Ryanair Seals £15 Million Buzz Deal
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Ryanair Seals £15 Million Buzz Deal
On ITV Teletext...
The low cost airline Ryanair has struck a deal to buy
rival Buzz for £15 million.
Buzz operates 21 routes from London Stansted - Ryanair
main uk base - to Germany,France and Spain, as well as
two Domestic routes.
Dublin Based Ryanair, Owned by Dutch Airline KLM,
Said the deal allowed it to expand at Stansted and plans to shut
several of Buzzs unprofitable routes.
The low cost airline Ryanair has struck a deal to buy
rival Buzz for £15 million.
Buzz operates 21 routes from London Stansted - Ryanair
main uk base - to Germany,France and Spain, as well as
two Domestic routes.
Dublin Based Ryanair, Owned by Dutch Airline KLM,
Said the deal allowed it to expand at Stansted and plans to shut
several of Buzzs unprofitable routes.
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Ryanair reaches agreement with KLM to buy BUZZ
Ryanair Holdings plc, the No.1 low fares airline in Europe today announced that it had reached agreement with KLM to take over Buzz for a total payment of €23.9m (less than £15m) which it will fund from its own substantial cash reserves without any recourse to the markets. Highlights of this transaction include;
Ryanair will buy the entire issued share capital of Buzz for a total of €23.9m (£14.95m). Since Buzz will have €19m (£11m) of cash on completion the net cost of this purchase is less than €5m.
The acquisition will be funded from Ryanair’s existing cash deposits which presently exceed €1.05 billion, so the cost is nominal to Ryanair.
In the year to 31 March 2003 Buzz will fly just under 2m passengers, generating revenues of €140m, with a forecast double digit PBT loss.
Buzz currently operates a network of 21 routes from London Stansted to points in Germany, Holland, France and Spain, as well as two French domestic routes. The company will operate a fleet in Summer 2003 of 6 x BAe 146 aircraft and 6 x Boeing 737-300’s.
As part of the transaction KLM have agreed to take back all of the remaining BAe146 aircraft at the end of the financial year (31/3/04). We currently plan that these will be replaced by more efficient Boeing 737’s.
The management believe that by applying Ryanair’s low fares/low cost formula, the traffic in Buzz can be increased this year from under 2m to over 4m passengers and the operating losses will be eliminated and profitability achieved.
The acquisition is expected by the Directors of Ryanair to make a positive contribution to Ryanair’s earnings per share in the coming financial year (end 30 March 2004).
This acquisition, which has been approved by the Boards of KLM and Ryanair, is expected to be completed, subject to regulatory approval on 1 April next.
Michael O’Leary, Chief Executive of Ryanair said: “The timing of this acquisition is opportunistic. Since Ryanair is growing strongly by rolling out our lowest fare services all over Europe, the last thing we need is the distraction of an acquisition. However there are a number of features of Buzz which makes this a favourable move at this time including:
Buzz operates 21 routes from London Stansted which is Ryanair’s main UK base, thereby making it’s turnaround easy to manage.
The acquisition of Buzz allows Ryanair to further expand at Stansted, London’s third main airport, and is a timely strategic move.
The cost of the Buzz acquisition is nominal at a net cash cost of under €5m, which will be a bargain if we can- as we expect - turn it around in one year.
Buzz’s operation suffers from two structural cost problems, (1) an inappropriate expensive fleet and (2) expensive congested airports. Ryanair can and will resolve both problems within 12 months.
Ryanair will significantly rationalise Buzz’s operations by closing a number of high cost unprofitable routes and operating the remaining routes at increased frequency, lower fares and much lower costs.
Buzz’s BAe-146 fleet will be redelivered without cost to KLM within the year, to be replaced by significantly more efficient Boeing 737’s.
“I am confident that this significant and timely rationalisation will eliminate these losses in Buzz over the coming year. With a change of aircraft fleet Buzz will be in a position to match Ryanair’s low fare, profitable growth from 2004 onwards.
“Customers of Buzz can look forward to new routes, increased frequency, larger aircraft and significantly lower air fares from 1 April onwards. We will be announcing details of this reorganisation including new routes, frequencies, lower fares and timetables before the end of February as we implement our plan to transform Buzz into a growing, profitable operation.
“Since the Buzz acquisition will not take place until 1 April at the earliest, the current Buzz losses will have no impact on Ryanair’s full year earnings forecasts. Whilst it has been our policy to avoid acquisitions, this opportunity, at this nominal cost is the type of offer which we could not refuse. The financial cost is small and the diversion of management time will be minimal since Buzz is based at our main UK base. We have a simple and effective plan to turn it around by delivering lower fares, rapid traffic growth and Ryanair type profitability once the BAe146 fleet has been returned to KLM. I am confident that Buzz will thereafter make a proportionate and significant contribution to Ryanair Holdings’ revenues and profitability.
As Ryanair is due to report Q.3 results on Tuesday morning (4 Feb’03) we are currently in a closed period, and will not be making any further comment on this matter until then. A full analysts briefing and subsequent press conference are scheduled for Tuesday morning in London for this purpose.
Ryanair Holdings plc, the No.1 low fares airline in Europe today announced that it had reached agreement with KLM to take over Buzz for a total payment of €23.9m (less than £15m) which it will fund from its own substantial cash reserves without any recourse to the markets. Highlights of this transaction include;
Ryanair will buy the entire issued share capital of Buzz for a total of €23.9m (£14.95m). Since Buzz will have €19m (£11m) of cash on completion the net cost of this purchase is less than €5m.
The acquisition will be funded from Ryanair’s existing cash deposits which presently exceed €1.05 billion, so the cost is nominal to Ryanair.
In the year to 31 March 2003 Buzz will fly just under 2m passengers, generating revenues of €140m, with a forecast double digit PBT loss.
Buzz currently operates a network of 21 routes from London Stansted to points in Germany, Holland, France and Spain, as well as two French domestic routes. The company will operate a fleet in Summer 2003 of 6 x BAe 146 aircraft and 6 x Boeing 737-300’s.
As part of the transaction KLM have agreed to take back all of the remaining BAe146 aircraft at the end of the financial year (31/3/04). We currently plan that these will be replaced by more efficient Boeing 737’s.
The management believe that by applying Ryanair’s low fares/low cost formula, the traffic in Buzz can be increased this year from under 2m to over 4m passengers and the operating losses will be eliminated and profitability achieved.
The acquisition is expected by the Directors of Ryanair to make a positive contribution to Ryanair’s earnings per share in the coming financial year (end 30 March 2004).
This acquisition, which has been approved by the Boards of KLM and Ryanair, is expected to be completed, subject to regulatory approval on 1 April next.
Michael O’Leary, Chief Executive of Ryanair said: “The timing of this acquisition is opportunistic. Since Ryanair is growing strongly by rolling out our lowest fare services all over Europe, the last thing we need is the distraction of an acquisition. However there are a number of features of Buzz which makes this a favourable move at this time including:
Buzz operates 21 routes from London Stansted which is Ryanair’s main UK base, thereby making it’s turnaround easy to manage.
The acquisition of Buzz allows Ryanair to further expand at Stansted, London’s third main airport, and is a timely strategic move.
The cost of the Buzz acquisition is nominal at a net cash cost of under €5m, which will be a bargain if we can- as we expect - turn it around in one year.
Buzz’s operation suffers from two structural cost problems, (1) an inappropriate expensive fleet and (2) expensive congested airports. Ryanair can and will resolve both problems within 12 months.
Ryanair will significantly rationalise Buzz’s operations by closing a number of high cost unprofitable routes and operating the remaining routes at increased frequency, lower fares and much lower costs.
Buzz’s BAe-146 fleet will be redelivered without cost to KLM within the year, to be replaced by significantly more efficient Boeing 737’s.
“I am confident that this significant and timely rationalisation will eliminate these losses in Buzz over the coming year. With a change of aircraft fleet Buzz will be in a position to match Ryanair’s low fare, profitable growth from 2004 onwards.
“Customers of Buzz can look forward to new routes, increased frequency, larger aircraft and significantly lower air fares from 1 April onwards. We will be announcing details of this reorganisation including new routes, frequencies, lower fares and timetables before the end of February as we implement our plan to transform Buzz into a growing, profitable operation.
“Since the Buzz acquisition will not take place until 1 April at the earliest, the current Buzz losses will have no impact on Ryanair’s full year earnings forecasts. Whilst it has been our policy to avoid acquisitions, this opportunity, at this nominal cost is the type of offer which we could not refuse. The financial cost is small and the diversion of management time will be minimal since Buzz is based at our main UK base. We have a simple and effective plan to turn it around by delivering lower fares, rapid traffic growth and Ryanair type profitability once the BAe146 fleet has been returned to KLM. I am confident that Buzz will thereafter make a proportionate and significant contribution to Ryanair Holdings’ revenues and profitability.
As Ryanair is due to report Q.3 results on Tuesday morning (4 Feb’03) we are currently in a closed period, and will not be making any further comment on this matter until then. A full analysts briefing and subsequent press conference are scheduled for Tuesday morning in London for this purpose.
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Hi folks
Does the purchase of Buzz by Ryanair mean that the two airlines are going to merge and become one, a bit like easyJet and Go??
Cheers
PS: Buster the Bear, thanks for copying and pasting Ryanair's article.
Does the purchase of Buzz by Ryanair mean that the two airlines are going to merge and become one, a bit like easyJet and Go??
Cheers
PS: Buster the Bear, thanks for copying and pasting Ryanair's article.
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Ryanair orders 100 new Boeing 737-800s to a value of $6 billion as traffic growth rises to 35%
Ryanair, Europe’s No.1 low fares airline and Boeing, the world’s biggest manufacturer of commercial aircraft, today announced that Ryanair have ordered an additional 100 new Boeing 737-800 series aircraft to facilitate Ryanair’s rapid European growth plans.
The news comes less than a year after both Ryanair and Boeing announced the record aircraft order of 150 737-800’s – the largest single firm order for Next Generation 737’s ever made.
In addition to the 103 firm orders already placed, Ryanair have added 22 further firm orders and increased its option orders by 78 to 125. This will, over the next 8 years, give Ryanair a total fleet of 250 Boeing 737-800’s, giving Ryanair the youngest aircraft fleet in Europe and the second largest operator of the most successful jetliner in the world, behind Southwest in the U.S.
Ryanair was the pioneer of low fare air travel in Europe, and is the No.1 low fares carrier with over 100 destinations across 15 countries. In the year ending March 03, Ryanair will carry over 15million passengers, an increase of 35% on the pervious year, making Ryanair the 4th largest international scheduled airline in Europe. Ryanair currently operates a fleet of 50 Boeing 737’s and this new order will enable Ryanair to grow to more than 50Million passengers per annum, which will make Ryanair Europe’s No.1 international scheduled airline.
These new aircraft will create 3000 new jobs in Ryanair, with over 800 pilots, more than 2000 cabin crew and over 200 engineering and operational people.
Announcing details of this order today in London, Ryanair’s Chief Executive, Michael O’Leary said:
“Ryanair and Boeing started this European low fares air travel revolution in 1990 – but that was just the beginning. Today the Ryanair low fares revolution continues as millions of European consumers are now discovering that they can fly all over Europe for just €48.00, and with Ryanair they get the best on time services and brand new Boeing 737-800 aircraft – the best short haul jet aircraft in the world.
To celebrate today’s announcement of 100 new aircraft, Ryanair are giving away 100,000 seats at just £1 !.
Ryanair, Europe’s No.1 low fares airline and Boeing, the world’s biggest manufacturer of commercial aircraft, today announced that Ryanair have ordered an additional 100 new Boeing 737-800 series aircraft to facilitate Ryanair’s rapid European growth plans.
The news comes less than a year after both Ryanair and Boeing announced the record aircraft order of 150 737-800’s – the largest single firm order for Next Generation 737’s ever made.
In addition to the 103 firm orders already placed, Ryanair have added 22 further firm orders and increased its option orders by 78 to 125. This will, over the next 8 years, give Ryanair a total fleet of 250 Boeing 737-800’s, giving Ryanair the youngest aircraft fleet in Europe and the second largest operator of the most successful jetliner in the world, behind Southwest in the U.S.
Ryanair was the pioneer of low fare air travel in Europe, and is the No.1 low fares carrier with over 100 destinations across 15 countries. In the year ending March 03, Ryanair will carry over 15million passengers, an increase of 35% on the pervious year, making Ryanair the 4th largest international scheduled airline in Europe. Ryanair currently operates a fleet of 50 Boeing 737’s and this new order will enable Ryanair to grow to more than 50Million passengers per annum, which will make Ryanair Europe’s No.1 international scheduled airline.
These new aircraft will create 3000 new jobs in Ryanair, with over 800 pilots, more than 2000 cabin crew and over 200 engineering and operational people.
Announcing details of this order today in London, Ryanair’s Chief Executive, Michael O’Leary said:
“Ryanair and Boeing started this European low fares air travel revolution in 1990 – but that was just the beginning. Today the Ryanair low fares revolution continues as millions of European consumers are now discovering that they can fly all over Europe for just €48.00, and with Ryanair they get the best on time services and brand new Boeing 737-800 aircraft – the best short haul jet aircraft in the world.
To celebrate today’s announcement of 100 new aircraft, Ryanair are giving away 100,000 seats at just £1 !.
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Jeans admits ex-boss got 'stunning bargain’
MyTravelLite's managing director Tim Jeans has said that Ryanair’s takeover of Buzz will allow it to steal a march on rival easyJet.
Jeans was formerly marketing director at Ryanair before joining MyTravel’s low-cost carrier in June.
He said that "picking up the Buzz slots at Stanstead is a stunning bargain and allows Ryanair to steal a march on easyJet who are still struggling to build up their Gatwick operation."
He dismissed Buzz as a “classic example of a full service airline trying to fix an underperforming operation by painting the planes a different colour, and calling it low cost.”
Last paragraph. Could he also be talking of My Travel and My Travel Lite?
MyTravelLite's managing director Tim Jeans has said that Ryanair’s takeover of Buzz will allow it to steal a march on rival easyJet.
Jeans was formerly marketing director at Ryanair before joining MyTravel’s low-cost carrier in June.
He said that "picking up the Buzz slots at Stanstead is a stunning bargain and allows Ryanair to steal a march on easyJet who are still struggling to build up their Gatwick operation."
He dismissed Buzz as a “classic example of a full service airline trying to fix an underperforming operation by painting the planes a different colour, and calling it low cost.”
Last paragraph. Could he also be talking of My Travel and My Travel Lite?
