balance sheet when the pension liabilities are included and every development plan they have followed has failed. It looks as if they are heading for that giant airline scrapheap in the sky.

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.

[dublinaviator]

Originally Posted by brian_dromey

I would hesitate to call FR and irish airline for the purposes of this discussion. FR flies a large multitude of routes across Europe and makes no reference to the profitability of individual routes. While FR is an Irish company, its reach stretches far beyond the island, although IRL-UK routes are thought to be some of the most profitable in the netowrk. By the same token cityJet has a very small presence in the Irish market. You could argue that FR and WX are profitable in spite of their Irish operations, rather than because of them.

Their HQ is in Ireland, all their staff are on Irish contracts, they pay tax in Ireland, they operate on an Irish AOC, and their aircraft are registered in Ireland. While they are very much spread across Europe, they are by all means an Irish airline.

I wonder would you be so quick to dismiss Aer Lingus as an Irish airline even though they've had bases residing outside Ireland...

[Hangar6]

FR bid

OK so most of us rational aviation profesionals got good news today.

I have worked for both airlines and am not currently in an airline so I do want both of them to be a continued success.

FR board.... getting more Irish and politicaltoo.....Julie is interesting she saved FR back in the day they were bankrupt, she got TD Brennan to get EI out of STN , the ideawas to have two Irish airlines competing against non Irish airlines....nice to see her influence already .

MOL loosing his moutpiece , young Steve, wonder why they fell out ?

Thousands of Iirsh real Iirsh real tax paye paying jobs saved by todays decision , against FR agency staffing policy...

Arill challenges for EI , MOL is right they need to grow and there is no growth in Ireland or UK

So that list, a very short list these days of EU , winter sun shine based , airbus airlines that good be bought ha to be dusted down by Hangar 6...

EI cannot make a profit in all 4 quarters of the year, three is impressive but nov-jan is brutal on all Northern Hemiphere airlines , so EI must get an outlet where they can send 6 hulls and crew to work a winter for profit....
They tried this with WW in PMI before , this needs a re visit .

Being able to move your fleet to a profitable location was what started FR back in the day, EI moved a B747 to Thailand

Time to look at this a gain.

Oddly enough given their cash and good current KPI 's the time is right to purchase ....

any specualtion on what airline is up for sale with something to offer, ?

[Jamie2k9]

although IRL-UK routes are thought to be some of the most profitable in the network.

Remember the IRL-UK market (largely DUB market) has changed a lot since 2006/7 and routes once profitable are now heavily loss making.

Their HQ is in Ireland, all their staff are on Irish contracts, they pay tax in Ireland, they operate on an Irish AOC, and their aircraft are registered in Ireland. While they are very much spread across Europe, they are by all means an Irish airline.

Many UK based staff are on UK contracts and the UK is probably the largest or close to it for FR employment.

[Cyrano]

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?

[Meccano]

In a pigs eye.....

[dublinaviator]

Originally Posted by Jamie2k9

Many UK based staff are on UK contracts and the UK is probably the largest or close to it for FR employment.

Granted, they have a UK holding company under which UK workers are employed, but the majority of their staff are on Irish contracts and pay Irish taxes. The point still stands, Ryanair is as Irish if not more so than Aer Lingus who also have a UK holding company and employ UK workers under UK contracts (and yet nobody is arguing Aer Lingus aren't Irish...).

It's just typically Irish that we have a company that is a world leader in their industry (one of a few such Irish companies) and one of the biggest airlines in the world, which we should proud of and yet some people don't even consider them Irish. And then we turn around and welcome the US multinationals with open arms as if they are Irish companies.

[Aerlingus231]

I think the point people were trying to make was that Aer Lingus is more dependent on Ireland, where as it only represents a fraction of Ryanair's operations.

In other words, Ryanair could cut all routes from Ireland tomorrow and still be a fairly well functioning airline, if Aer Lingus on the other hand did that, they'd only have 2-3 charter routes on their books out of LGW, with no other routes to survive on.

[brian_dromey]

No one is saying FR are not Irish. The point is that the majority of FR's operations take place outside of Ireland. FR does not break down route profitability by individual route, rightly so. This makes it hard to compare FR and EI in terms of profitability, if you do you have to assume that FR's Irish operations provide the almost the entirity of FR's cashflow, profits/losses, which I dont think is a safe assumption.