Aer Lingus - 6
Sharks are circling and it's all very dangerous for Aer Lingus and employees right now - it's all about persuading investors, Irish Govt and Brussels right now. Aer Lingus will need to be paying a LOT of money for political lobbyists, public relations, lawyers, bank and other advisers in their defence. You may think this would be bad for Ireland, but the message needs to be put out to all the decision makers involved
Last edited by davidjohnson6; 6th Feb 2013 at 07:27.
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The market price of EI shares has hit 1.30 this morning, in advance of the FY results due later. I predict the price will climb higher.
So, with the share price at 1.31 or above, what is the advantage for a shareholder to sell to FR at 1.30?
O'Leary will have to increase his offer, significantly. As I predicted.
The Irish Government have already said they won't sell to him. Personally I believe they will, but only if the price is right, and that means MONEY.
Lots and lots of MONEY.
Since FR is offering 100M in cash to FlyBE they obviously have it to spend and are willing to spend it. That 100M, if applied to the bid offer price, would increase the offer to 1.50 per share.
Still not good enough, but you can see where this is heading.
So, with the share price at 1.31 or above, what is the advantage for a shareholder to sell to FR at 1.30?
O'Leary will have to increase his offer, significantly. As I predicted.
The Irish Government have already said they won't sell to him. Personally I believe they will, but only if the price is right, and that means MONEY.
Lots and lots of MONEY.
Since FR is offering 100M in cash to FlyBE they obviously have it to spend and are willing to spend it. That 100M, if applied to the bid offer price, would increase the offer to 1.50 per share.
Still not good enough, but you can see where this is heading.
Last edited by Meccano; 6th Feb 2013 at 07:53.
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De facto, buying out Flybe with the 100m deal.
If FR get EIN, you will see EIN off the map within 5 yrs.....mass unemployment in EIN with euro contractors taking their place.
This is end game stuff....lots of smoke n mirrors going on in backround.
If FR get EIN, you will see EIN off the map within 5 yrs.....mass unemployment in EIN with euro contractors taking their place.
This is end game stuff....lots of smoke n mirrors going on in backround.
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Results
Great set of result, CEO has said this morning that Flybe proposels are "not going to fly".
Also saw on points on the presentations:
1 - New summer schedule 2013 has triggered the strongest revenue bookings in our history for consecutive days in January 2013
2 - New Summer schedule 2013 is attractive to partners and has caused multiple code share/interline requests.
3 - Wet Lease of A330-200 for 3 winter seasons to a tour operator to operate various Caribbean routes. Details disclused in due course.
Also saw on points on the presentations:
1 - New summer schedule 2013 has triggered the strongest revenue bookings in our history for consecutive days in January 2013
2 - New Summer schedule 2013 is attractive to partners and has caused multiple code share/interline requests.
3 - Wet Lease of A330-200 for 3 winter seasons to a tour operator to operate various Caribbean routes. Details disclused in due course.
Last edited by j636; 6th Feb 2013 at 11:12.
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Aer Arann would be gone as well (more job losses) - An airline that has recovered significantly in the past 2 years from bankrupcy to become a real player in the regional space through its relationship with EI and provided significant customer choice to some destinations where they compete with Ryanair
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If the deal is to be approved and if I was in EIN management I would immediately mount a take over bid for the loss making Flybe straight away. A market capitilisation of just 36 or so million is small change to Aer Lingus. Throw a 30% margain on top of this and it would make it attractive to Flybe shareholders who without it face a very uncertain future. This would throw an Flybe/Ryanair deal out the window. I would also make it clear that it would be the end of Flybe management in its current form. This deal for Flybe in my opinion one way or another could ultimately sink the company. If the bid is succesful it may sink it very quickly or if not it will almost certainly be the death of the company within a few years. The only airline in my opinion that would merit a deal such as the one proposed to compete would have been Easyjet. Had this been the case it would be approved at European level. They would have posed an enormous threat to Ryanair and as such they picked the vulnerable loss making regional airline instead knowing that when they sneeze in a couple of years time they will annihilate them for good.
An approval like this as proposed in it's current format would be nothing short of collusion of the highest order allowing one company to effectively pay another through a combination of cash and assests to collude in taking out it's main opposition. Not it's own cash it has to be said either. Not only should it not be allowed, in my opinion it should not even be allowed as a proposition in the first place. With all the rules and regulations at corporate level these days I'm surprised it's even legal to make such a proposition. The sooner the EU dismiss this the better and let Aer Lingus and Ryanair both continue to compete for the better of the consumer. This proposed takeover is nothing short of establising an ultimate monopoly of unprecedented levels in a very short time.
An approval like this as proposed in it's current format would be nothing short of collusion of the highest order allowing one company to effectively pay another through a combination of cash and assests to collude in taking out it's main opposition. Not it's own cash it has to be said either. Not only should it not be allowed, in my opinion it should not even be allowed as a proposition in the first place. With all the rules and regulations at corporate level these days I'm surprised it's even legal to make such a proposition. The sooner the EU dismiss this the better and let Aer Lingus and Ryanair both continue to compete for the better of the consumer. This proposed takeover is nothing short of establising an ultimate monopoly of unprecedented levels in a very short time.
Last edited by Lord Lardy; 6th Feb 2013 at 12:01.
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It's over. MOL lost. The remedies are farcical. He's cornered and desperate. When will his board cut him off.
I never underestimated his abilities in this process, however, now its very clear he's lost his way.
There is nothing radical about his remedy package, he's having a laugh now and is abusing Flybe.
Time to move on, if he wants to be rid of AL, why not take them on toe to toe out of Dublin and see who's left standing. Its been an irritating few years watching him clown around.
I never underestimated his abilities in this process, however, now its very clear he's lost his way.
There is nothing radical about his remedy package, he's having a laugh now and is abusing Flybe.
Time to move on, if he wants to be rid of AL, why not take them on toe to toe out of Dublin and see who's left standing. Its been an irritating few years watching him clown around.
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Understanding MOLs motivation for a takeover is telling of a lot of tales and potentially shows where the weaknesses in the FR model are plus the lengths FR will go to wipe out the the potential theats...
The net effect for the Island of Ireland (ROI & NI) will be a loss of jobs, jobs will go abroad, NI base closed and potentially service go to UK airlines ie BA on London, where their crew are London based. Plus an impact on tourism, why would FR grow from airport with higher costs than many of the EU alternatives.
This 3 year deal on EI routes is for a short time and after that period the question is what will happen then? Is the EU thinking about the long run or only the next 3 years. Very short sighted me thinks...
EI-BUD
- A strong brand in its home territory who has managed costs to be competitive against FR who's sole USP is price - hence when the FR model cannot wipe this out, or make the yield required in competing markets, the easiest thing is to use your cash reserves to take it over hence oliminate the threat
- I believe that FR struggle on some routes against EI and EIR, e.g. Bristol, etc. FR cannot penetrate EI to the extent where EI cannot manage due to EI reasonable cost base, and ability to use interconnetions.
- EIR, through the EI branding can compete and win in commuter markets where 738 cannot fit in terms of their size, this issue will not go away and 'linking up' with BE is a very clever attempt to disarm a competitor that they cannot penetrate on thin regional routes.
The net effect for the Island of Ireland (ROI & NI) will be a loss of jobs, jobs will go abroad, NI base closed and potentially service go to UK airlines ie BA on London, where their crew are London based. Plus an impact on tourism, why would FR grow from airport with higher costs than many of the EU alternatives.
This 3 year deal on EI routes is for a short time and after that period the question is what will happen then? Is the EU thinking about the long run or only the next 3 years. Very short sighted me thinks...
EI-BUD
Last edited by EI-BUD; 6th Feb 2013 at 12:26.
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"It seems to me so far fetched, this proposition, that we don't bother wasting our time on it," Aer Lingus chief executive Christoph Mueller told journalists.
"We question very much that Flybe will be an independent competitor to Ryanair and we are working from the assumption that we will be around next year when we talk" at Aer Lingus's 2013 results announcement, he said.
"We question very much that Flybe will be an independent competitor to Ryanair and we are working from the assumption that we will be around next year when we talk" at Aer Lingus's 2013 results announcement, he said.
"I gave you 100M of my money - you do as I effing tell you, or else". etc etc.
When you deal with the devil you better be ready for the consequences.
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Meccanos final line is particularly apt.
The Fly Be CEO can't far from retirement. This arrangement would get him over the next few years as MOL's yesman after which he could be off with his bag of gold.
The Fly Be CEO can't far from retirement. This arrangement would get him over the next few years as MOL's yesman after which he could be off with his bag of gold.
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It does smell more and more of desperation with each passing day. As FR barters off bits of EI here and there to other carriers (why they lower themselves to get involved in this, I don't know - maybe desperation on BE's part?), it becomes more and more clear that FR's and MOL's aim is to kill Aer Lingus; it IS about stifling competition and frankly, I think we've got to the stage where if the EU Competition Commissioner were to approve this proposal, its reputation would be permanently tarnished.
I think EI-BUD hits the nail on the head when talking about EI Regional; this has been a big success. This has been a major thorn in FR's side and one can understand FR wanting to get rid of it. It is only likely to expand, thus putting further pressure on FR's Ireland-UK regional routes.
I think the question now is, what happens when the bid is rejected again? MO'L/FR can't be forced to sell, but might the UK OFT investigation be a weapon to force FR to sell up? Probably grasping at straws, but perhaps the OFT is taking note of the desperate means FR is using to destroy (not just take over) Aer Lingus and it must now be clear that FR is a hostile shareholder - and its continued shareholding of EI is not in the public interest.
I think EI-BUD hits the nail on the head when talking about EI Regional; this has been a big success. This has been a major thorn in FR's side and one can understand FR wanting to get rid of it. It is only likely to expand, thus putting further pressure on FR's Ireland-UK regional routes.
I think the question now is, what happens when the bid is rejected again? MO'L/FR can't be forced to sell, but might the UK OFT investigation be a weapon to force FR to sell up? Probably grasping at straws, but perhaps the OFT is taking note of the desperate means FR is using to destroy (not just take over) Aer Lingus and it must now be clear that FR is a hostile shareholder - and its continued shareholding of EI is not in the public interest.
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We will also fly one Airbus A330 aircraft during the next two winter seasons, with an option for a further one, on behalf of a major European tour operator which will improve aircraft utilisation in the low season.
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FR Takeover
Can I just ask what positives would come out of this if FR took over EI for the public...absolutely none.
It's a complete mess, all O'Leary wants is to get rid of the only airline that can successfully compete with FR head to head. Dominate Irish aviation and get a hold of those all important long haul routes.
Oh but BE will be competing with FR ?
Flybe, the airline in huge financial troubles and with hardly any brand recognition on the republic ? Should do well... Oh and BA will acquire the Ireland-LHR routes, I wonder how long that will last...
This isn't like BA taking over BMI, I think we sort of seen that coming, BMI were a loss making airline, however Aer Lingus are profitable and are growing, constantly growing. This year we'll probably see a huge increase on Transatlantic EI flights, EIR will expand also.
Why get rid of Aer Lingus ? With them all important LHR slots and AMS slots which are vital for BHD, ORK, SNN and DUB. If this takeover bid doesn't go ahead, look how far EI can expand. A350s for long haul routes and possibly to Asia. A321 Neos at Shannon, Cork and Belfast to expand transatlantic wise whilst making a profit.
I don't care what people say, Aer Lingus are Ireland's National Carrier, Ireland's airline, one of the oldest out there with a long and interesting history. So why get rid of it ?
Just look at the collapse of Malev... FR were in Budapest like a shot with big expansion plans and look what's happened now...
If this takeover bid gets the go ahead I will literally loose faith in humanity
It's a complete mess, all O'Leary wants is to get rid of the only airline that can successfully compete with FR head to head. Dominate Irish aviation and get a hold of those all important long haul routes.
Oh but BE will be competing with FR ?
Flybe, the airline in huge financial troubles and with hardly any brand recognition on the republic ? Should do well... Oh and BA will acquire the Ireland-LHR routes, I wonder how long that will last...This isn't like BA taking over BMI, I think we sort of seen that coming, BMI were a loss making airline, however Aer Lingus are profitable and are growing, constantly growing. This year we'll probably see a huge increase on Transatlantic EI flights, EIR will expand also.
Why get rid of Aer Lingus ? With them all important LHR slots and AMS slots which are vital for BHD, ORK, SNN and DUB. If this takeover bid doesn't go ahead, look how far EI can expand. A350s for long haul routes and possibly to Asia. A321 Neos at Shannon, Cork and Belfast to expand transatlantic wise whilst making a profit.
I don't care what people say, Aer Lingus are Ireland's National Carrier, Ireland's airline, one of the oldest out there with a long and interesting history. So why get rid of it ?
Just look at the collapse of Malev... FR were in Budapest like a shot with big expansion plans and look what's happened now...
If this takeover bid gets the go ahead I will literally loose faith in humanity
Last edited by Mlinnie; 6th Feb 2013 at 18:04.
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Well Thomas Cook are getting an extra A330 next winter season which is in a different configuration to their current ones, to operate some new routes to the caribbean ex. MAN, a case of 2 and 2 make 4?
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Well Thomas Cook are getting an extra A330 next winter season which is in a different configuration to their current ones, to operate some new routes to the caribbean ex. MAN, a case of 2 and 2 make 4?