Aer Lingus - 6

[racedo]

Yeah, whatever you say. It's not his money, I agree, but he's the CEO and responsible for all the time energy and cash wasted in the futile effort to takeover EI.
They might well get their money back, more by luck than planning, and thanks to his mate Willy. But the loss of face is enormous. He failed - with a Capital F - to destroy his only home competitor.
Besides that, it has been a waste of his time and energy, a 7 year distraction that led to absolutely zilch.
If IAG wasn't interested in buying right now he'd be facing a fire sale, forced on him by the courts, and a financial wipeout.
The fact that he's got nothing to say any more just shows he's beaten, and accepts it.
Ta Ra.

So much anger.

Lets see Ryanair in 2006 was talking of Passengers numbers of 35 million, Revenue of €1.7 billion and profits of €300 Million, in 2015 its roughly 90 million passengers and profits of around €800 million plus giving shareholders €520 million in February 2015.

yup they really have struggled.

[Algol]

If he stuck to the knitting he might be doing even better.
As to anger - nothing to me mate,but I enjoy seeing assholes get egg on their face.

[BFS watcher]

BFS have been back in court last week with Aer Lingus. Looks like the move to BHD will be very expensive.

[Epsomdog]

The late flights from Cork and Dublin to Heathrow have been cancelled today due to anticipated weather.


I think you'll find these are planned cancelations, due poor loads. There are a few flights chopped next week as well.

No sense in flying empty aircraft!

[alserire]

Anyone know why EI763 from Tenerife diverted to PXO today? Seems to be cancelled now.

[EI-BUD]

BFS Watcher;
Why does it look like it will be a very expensive move to BHD? Is the case complete? My reckoning would be that EI made the greatest investment of resources into BFS, and beyond 5 years sounds like an excessive contract length without a break ...

When does the case conclude?

EI-BUD

[Jack1985]

Anyone know why EI763 from Tenerife diverted to PXO today? Seems to be cancelled now.

Tech issue. Estimating to depart at 21:40 from PXO, estimated in DUB for 01:35.

[alserire]

Dublin airport showed it as cancelled and is still showing it as cancelled. Not the first time they've done this.

[Hangar6]

Thelingussource.com

Gives the picture !

[Jack1985]

Third offer tabled by IAG. €2.50 a share, values Aer Lingus Group plc at €1.3bn.

[Una Due Tfc]

Ryanair paid €2.60? That could be the magic number

[AerRyan]

British airways really don't like upping their offers much. This attempt will probably fail too, I don't see them being third time lucky. As mentioned earlier €2.60 might suffice but I'd think higher.

[Hangar6]

Well to be fair British Airways have not made a bid offer, IAG have and this is a Spainish based holding company who will bid only what they see is a fair price given their shareholders have to meet and approve any increased offer ,

It seems to me IAG really want EI , but want a fair price , I think after three offers EI have to put it to the shareholders , given only 2 large shareholders
FR and Irish Gov then these two get to decide ? Interesting weekend ahead
For some, still €2.50 is getting there , FR paid an average price of €2.57 I think so just a wee bit more ,,,,

[EI-A330-300]

Suspect IAG will have to drop conditions also, not just about the price!

I think EI could easoly squeese another offer of 2.60-65 from IAG after that I think IAG might give it a break for a while.

Would love to know CM view and how much of an infulence he is having in the background.

[Una Due Tfc]

Looks like they may have done it

Aer Lingus board ?set to accept IAG takeover bid? (http://www.irishtimes.com/business/transport-and-tourism/aer-lingus-board-set-to-accept-iag-takeover-bid-1.2078736)

[AerRyan]

I think that's a bad decision if its made. They could milk IAG for another few cents per share. Although AerLingus were never much good at cutting deals were they? They didnt milk Airbus at all.

[racedo]

Well to be fair British Airways have not made a bid offer, IAG have and this is a Spainish based holding company who will bid only what they see is a fair price given their shareholders have to meet and approve any increased offer ,

It seems to me IAG really want EI , but want a fair price , I think after three offers EI have to put it to the shareholders , given only 2 large shareholders
FR and Irish Gov then these two get to decide ? Interesting weekend ahead
For some, still €2.50 is getting there , FR paid an average price of €2.57 I think so just a wee bit more ,,,,

Completely irrelevant what FR paid as the loss in value was written down years ago to virtually nothing, any sale will immediately generate a substantial profit and lots of cash coming in.

[EI-BUD]

I think that's a bad decision if its made. They could milk IAG for another few cents per share. Although AerLingus were never much good at cutting deals were they? They didnt milk Airbus at all.

AerRyan,

And you know this how?

AerLingus have survived and thrived in the face of huge rivalry from Europe's lowest cost airline. This does not sound like an airline that was 'much good at cutting deals'.

EI-BUD

[GAZMO]

Going by the BBC business web page they are saying that EI are going to accept?

[j636]

Going by the BBC business web page they are saying that EI are going to accept?

More a case of because EI have not rejected it yet, they are putting 2 and 2 together and coming up with 5. We won't know until Monday unless they release a statement tomorrow.

[racedo]

If they were rejecting they would issue a press statement, likely that media have already been in touch and received indications that board wished to approve.

Of course ulimately its shareholders that decide whether they wish to sell their shares NOT the board.

[wallp]

In purely operational terms, it sounds on the face of it to be a decent fit. Aer Lingus offer a network which is mostly complimentary to IAG (British Airways).

Presumably BA, will shift the slots it currently uses from LHR to DUB & BHD onto other routes allowing new services to open and move Ireland bound passengers onto EI flights and IAG gets a hub in DUB.

[Skipness One Echo]

When BA merged with Iberia they did not pull out of LHR-MAD, I suspect consolidation of frequencies but I don't think BA will step away from Ireland again. They don't have long haul capacity to spare, medium term A320 orders may become A321s as SNN/ORK would likely stay EI, but DUB would be a decent metal neutral JV and Belfast is in my view could go either way. If both airlines stay on DUB/BHD, they can help costs by eliminating night stoppers at the appropriate end.
The entire Aer Lingus US long haul operation is a tiny fraction of BA's so the benefits to UK regional connectivity via DUB should not be overstated. Aer Lingus is not the same as BA, only low end leisure would be indifferent based on price, pointy end types have AVIOS status and lounge access/hard product loyalties.

Ring fencing the politically sensitive routes sounds like a plan, but is it legal?

[Una Due Tfc]

There's the possibility that competition authorities would insist on some BHD/DUB-LHR slots be offered up to competitors, whether anybody else would be interested is another matter. EI don't just fly to LHR from BHD so I can't see that reverting to BA only.

[HH6702]

What would happen the deal with Aer Lingus regional.
Would BA cityflyer get more E170,190 aircraft and take over the routes?

[AerRyan]

I'd imagine the EI regional deal would stay, remember EI and BA probably won't merge, IB and BA didn't.

[j636]

What would happen the deal with Aer Lingus regional.
Would BA cityflyer get more E170,190 aircraft and take over the routes?

Why, BA Cityflyer have no spare fleets and the higher cost base of E jets to ATR's on many UK-DUB routes isn't sustainable. Not a lot will change if it goes through.

[cumbrianboy]

I can see a case for EIR expanding especially is IAG want to grow the long haul ex dublin then more feed is needed and EIR or Stobart as they are really are probably quite well placed to provide that capacity, plus quite easy for Stobart to get some regional jets for the thicker routes and longer sectors if further capacity over the atr is required

[Heathrow Harry]

why would IAG want to build long haul from Dublin? It can only be done by feeding in more peopel from the UK - which will cut into BA's LHR hub

I think the Irish authorities would be mad to agree to this

Ryanair might well take the money and run - after all IAG will try and move fares upwards and that will only benefit Ryanair - either they can charge more or they can go for market share

[AerRyan]

I completely agree with Heathrow Harry, BA will never devlope Dublin's long haul routes. Dublin's dream of becoming a T/A hub will be gone if this goes through.

[dochealth]

What are my chances of still having thrice daily choice of EI SNN to LHR flights in next winter's schedule if IAG takeover goes ahead?
DH

[cumbrianboy]

For the moment they can't develop LHR as they have no slots, and they have no aircraft.

Plus, they loose a ton of long haul from the regions via KLM, AF, LH, SAS etc, look at the regional airports, they don't travel to Heathrow in great volume, they go via the extensive KLM network.

Add into the fact the Dublin has pre clearance for the USA, which I think is highly unlikely to be given to the UK due to the terror threat in this country, and I can see a ton of reasons why they would want to exploit the transatlantic from Dublin, plus it's already being discussed in one of the Irish Broadsheets.

Plus it's not just the UK, expanded EI into Europe and bring people via DUB for a quick transfer and pre clearance, it's a win win for BA if you ask me

[Fairdealfrank]

I can see a case for EIR expanding especially is IAG want to grow the long haul ex dublin then more feed is needed and EIR or Stobart as they are really are probably quite well placed to provide that capacity, plus quite easy for Stobart to get some regional jets for the thicker routes and longer sectors if further capacity over the atr is required


EI and EI Regional already link over 20 UK airports to DUB.




why would IAG want to build long haul from Dublin? It can only be done by feeding in more peopel from the UK - which will cut into BA's LHR hub

I think the Irish authorities would be mad to agree to this


EI Longhaul at DUB is limited: a handful of USA destinations and YYZ. Perhaps there could be one or two more under IAG ownership, probably at AA hubs/focus cities.

Because of pre-clearance, think that the USA would likely be the focus of any IAG longhaul expansion at DUB, to complement the BA operation at LHR.


Ryanair might well take the money and run - after all IAG will try and move fares upwards and that will only benefit Ryanair - either they can charge more or they can go for market share


Indeed, makes sense for FR, it would never be allowed to takeover EI from an EU competition point of view.




What are my chances of still having thrice daily choice of EI SNN to LHR flights in next winter's schedule if IAG takeover goes ahead?
DH


Quite high, provided the flights have reasonable loads both as point to point and as feeders for BA longhaul at LHR.




For the moment they can't develop LHR as they have no slots, and they have no aircraft.


No, BA has adequate slots at LHR since buying and closing BD, another 9 slot pairs come its way in September from VS. What it's short of, apparently, is sufficient longhaul aircraft.


Plus, they loose a ton of long haul from the regions via KLM, AF, LH, SAS etc, look at the regional airports, they don't travel to Heathrow in great volume, they go via the extensive KLM network.


That is the point, IAG has the opportunity to grab some traffic from the several UK airports that are not linked to LHR, and feed them through DUB giving KL (which is also at over 20 UK airports) some competition on North America routes.


Add into the fact the Dublin has pre clearance for the USA, which I think is highly unlikely to be given to the UK due to the terror threat in this country, and I can see a ton of reasons why they would want to exploit the transatlantic from Dublin, plus it's already being discussed in one of the Irish Broadsheets.


Pre-clearance is a big advantage. Don't think a "terror threat" would prevent pre-clearance in the UK, it's actually a reason to have it. With pre-clearance, an identified potential terrorist could denied boarding.

The reason for not having pre-clearance at LHR is probably that it is too complicated as USA flights are spread accross several terminals. MAN could be a suitable candidate for pre-clearance. Other UK airports may or may not have sufficient numbers of flights to make it cost effective.


Plus it's not just the UK, expanded EI into Europe and bring people via DUB for a quick transfer and pre clearance, it's a win win for BA if you ask me

Probably win-win for both BA and EI.

[Jamie2k9]

Getting this over the line will be very difficult.

If slots must be given because of competition then it's likely BA will have to give them up and not take them out of EIs pairs and many other problems will need to be addressed.

[kotakota]

What , not a single comment ? Apathy rules ?

[kotakota]

Are ? This what happens when you mess with the word Air !

[RevMan2]

Isn't "Lingus" a singular noun, in which case "is Lingus" would be correct.

[Momoe]

It's Aer Lingus for chrissakes, it's not hard!

And if you're referring to the takeover, it's preferable to discussing the demise of yet another national airline.

[Momoe]

Revman2,

As you went to pedant mode. Lingus is a bastardization for us Anglo's, the actual gaelic word for fleet is loingeas.

Pedant mode off

[susier]

I think they ought to go the whole way and spell it Lenzies.

[Skipness One Echo]

If slots must be given because of competition then it's likely BA will have to give them up and not take them out of EIs pairs
Aren't Aer lingus the dominant carrier on the route? Not sure why you think it's the British carrier who will be forced to surrender slots. Given the huge competition with the carriers below :
LCY-DUB CFE / WX / BE
LGW/STN/LTN-DUB FR
in the market, none of 'em are likely to want to have a wee go out of LHR. There's not much of a case for making anyone give up slot pairs. In terms of making sure ORK/SNN have access to LHR, genuine question, is it really so difficult to get to DUB and fly from there direct with a US carrier or the ME3?

Very contentious I know, not trying to provoke an argument, keen to know.

[Omnipresent]

BA (nor EI) won't be forced to give up LHR slots by default.

What will probably happen (based on precedent set by IAG's purchase of bmi) is BA/EI will have to surrender a set number of slots (say six pairs) to any willing entrant on LHR-DUB (ditto for Belfast).

Based on the experience of Little Red, it's unlikely that an entrant will be forthcoming.

I don't buy the idea that IAG will slash connectivity between Ireland and the UK.

One of the first things IAG will do is, as soon as regulatory approval allows, put the EI code on every BA long-haul route. And vice versa. Ditto for Iberia at MAD.

Also don't forget that EI will gain a very strong transatlantic partner in the form of AA so I expect AA will increase its flights to DUB above existing services. AA also has a huge hub at MIA and DFW (and to a lesser extent LAX) so there's plenty of scope for EI to add destinations in the US.

[BEagle]

I really hope that the Irish government will veto any sell off.

Aer Lingus is beginning to recover; such recovery should be encouraged.

ba is only after more landing slots at London Airport and has zero interest in flights to Ireland.

[Jamie2k9]

Aren't Aer lingus the dominant carrier on the route? Not sure why you think it's the British carrier who will be forced to surrender slots. Given the huge competition with the carriers below :
LCY-DUB CFE / WX / BE
LGW/STN/LTN-DUB FR
in the market, none of 'em are likely to want to have a wee go out of LHR. There's not much of a case for making anyone give up slot pairs. In terms of making sure ORK/SNN have access to LHR, genuine question, is it really so difficult to get to DUB and fly from there direct with a US carrier or the ME3?

Very contentious I know, not trying to provoke an argument, keen to know.

Your right about the route however for BA to get the Government to agree they may offer to give up slots to the commission (if required) or give EI the same number of slots back to the company if they were taken out of EI paris. The possibility of EI losing slots will not go in their favor and they will have to make up for it somewhere.

As for LHR generally, very overrated saw recent stat that around 2/3 of traffic from ROI is point to point. As for traveling to fly ex DUB, it is very expensive to fly T/A from DUB compared to London however an argument could be made if capacity was boosted it would help on that front.

FR have said they would likely take on LHR if they were forced to give up slots.

[beamender99]

BBC News - Aer Lingus 'to accept' bid from British Airways owner IAG (http://www.bbc.co.uk/news/business-30967346)

Aer Lingus 'to accept' bid from British Airways owner IAG

[Fairdealfrank]

Getting this over the line will be very difficult.

If slots must be given because of competition then it's likely BA will have to give them up and not take them out of EIs pairs and many other problems will need to be addressed.
Maybe go through the motions, probably slots from BA and EI. No one is likely to take it up after VS's experience, so it would be academic.



BA (nor EI) won't be forced to give up LHR slots by default.

What will probably happen (based on precedent set by IAG's purchase of bmi) is BA/EI will have to surrender a set number of slots (say six pairs) to any willing entrant on LHR-DUB (ditto for Belfast).

Based on the experience of Little Red, it's unlikely that an entrant will be forthcoming.

I don't buy the idea that IAG will slash connectivity between Ireland and the UK.
Makes sense.



One of the first things IAG will do is, as soon as regulatory approval allows, put the EI code on every BA long-haul route. And vice versa. Ditto for Iberia at MAD.
Yes this is what BA and IB did with eachother. Would imagine EI would also join the Avios scheme and the Oneworld alliance soon as.




FR have said they would likely take on LHR if they were forced to give up slots.
FR has also said that it will never operate flights to/from Heathrow, Paris De Gaulle and Frankfurt.

That is believable: too many delays at Heathrow, both landing and takeoff; taxi times are too long; 25 minute turnarounds are not possible; no dedicated "no frills" terminal; contact gates have to be used (mostly).

Doesn't fit the FR model: FR doesn't make money with its aircraft stuck on the ground, so don't believe it for a minute.

[Jamie2k9]

FR has also said that it will never operate flights to/from Heathrow, Paris De Gaulle and Frankfurt.

That is believable: too many delays at Heathrow, both landing and takeoff; taxi times are too long; 25 minute turnarounds are not possible; no dedicated "no frills" terminal; contact gates have to be used (mostly).

Doesn't fit the FR model: FR doesn't make money with its aircraft stuck on the ground, so don't believe it for a minute.

FR spoke about it this week and would consider it. They have previously said a lot of things they would never do and are doing them!

As for turnaround etc, 25 minutes has turned in 35 minutes for many routes and if EI have a reasonable good OTP then FR could have the same and they only allow 40. On their DUB-BRU route they have a 70 minute turnaround in the mornings for slot reasons. Don't see them dropped that any time soon...

[BARKINGMAD]

I presume by now that the great employees of Ireland's State airline may have braced themselves for the impending visits to the Jobcentre?

Once this deal is through, the surplus employees will be jettisoned, the best of the 'frames may be retained if they can be used in IAG mode and it will be shades of Dan-Air all over again.

It was a most unpleasant experience and I sympathise with anyone who will be negatively affected by BIGCORP on the prowl, eating and destroying anything it regards as a tasty morsel.

Anyone not recognising this behaviour please read "The Corporation", it may be out of print but copies can be obtained. Small compensation to understand what has/will happen. :sad:

[MCDU2]

I have yet to see a takeover or merger that doesn't result in job losses......

[Omnipresent]

There will inevitably job losses. These will be in back office functions such as IT and procurement as IAG is moving to a "shared services" platform. I think a lot of BA's IT department moved to IAG some time ago.


However, on the flipside, if IAG expands EI and DUB there will be new jobs created for front line staff.

[AerRyan]

However, on the flipside, if IAG expands EI and DUB there will be new jobs created for front line staff.

I can say with confidence, this will not happen. In my opinion, it would not be in the best interests of IAG to expand EI.

[PAXboy]

In a mature economy, such as Europe, the only way to increase 'shareholder value' :yuk: is to acquire another company. After you have squeezed the juice out of it, then you move on.

Boys always like to have the biggest toys in the yard and the biggest bonus'. Nowadays, that means acquistion because there is no more space for natural growth. You can only expand if you force another to contract.

EI makes sense for IAG and they will already have others on their target list. Whether they are able to grow further, remains to be seen.

[RevMan2]

@ Moemoe
You evidently overlooked the irony emoticon...

[Bagso]

Must confess when IAG got hold of EI, I thought they would actually slash direct EI US flights and route everybody via London ?

Why duplicate out of DUB if you don't have to ?

Surely that's the effect of hubbing thru LHR and using economies of scale for partner airlines.

My understanding is that fares Ex DUB are extortionate whilst the sub fares from UK are Ironically cheap. Paradox is having a lot of traffic routing back thru LHR already.

It does seem odd that the Irish Government seem more interested in protecting the Irish routes to DUB than the transatlantic network. Maybe they know something.

[ATNotts]

Bagso

It does seem odd that the Irish Government seem more interested in protecting the Irish routes to DUB than the transatlantic network.

Doesn't really surprise me. Aside the undeniable benefits of inbound US tourists (who believe they are Irish and want to meet the ancestors) Ireland is a full member of the EU, and as such need to retain direct connections with it's chief trading partners who are, historically, the UK and then the rest of the EU.

The (political and business) fear must surely be that an IAG takeover will result in less competition on the point to point DUB/LON market, and diminishing direct flights (by EI) between Dublin and main European business centres, should IAG look to hub Irish passengers through LHR.

Of course, should this happen, the likes of KL / AF / LH and of course Ryanair will step in to fill the breach Ireland's image (through EI) wouldn't be being projected through the "national" carrier.

There are a lot of politics going to be involved here, no doubt.

[Skipness One Echo]

should IAG look to hub Irish passengers through LHR.
Don't honestly think there's a business case for this on short haul in this day and age. The days of people actually connecting on short haul when a direct and cheaper option exists are dying. They might want to maximise long and mid haul connections but it makes no sense to pull back from existing markets where routes run profitably on a p2p basis.

[HH6702]

It would make no sence to direct passengers through Heathrow as Heathrow is full...

I would expect that due to Heathrow being full they will look at expanding Dublin and maybe route a few more via Dublin so that they can open new routes from Heathrow...????


If they pulled the routes from Dublin I'm sure another airline will just come and take over the routes to serve the pax already using Dublin as a hub

[EI-BUD]

Understandably there is huge speculation about what IAG would do with EI's operation, e.g. curtail the scale of US routes and channel through London.

IAG clearly are interested in EI, and the future viability of EI operations are through an increased transatlantic operation at Dublin which will ensure that the short haul operation is sustainable, which Ryanair is all over and will be more so in future.

Moving away from the core strenght and profit generator that is North America would spell doom for EI, and leave it completely exposed to Ryanairs point to point business.

There is a much bigger world outside of EI and if IAG want to secure EI to drive their London TA business etc. there are lots of other carriers who will fill the voids ex Dublin.

EI-BUD

[Just a spotter]

BA route their TA traffic through Heathrow, that's their model. If the airline wanted to open a new TA base then Gatwick, Manchester and Birmingham all have greater catchment areas than Dublin (and that's even if you included most of the island of Ireland as DUB's catchment).

Yes, Heathrow runway capacity is pretty full at present, so how does an airline grab more of that capacity? ... by exactly doing what BA did to BMI, buy a competitor with some and then remove then, you get the triple whammy of removing a competitor, grabbing their asset and potentially taking much of their custom in the process.

TBH, I can't see any upside for EI in being rolled into the IAG fold. EI isn't the worlds biggest or most profitable airline, but they're doing OK and the prospects look good. Ryanair are probably happy to sell, the Irish Government under some pressure to do so, but with the official data saying the economy is doing OK, the State isn't in any rush. Etihad,the 3rd largest holder with about 4% might not be in a huge rush to enter the race given the drop in oil revenues, but a second bidder may well bide their time to see at what price the board recommends acceptace.

Eitherway, IMHO, FR won't be too upset to offload their holding at a good price, especially if a new owner is happy see underinvestment in EI's profitable routes.

JAS

[Omnipresent]

Why would IAG spend well over a billion Euros buying an airline to only shrink it?

It would be utterly irrational. Aer Lingus' current transatlantic network is far too small to be considered such a threat to BA that IAG feels the need to neuter it.

IAG will grow Aer Lingus, provided it can do so profitably. All IAG airlines are currently in a phase of growth. Indeed, Iberia has today announced the return of flights to Havana and new routes to Cali and Medellin. It wasn't that long ago people were claiming IAG was engaged in a vast conspiracy to shrink Iberia in order to prop up BA.

[Heathrow Harry]

all those slots at LHR

Connectivity to DUB will fall as it has to all the UK domestic airports as BA use the slots for more profitable long haul

Aer Lingus basically reduced to a European only carrier

[TOM100]

I understand the slots only to be worth about a 35% of the total txn value. Couldn't they obtain those cheaper from another airline ? Chances are they will have to give some of those up to ?

Given that EI has a profitable business model (unlike BD which was bust when BA bought them) why not try and develop/expand esp from UK regions (via EIR) without having to touch LHR.

I think BA now has the opportunity to free up slots at LHR without needing EI if this were their strategy. They could pass the slots they use to BCN/MAD/PMI (none slot constrained). Reduce BA frequency to DUBBHD and pass to EI using larger aircraft. LBA ex LHR is undoubtedly a slot sitter (3 per day).

So I think as an enlarged IAG group with the three airlines they have flexibility to use different aircraft type or reduce route capacity (and drive up yield) but keep brand presence on all.

I can't believe with all capacity ex LON to DUB/BHD that yield can be that brilliant ?

And WW is a proud Irishman !

Just my two penneth.

[ayroplain]

Much of the takeover discussion is about the EI DUB-LHR route and its associated slots. It appears that this route is considered to be of “vital” connectivity importance to Ireland and must be retained. So, let’s deal with that.

At this moment there is competition on this route between two airlines EI and BA. If the takeover goes through there will be a new set of circumstances to be dealt with. Whatever scenario evolves of the three indicated below the one thing that is sure is that, since they are now part of the same group, they would be no longer in competition with one another.

1.Will both EI and BA both continue to operate the route with the same frequency as they now do continuing to use their own aircraft?

2.Will each airline reduce its quota of flights and continue to use their own aircraft?

3.Will one of them drop out and leave the other to operate the route with their own aircraft?

In the case of (1) and (2) it would seem likely that they would consolidate the fares into one structure as, otherwise, IAG would be in competition with itself. In effect, we are back to something akin to the cartel days of yore.

One way or the other we now have a situation whereby IAG will have a monopoly on this “vital” route and can charge what they like. To be consistent the authorities cannot allow that situation to continue and must insist on having a certain number of slots freed for someone else to use to offer competition. But, and it’s a big but, who is likely to want to take them?

FR has said before that they won’t do LHR but is it possible that IAG has done a deal behind the scenes? Perhaps something similar to that which FR themselves concocted for their third bid for EI. If not and no others are interested we are left with a Catch-22.

[bnt]

why would IAG want to build long haul from Dublin? It can only be done by feeding in more peopel from the UK - which will cut into BA's LHR hub

I think the Irish authorities would be mad to agree to this
Dublin Airport has US Customs & Immigration pre-clearance, the only airport in Europe with that facility. Very attractive selling point - makes entering the US nearly painless, since there is no queuing after landing. I tested this last month: walked off a plane in Philadelphia, straight on to the domestic concourse, and could have made my connection in 10 minutes if necessary.

For example: if you're flying to the USA from anywhere in the UK outside London, DUB would be a much more attractive option than LHR.

[Sober Lark]

Ryanair + Aer Lingus would have better prospects for traffic at DUB than IAG + Aer Lingus and why wouldn't FR want to tap into transatlantic business. They probably provide the vast majority of PAX transiting through DUB on their way to the US as it is.


WW has already stated he doubts LHR will ever have a third runway so expansion there is capped and slots cherished. Slots are why he needs EI.

[EI-A330-300]

They probably provide the vast majority of PAX transiting through DUB on their way to the US as it is.

How do you conclude this?

[Sober Lark]

CSO database of passenger movements, direction, foreign airport and month. Also see aviation statistics.


Gives you better info on how well EK and EY are doing out of DUB that the DAA do.

[EI-A330-300]

With FR excess baggage charges it really make their product to transit passengers un appealing as it usually matches EI in the end and their schedules don't facilitate a huge amount of transit.

Making a connecting after arriving in DUB at 05.15 is tight as FR main flights depart between 06.00-06.40 when you consider immigration, terminal transfer, check in (40 min before flight), T1 security and 10-15 walk to gate. Apart from some UK passengers I expect it is very small.

Now your not going to come back and say T/A don't bring checked baggage are u?

[Omnipresent]

all those slots at LHR

Connectivity to DUB will fall as it has to all the UK domestic airports as BA use the slots for more profitable long haul

Aer Lingus basically reduced to a European only carrier For sure some slots will be released as EI/BA combine schedules on LHR-DUB but it's a nonsense to say that IAG is engaged in a pure slot grabbing exercise.

BA did not take Iberia's LHR slots when IAG was formed. It would entirely counter-productive to IAG's strategy to restrict links between IAG hubs. Iberia also kept its own North American routes post IAG.

Also, EI's LHR slot portfolio isn't that interesting as far as long-haul is concerned. It has no arrival slots before 8am and arrival slots late in the day are of no use for long-haul.

And since IAG acquired bmi, BA's connections to the UK regions have improved. It maintained Belfast and opened up Leeds Bradford. The latter was a clear move to take traffic from KLM and is likely to also be behind IAG's thinking with EI and DUB.

For all the talk of long-haul expansion, BA says it needs to maintain a ratio of 1/3 long-haul and 2/3 short-haul at LHR for network optimisation.

I also don't believe for a moment IAG will close down EI's long-haul network.

Access to the Avios FFP base in Europe and American Airlines AAdvantage FFP base in the US will give EI a huge boost. As will access to AA and BA's corporate accounts in the transatlantic joint-venture. That is huge scope to improve revenue and margin.

[peacock1]

The board are recommending the takeover....

[racedo]

The board are recommending the takeover....

Board discussion............
Another takeover attempt , haven't we said NO NO NO already to that Ryanair fecker, ...............
er Chairman its not from Ryanair
Not from Ryanair...... are you sure
Yes Chairman...
In which case it must be a Yes

[Dontgothere]

I'm going to have to make a comedy sketch out of that one.

[TOM100]

Funny Racedo. I honestly think this is good news for EI. Just like IB and VY they have optimized costs and sent them on a strategy for growth.

[Omnipresent]

The Aer Lingus board has formally recommended the bid and IAG has confirmed Aer Lingus will join the Oneworld alliance and AA/BA/AY/IB joint venture if Aer Lingus becomes part of IAG.

It is highly unlikely IAG would do that if just wanted to reduce Aer Lingus to short-haul only.

[Epsomdog]

More interesting details!


Aer Lingus 'willing to recommend IAG offer' - RTÉ News (http://www.rte.ie/news/business/2015/0127/675839-aer-lingus-iag/)

[Una Due Tfc]

Being in Oneworld wasn't exactly a huge boon last time they were in it.

How will this effect the new joint ventures with UA on IAD, and in particular ORD given AA compete with both EI and UA on the route now?

[Epsomdog]

Given that EI are currently operating the Little Red routes and that they have shown an interest in continuing the EDI/ABZ/LHR service. They also have two a/c on lease for a further two years.

It is conceivable that EI may continue to operate these services as a feeder for BA or as a t/a feed for Dublin, ie LHR-EDI-DUB & DUB-EDI-LHR.

The set up work is already done, so it may be worth a try!

[bnt]

Irish Opposition party Fianna Fáil are against the sale (http://www.irishtimes.com/business/transport-and-tourism/fianna-f%C3%A1il-warns-that-a-sale-of-aer-lingus-would-be-ill-advised-1.2081071), worried about the landing rights. Well, they are the Opposition, so I suppose they wouldn't be doing their job if they didn't Oppose. :hmm:

[Omnipresent]

Being in Oneworld wasn't exactly a huge boon last time they were in it.

You can't compare Oneworld then to today.

Back in 2007 there was no anti-trust immunity with AA and very limited co-operation in terms if codesharing.

Being in the AA/BA joint venture will allow for full codesharing across AA's domestic network (much expanded post the merger with US Airways, full FFP reciprocal recognition, joint scheduling and access to AA and BA corporate accounts.

[Sober Lark]

Epsomdog, I'm sure most of the 2 million + passengers on the DUB / LHR route would love to take the scenic route via EDI.

[Una Due Tfc]

I guess it would eventually lead to the end of the codesharing with JBU, who have a far better product in my personal experience than US, UA, DL and especially AA

[Epsomdog]

Sober?
I'm sure most of the 2 million + passengers on the DUB / LHR route would love to take the scenic route via EDI.


I was thinking two aircraft and crews operating 3 sectors in opposite directions. Instead of the current 3 separate routes. I make that a 33% saving!

[BFS watcher]

I wonder how quickly the £20 million court case by BFS against Aer Lingus will be settled to ensure a smooth takeover?

[EGAC is Better]

Does anyone know if EI have actually applied to keep the slots currently assigned the VS Little Red?

Epsomdog might actually be on to something if looked at from another direction. EI take those slots and ultimately IAG get the go ahead with the buyout, BA could operate those services on behalf of EI freeing up their own slots for LHR expansion without affecting DUB-LHR frequencies. Kills two birds with one stone, frequency stays as is on BA's EDI/ABZ/MAN and the slots lost to VS effectively make their way back to BA.

Add to that some daily A330's when they are available on DUB/LHR which would free up another couple of slots. IAG/BA have a lot to gain without even needing to change EI in any way.

[Omnipresent]

AFAIK the Little Red slots will automatically revert back to BA if no other airline applies to keep them.

[Jack1985]

The above is correct.

[Epsomdog]

EI applied for the EDI slots shortly after LR closure announced. ABZ was a possibility as well. This all happened befor the IAG bid and the oil price slump!

[EI-BUD]

IAG may see a value in Aer Lingus operating some of the frequencies on some routes ( assuming the take over proceeds), Aer Lingus has a lower cost base than BA and if tickets also sold on BA website could prove fruitful.

We shall have to wait and see !

[brian_dromey]

Would BA Union agreements even allow EI to operate UK domestic or EU routes long-term out of LHR/LGW?

[Epsomdog]

Would BA Union agreements even allow EI to operate UK domestic or EU routes long-term out of LHR/LGW?

Yes.

Maggie sorted that out years ago!

[PC767]

No.

Via BALPA BA pilots have strong agreements in place, in this instance relating to exactly which BA routes BA pilots are entitled to fly.

[Epsomdog]

Aer Lingus already have UK based crews operating out of LHR,LGW & BHD to UK, Irish and European destinations. Also, remember we're not talking about EI merging with BA. IAG will become the owner of EI, which they say will be left as a separate operating entity.

[Epsomdog]

EGAC
Epsomdog might actually be on to something if looked at from another direction. EI take those slots and ultimately IAG get the go ahead with the buyout, BA could operate those services on behalf of EI freeing up their own slots for LHR expansion without affecting DUB-LHR frequencies. Kills two birds with one stone, frequency stays as is on BA's EDI/ABZ/MAN and the slots lost to VS effectively make their way back to BA.

The advantage EI have, is they are already up and running. BA, I assume would need to find extra aircraft (over and above their existing ones on the routes) and crews to operate the additional services. Of course they could hire EI to do it for them:)

[brian_dromey]

So let me get this straight, because I am not sure I follow.

(If) EI are to be awarded 'remedy slots' which were designed to enhance competition on Scottish routes to LHR (because its would-be parent bought the competition on those routes), BA could then operate them on behalf of EI, but because EI have aircraft 'ready to go' they would operate selected services between LHR and EDI/ABZ on behalf of BA, on behalf of themselves?

[Heathrow Harry]

one thing is for sure fares DUB-LHR will go through the roof..............

[Una Due Tfc]

Well I'd imagine they would want to keep prices relatively competitive for connections, otherwise Irish pax will just go through FRA/CDG etc, or TY/EK/The unmentionable if heading that direction, and as for point to point, BE are pretty cheap out of LCY, then there's FR out of LGW,LTN and STN, Stobart in SEN. It's different now from the old airline cartel days, in that BA and EI are now only 2 of 6 airlines serving the 2 cities

[MAN FLEX 99]

one thing is for sure fares DUB-LHR will go through the roof..............

I really doubt that will happen considering that there is still the option to fly to LGW, LTN, STN and LCY out of DUB. If it is over priced to LHR people will choose an alternative. LHR transit traffic will be part of a longhaul fare.

[stab3.5up]

And siptu will be at the airport roundabout having another non existent strike!! Tbh I think in all likelihood no mater how long it drags out its a done deal lets be honest. The devil will be in the detail. Will Stobart air EI flights become flybe or cityflyer express etc etc etc. Will they outsource hsndling in DUB, etc etc etc

[brian_dromey]

I don't think there will be any significant change to StobartAir flights, EI Regional has worked very well against FR into the UK regional airports and helped in building a strong hub for EI at Dublin. I don't see why the formula, much less the brand would change. IB retain their IBRegional operation.

I doubt handling at DUB will be outsourced, what could happen is that IB, BA and possibly AA flights are handled by EI, not sure about Vueling.

[EI-A330-300]

I see a lot of this will be good for T/A out of DUB and how a JV would work well.

Finnair and AA are not part of IAG and yet they have a JV agreement with BA so if Walsh was really interested in this then they could add EI to the mix without bringing them under IAG.

Besides some savings from EI HQ I don't see IAG brining a lot to EI but taking a far greater amount.

I think it's highly likely the Government will also reject it, all but FG have said they are opposed to the sale.

[Noxegon]

Given that BA have today slashed their Executive Club mileage programme I'm no longer quite as enthusiastic about this as I once was.

[whitelighter]

slashed it how?

[Just a spotter]

Aer Lingus has a lower cost base than BA and if tickets also sold on BA website could prove fruitful. An interesting idea. If EI can move an A319/A320/A321 from 'A' to 'B' at a lower total cost than BA, is it possible that we could then see IAG shaping their operations so that BA & IB move away from domestic & European routes to focus on long haul from their respective hubs with EI & VY (along with their respective sub operations and those of BA & IB) acting as the feeders into them?

JAS

[Sober Lark]

Nothing comes of nothing so lets not waste any more time on it.

[j636]

Being confirmed a vote will be required at Parliament while not the issue as they can pass the vote but is fall out before, during and after is something the Government can afford....with an election just over a year away!

[bnt]

My thinking is that if the sale goes through, IAG ought to sell Dublin and Shannon more as gateways to the USA, due to the preclearance facilities. Does DUB have the capacity? According to the W14 Start of Season Report here (http://www.acl-uk.org/acl-international/default.aspx?id=155), pg 10, there's plenty of spare runway capacity 08:00-16:00, once all those early bird flights have left.

What about Terminal capacity? Mid-morning is when many US-bound flights leave already, and you can see that on pg 17 of that report: fewer flights but more Pax per US flight means that T2 in particular is quite busy mid-morning already - but still not as busy as early morning.

[canberra97]

Noxegon

You still have not replied back to what you mentioned regarding BA slashing Executive Club?

As a member myself could you clarify as I have not been informed of any changes!

[Noxegon]

Here's a summary:

British Airways Devaluation Coming April 28 (http://thepointsguy.com/2015/01/british-airways-devaluation-coming-april-28/)

[canberra97]

NOXEGON

Thanks for posting that link as I was not aware of any changes.

[EI-BUD]

Canberra,
Re you post asking about the changes to Executive Club and Avios programme; I got email today. The communication is detailed and complicated in my view, meaning there is no 1 message except this; they say they are making extra seats or rather a dedicated number of seats per flights. For this guaranteed number there will be an impact to the club. Eg: different charges at seasonal times of the year and less costly at off peak times. There is some message about domestic flights but it is not at all clear if the £35 fare in Europe will be still available . This I find useful.

Slightly off topic; for me Avios is great if I need to go last minute say Belfast or Dublin - London. Typically I can get £35 return and 9000 avios. This beats last minute £300 fares etc. equally doing a one way Belfast - Dublin ( with a stop over in London) for 17.50 and 4500 avios, gets me a return flight to London for virtually nothing! However, booking long haul not good value , even using companion tickets earned on Amex.

[benjyyy]

EI BUD

The second scenario you describe of booking a one way with a stopover in London will be no more post 28 April as per the changes outlined today. No free UK connections so the price of say a return BHD-PRG will go from 9k avios + £35 to 18k avios and £70!

Surely this will impact on the loads from BHD. Maybe not in the short term - in fact they will probably increase in the short term as the current rates are bookable until 28 April to almost a year ahead - but as someone who used it quite a bit for flights to Europe it will be far too expensive to justify over LCCs. Maybe that's why Ryanair are sniffing about again!

[EGAC is Better]

The advantage EI have, is they are already up and running. BA, I assume would need to find extra aircraft (over and above their existing ones on the routes) and crews to operate the additional services. Of course they could hire EI to do it for them

Fair point epsomdog, I didn't really explain my rationale too well. EI will have a few aircraft making their way back to the main fleet once Little Red ceases. Supposing there was an agreement that EI utilise some of said frames on DUB/LHR and all traffic routed on EI aircraft with shared costs between BA/EI. BA can then slightly increase capacity to match actual demad with their own aircraft on routes where they are firmly established which are being vacated by Little Red.

[Epsomdog]

EGAC
They have two A/C leased from GCAS for 4yrs, purely for the LR contract. These will be surplass to requirements come September. I don't think EI have a use for them on the mainline, so it makes sense to utilise them somewhere!

[Skipness One Echo]

It makes more sense to return them to the leaser tbh. Aer Lingus have even less market visiblity in this market than Virgin. They did eventually learn this lesson with the Gatwick base debacle. BA/EI are a long way away from being close enough to do what you suggest, there's surely a lot of groundwork and agreements to be worked through even if the Irish government wave this through. By the time all that's done, those surplus aircraft will be long gone.

[Epsomdog]

Skip
It makes more sense to return them to the leaser tbh. Aer Lingus have even less market visiblity in this market than Virgin. They did eventually learn this lesson with the Gatwick base debacle. BA/EI are a long way away from being close enough to do what you suggest, there's surely a lot of groundwork and agreements to be worked through even if the Irish government wave this through. By the time all that's done, those surplus aircraft will be long gone.

You could well be right there.

I do believe EI could make a much better job of the LHR/EDI route than VIrgin. VS never had the right mindset for shorthaul high density ops. These type of routes have been EIs bread and butter for years.

As for the LGW issue, EI could have made that work, had they the commitment to take on Easy Jet at their own game. This is the third time EI have pulled out of Gatwick. Will they ever make it four?

[EI-A330-300]

Stephen Kavanagh (Chief strategy and planning officer) and Easyjet's Chief operations officer Warwick Brady seem to in line for the next CEO well before IAG came along according to the Independent.

Easyjet's operations officer may be a good fit if IAG is rejected....

Aer Lingus sale: Oireachtas commitee hearing to discuss impact as concern grows in coalition - Independent.ie (http://www.independent.ie/business/irish/aer-lingus-sale-oireachtas-commitee-hearing-to-discuss-impact-as-concern-grows-in-coalition-30947077.html)

Meanwhile Irish Airline Pilots Association which represents Pilots who make up 7% of EI are likely to call for rejection of IAG bid.

Aer Lingus pilots not happy with proposed IAG deal - RTÉ News (http://www.rte.ie/news/2015/0129/676327-aer-lingus/)

[missterrible]

The Irish Airline Pilots' Association, which represents holders of 7% of Aer Lingus shares

Eh what?

Why would they say that? I wonder how The Takeover Panel would view this claim.

[DollarBill]

Stephen Kavanagh (Chief strategy and planning officer) and Easyjet's Chief operations officer Warwick Brady seem to in line for the next CEO well before IAG came along according to the Independent.

Easyjet's operations officer may be a good fit if IAG is rejected....


Kavanagh could be a death knell for EI. He has no vision and operates as the worse kind of bean counter.

-3 years ago he refused to upgrade Y product on T/A routes.
-He is behind the "Choice seats" misleading option on the A330.
-The new J Class service revamp is not getting any extra budget due to him.
-He refuses to allow J Class pax to have complimentary inflight products (ie, tea/coffee) on Shorthaul EI flights.
-He has continually refused to allow a revamp of the GC system to allow points accrual for all flights booked.
-He is being credited with the successful T/A operation out of DUB. I know for a fact that the current DUB as a hub business model was presented to Mueller in Oct 2009 by a frontline staffer. AS the staff member made the presentation Kavanagh was smirking away until Mueller responded positively to the staff member.
-In one meeting he refused to accept Australian and Thai Govt figures for Irish tourists/workers into their countries as reflective of the demand for traffic to these destinations. "my figures are correct"

[EI-BUD]

So the evening LHR BHD routed LHR DUB BHD, changing aircraft in Dublin; EPU swapping over to DER, hence 319 to 320. That's 2 320's in Belfast City now.
Anybody know if that's a temporary or permanent move?

[EI-A330-300]

Just for today I understand.

[fayz76]

Anyone knows if the Sigma contractors get a permanent contract with EI? I'm currently in the desert trying to get back to UK with the family. I understand money is not going to be the same in UK but need to know if anyone from Sigma managed to get a permanent contract with AL after their 2 year contract.

Thank you.

[EI-A330-300]

IAG look set to provide more details next week about EI plans as oppositation to the sale grows day by day. Previously no further details were being provided.

A number of papers are speculatng as to why Qatar purchased 9.9% and how they may be after LHR slots which the Government said they noted the Qatar stake.

[Sober Lark]

Who wouldn't have expected the trophy hunters of Qatar, Emirates and Etihad to have made an appearance.

[j636]

will be interesting to see how EY uae their 4.9% now.

[bnt]

There's a good article in the Irish Independent (http://www.independent.ie/business/where-next-for-aer-lingus-30953486.html) about the effect of the political wrangling about slots on the deal's prospects. Some good comments from airline execs including the Hairy Camel.

[Sober Lark]

Seemingly Kenny wants a 'permanent cast iron guarantee' on Aer Lingus connectivity at DUB. Who is he trying to fool or what on earth is he talking about?

[Epsomdog]

Kennys also taking a gamble on Heathrow being the main UK hub in 20 yrs!

[EI-BUD]

Yes Enda on the radio today on RTE, saying a lot about nothing . . He also admitted that the government has limited influence on the matter. Equally he said they would seek assurances on connectivity but if Willie Walsh moved on or leadership changed at the airline , any such assurances may be short lived.

Padraig O'Ceidigh, previously owner if AerArann says that his view is that the company is grossly under valued...

[DollarBill]

Conor McCarthy (Head of Dublin Aerospace) in todays Sunday Indo thinks similarly....he is saying if he was the 25.11% shareholder he would be pushing for EUR 2,75

[Fairdealfrank]

A number of papers are speculatng as to why Qatar purchased 9.9% and how they may be after LHR slots which the Government said they noted the Qatar stake.


Do they explain how the Qatari government buying 9.99% of IAG shares on the open market would gain QR any more slots at LHR? Surely it's a case of buying into a profitable company for investment returns.

If QR wants more LHR slots, wouldn't the Qatari government buy the slots for QR from another carrier (assuming one was willing to sell of course)?


Seemingly Kenny wants a 'permanent cast iron guarantee' on Aer Lingus connectivity at DUB. Who is he trying to fool or what on earth is he talking about?


Usual politicians' double-talk? He doesn't need to worry: these routes are busy and profitable. If they were not, they would have been pulled, they are not PSO routes.


Kennys also taking a gamble on Heathrow being the main UK hub in 20 yrs!


It will be, even with 2 rwys.

[Jamie2k9]

Kavanagh could be a death knell for EI. He has no vision and operates as the worse kind of bean counter.

-3 years ago he refused to upgrade Y product on T/A routes.
-He is behind the "Choice seats" misleading option on the A330.
-The new J Class service revamp is not getting any extra budget due to him.
-He refuses to allow J Class pax to have complimentary inflight products (ie, tea/coffee) on Shorthaul EI flights.
-He has continually refused to allow a revamp of the GC system to allow points accrual for all flights booked.
-He is being credited with the successful T/A operation out of DUB. I know for a fact that the current DUB as a hub business model was presented to Mueller in Oct 2009 by a frontline staffer. AS the staff member made the presentation Kavanagh was smirking away until Mueller responded positively to the staff member.
-In one meeting he refused to accept Australian and Thai Govt figures for Irish tourists/workers into their countries as reflective of the demand for traffic to these destinations. "my figures are correct"

He wouldn't be my choice either!

Conor McCarthy (Head of Dublin Aerospace) in todays Sunday Indo thinks similarly....he is saying if he was the 25.11% shareholder he would be pushing for EUR 2,75

I think they could of got it to. Besides the price IAG will have a lot of work to do to secure EI and currently I don't expect it to happen. Question is do they need EI that much they will give the Government everything they want and provided it's legally workable to get approval.

[Una Due Tfc]

Conor McCarthy would be an excellent choice for CEO if they could convince him. Superb track record and a genuine passion for Irish aviation.

[EI-A330-300]

IAG have responded:
Legally binding agreement will state slots, cannont be sold, tranferes and all current LHR routes kept for 5 years. Not sure if it all covers 5 years or for example they could drop any LHR route but the slots will still be used by EI to increase elsewhere. Dublin HQ also kept.

Aer Lingus shares closed up 3.5 while IAG dropped 2.7

[keep_er_lit]

I wonder would the guarantee of slots include Belfast or is it ROI only?

[CCR]

You can be sure that the Heathrow flights from BHD will be cut if the takeover goes ahead..not to mention monopoly ticket prices!

[racedo]

IAG have responded:
Legally binding agreement will state slots, cannont be sold, tranferes and all current LHR routes kept for 5 years. Not sure if it all covers 5 years or for example they could drop any LHR route but the slots will still be used by EI to increase elsewhere. Dublin HQ also kept.


Worth as much as a chocolate teapot.

What sanctions when someone changes it....

[EI-BUD]

CCR ; I'd disagree about Belfast flights being cut. The base is now come of age and on the whole does well, AerLingus have a lower cost base than BA do. Axing BHDLHR would seriously put a question over the whole base especially in Winter, as it would be down to 1 ac.

BA and Vueling operate together on LGW BCN, no reason why BA would be opposed to sharing another sister airline market.

As far as I can see, the guarantee would not cover BHD, no reason why it would. All irish Government statements /comments refer to DUB, ORK ,SNN and even NOC ( which doesn't have a LHR link!).

[EI-A330-300]

CCR ; I'd disagree about Belfast flights being cut. The base is now come of age and on the whole does well, AerLingus have a lower cost base than BA do. Axing BHDLHR would seriously put a question over the whole base especially in Winter, as it would be down to 1 ac.

BA and Vueling operate together on LGW BCN, no reason why BA would be opposed to sharing another sister airline market.

As far as I can see, the guarantee would not cover BHD, no reason why it would. All irish Government statements /comments refer to DUB, ORK ,SNN and even NOC ( which doesn't have a LHR link!).

I agree and while the Government statements only refer to ROI, IAG still cant do anything with the BHD slots without permission from the Government.

[EI-BUD]

Thanks A330 for that.

I see the BHD scenario from a slightly different perspective. EI have stuck by their Belfast operation since they came in with a base at BFS in late 2007. It's been hard yards and on launch they had a very ambitious programme, lost heavily and tried many new routes that hadn't been flown hitherto on a scheduled basis e.g. Budapest and double daily on AMS, was traditionally single daily ..

They introduced the 319, EPR and EPS from Iberia to make the base stack, which underpins their commitment . They now are faced with a court case due to the move to BHD, which in my view will end in their favour.

With a lower cost base and a wider network ex BHD, room to grow once the court case is dealt with , I can see scope for another unit . With some 320's coming on stream this is a real possibility. I can see IAG reducing overall frequency on BHD LHR but increasing ac size, who knows we may yet see green 321 at BHD yet. I believe that EI's finest days are yet to come for Belfast City ...

[PC767]

For what it's worth, my opinion as a BA employee resident in Ireland and using EI to commute; is that BA, in time, will reduce or even cancel their own flights to DUB and BHD in favour of EI because of the aforementioned EI lower cost base. This would also free up BA's LHR slots for future expansion.
ORK would be a dicier proposition (worryingly my commute), and could potentially see a reduction, and SNN may well finish it's LHR connection.

Talking to EI crew, the realisation is that a long term future can only be secured through consolidation and that being he case IAG may well be the best option. For a lot of EI crew, Walsh at he helm is more of a concern. Once bitten twice......

[Jet Set Willie]

Would you not keep the BA tail in at least DUB by flying to LCY, and perhaps have BHD as an option in the future for point to point traffic? Then as you say, use EI as feeder for LHR long haul. Good for BA, great for EI traffic loads!!

[DollarBill]

Talking to EI crew, the realisation is that a long term future can only be secured through consolidation and that being he case IAG may well be the best option. For a lot of EI crew, Walsh at he helm is more of a concern. Once bitten twice......

Indeed. WIllie is the worry for a lot of EI staff. He was generally loathed in his time as Captain, middle mngr and CEO.

Saying that, I believe IAG is the best strategic fit for EI.

In relation to the IAG pledges to the Irish Govt:
-Not selling the slots doesn't mean they cannot be leased.
-HQed in Ireland makes sense as its a sensitive subject but also takes advantage of the Irish 12.5% tax rate.
-"Operate the LHR routes for at least next 5 yrs" No reason why they would stop operating them. DUB-LHR is a goldmine for EI, hogh loads, high fares, high frequency. SNN and ORK feed into BA longhaul so cutting them will lose IAG pax overall. I could see a slight reduction in overall frequency on DUB-LHR,but if capacity remains even then "connectivity" is guaranteed. As above I think BA could pull off the route and use their own slots elsewhere.

[MAN FLEX 99]

What about the potential of expanding EI transatlantic and feeding UK traffic into DUB for transatlantic. This would allow BA over time to reduce its domestic frequencies to the likes of NCL, MAN, GLA, EDI and ABZ and use those LHR slots for longhaul operations.

[Heathrow Harry]

The BA model is to maximise UK transatlantic travel though LHR

which is why they have never put any serious effort into developing transatlantic services from Manchester, Birmingham or EDI

They aren't going to encourage people to go via DUB :bored::bored:

[EI-A330-300]

Indeed. WIllie is the worry for a lot of EI staff. He was generally loathed in his time as Captain, middle mngr and CEO.

Now that CORE will commence, staff may leave now before IAG comes along

As for the LHR slots, Willie will have to do more....

[gsky]

"They aren't going to encourage people to go via DUB "

Why not?

More and more people are viewing EI/DUB as a good alternative to BA/LHR.

If they (IAG/BA) 'own' EI, and many people currently DO avoid LHR (for a number of good reasons) and they (BA/EI/IAG) could, probably would gain business via DUB , Transatlantic, which they would otherwise not get !

They , IAG/BA , would then gain add revenue/profit which otherwise would go to another carrier.e.g. AF/KL/LH etc.

[malcolm380]

what gsky said. I for one would prefer to fly to/from BRS via DUB from the USA, and gain Avios in the process, and I'm sure IAG would rather have my low-yielding lowest fare possible going that route than me taking the 2+ hour drive from/to LHR for a seat they could probably sell anyway at a higher yield. It seems like a win-win for everyone, except AF/KL/LH etc. All I would need then is for EI to open up EWR, as it's much easier to get to than JFK.

[Sober Lark]

The BA model is to maximise UK transatlantic travel though LHR


Third runway, race for connectivity, new capacity and all that. There has to be involvement of a certain national pride but that aside LHR just hasn't got sustainable growth.

[EI-A330-300]

All I would need then is for EI to open up EWR, as it's much easier to get to than JFK.

You can fly UA to EWR during the summer months with EI/UA.

[Heathrow Harry]

"I for one would prefer to fly to/from BRS via DUB from the USA,"

Indeed - but that's not what BA want you to do..................

[simples]

"I for one would prefer to fly to/from BRS via DUB from the USA,"

Indeed - but that's not what BA want you to do..................

True, but It's IAG trying buy Aer lingus, not BA.

[tom1975]

Heathrow Harry - you are correct BA won't want you to go through Dub, but remember it's not BA making to offer for EI, so it's irrelevant what BA wants, it's what IAG want

[Skipness One Echo]

You can't view them in isolation in this day and age. BA's model evolves to serve IAG, with a close relationship with Iberia. The traffic likely to be using DUB over the regions isn't likely to be lounge focussed status collectors at the pointy end I suspect.

[Omnipresent]

IAG's role is to a) decide where best to invest in growth and b) maximise cost and revenue synergies between subsidiary airlines.

If EI joins the transatlantic joint-venture, BA and other members of the joint-venture have to take a "metal neutral" approach not favour one carrier over the other for revenue purposes.

If you look at IAG at the moment, the most significant growth is coming from Iberia and Vueling. Iberia has just announced three new long-haul routes and a vast number of new/reinstated short-haul routes.

Many of Iberia's new short-haul routes are actually from the UK: London Gatwick, Manchester and Edinburgh to Madrid, and London Heathrow - Tenerife and Gran Canaria.

Meanwhile BA has been really getting in the neck of over short-haul profitability.

So, provided IAG can grow EI profitably, IAG will expand it, both in Ireland and the UK.

[CCR]

Think BA will deffo use some of their current Heathrow slots for Belfast & Dublin for more lucrative long haul destinations on bagging the extra EI slots.

Within IAG, Dublin will be "prioritised" like Manchester and Birmingham for long haul compared to LHR like Cork, Belfast and Shannon are currently "prioritised" for EI expansion compared to Dublin.

[Faire d'income]

Indeed. WIllie is the worry for a lot of EI staff. He was generally loathed in his time as Captain, middle mngr and CEO.

The smear never goes out of fashion in DUB it seems. A favourite tactic of one particular strategist.

I wouldn't pretend to speak for lots of people but I have never heard of anyone loathing him as a captain and not too many as a manager either. Certainly the pilots hated him for the lockout, but at least that was a time when the pilots properly stood up for themselves. Now it is all bluster, ballots and secret back-room deals.

Maybe Willie will bring genuine unity back. :)

[carlrsymington]

I have been scratching my head for ages trying to work out why BA \ IAG want Aer Lingus for and what will they do with them?

My guess is they have identified 2 moves (apart from the usual synergies... sorry for the business speak) They will split \ separate \ divide some of their US destinations from LHR and offer connections through DUB, offering pre-clearance, quicker transit & after all you are closer to the US from DUB. The inter UK flights could free up slots to serve the "emerging markets \ more profitable" destinations.
Put A320 or A321 on DUB \ BFS routes to soak up pax and free a few more slots.
If someone from MAN \ BRS \ EDI \ GLA etc can hop to DUB & on to the US why would you want to go via LHR?
Does the lack\reduced rate of APD from DUB play any part in this? I don't know.

[Skipness One Echo]

Killing frequency on UK domestic routes is potentially counter productive bearing in mimd they need to remain frequent to be competitive on point to point. Given BA are focussing on improving profitability on short haul and given the Shuttle runs do quite well, I don't see a lot of scope for change in terms of cutting back.

Why would you go via LHR? Well count the number of destinations BA serve in the US versus the number EI do! :) That's why.

[Sober Lark]

I have been scratching my head for ages trying to work out why BA \ IAG want Aer Lingus for and what will they do with them?
Another itch worth scratching is pondering over Ryanair's plan B. Is O'Leary's silence disagreement or consent?

[aer lingus]

He wants his money back, plain and simple. Also he will be able to use the slogan "The only Irish Airline" in his advertising if the deal go's through.

[MCDU2]

He will also expand out of Ireland as IAG pull off "sun" routes enabling MOL to jack up the prices. In return he agrees to sell and also pull back on primary airports in competition with IAG. It's a win/win for everyone except the consumer and the poor mugs in ground ops/back office that will be in the dole office or emigrating.

[Heathrow Harry]

"so it's irrelevant what BA wants, it's what IAG want"

and who is the main player in IAG??

If you think the two entities are separate you are crazy - BA is THE major constituent of IAG and it's importance overrides all else

[tom1975]

Think what you like, but if that was the case, IAG would be operating unethically, and should be subject to investigation!

IAG should be working on behalf of their shareholders to drive profit, and NOT on behalf of one of the airlines within the group, to the detriment of the others!

[WHBM]

Killing frequency on UK domestic routes is potentially counter productive bearing in mimd they need to remain frequent to be competitive on point to point. Given BA are focussing on improving profitability on short haul and given the Shuttle runs do quite well, I don't see a lot of scope for change in terms of cutting back.

If BA domestic Shuttle routes got the load factors they do at the yields they charge for domestic passengers, they would indeed be significantly profitable.

What knocks them is the share of the revenue of the connecting passengers which is attributed to the domestic sector. This is entirely down to the management decision of what proportion of the total fare paid by the passenger is attributed. I understand that in some cases it is as low as £1, all the rest of the revenue being attributed to the long-haul.

It was an even worse problem for BMI, and one of the key things that led to their sustained unprofitability, all the Star Alliance connecting passengers where the long-haul share was actually going to a different company.

[Andy_S]

and who is the main player in IAG??

Qatar Airways? They are the biggest shareholder....

tom1975 is correct. IAG are a company listed on the London Stock Exchange. It's directors have to act in the best interests of IAG shareholders rather than any particular operation within IAG. The tail isn't allowed to wag the dog.....

[Omnipresent]

Iberia and Vueling are currently expanding capacity at more than twice the rate of BA and Iberia is using LGW and LHR slots to launch new services.

Additionally, IAG is demanding BA improve the financial performance of short-haul. Otherwise, investment in short-haul aircraft will go elsewhere.

BA does not pull the strings at IAG.

[CabinCrewe]

GLA Donegal Loganair replaced by Aer Lingus regional to suit PS contract. Wonder if it will do any better than the LC attempts?

[Fairdealfrank]

The BA model is to maximise UK transatlantic travel though LHR

which is why they have never put any serious effort into developing transatlantic services from Manchester, Birmingham or EDI

They aren't going to encourage people to go via DUB

#No they are not, but most UK airports don’t have links to LHR, so it‘s a choice between DUB and AMS. Ownership of EI allows IAG to grab a share of this.



More and more people are viewing EI/DUB as a good alternative to BA/LHR.At most UK airports it’s an alternative to KL/AMS, not BA/LHR


If they (IAG/BA) 'own' EI, and many people currently DO avoid LHR (for a number of good reasons) and they (BA/EI/IAG) could, probably would gain business via DUB , Transatlantic, which they would otherwise not get !

They , IAG/BA , would then gain add revenue/profit which otherwise would go to another carrier.e.g. AF/KL/LH etc.
Exactly, that is the point.



Think BA will deffo use some of their current Heathrow slots for Belfast & Dublin for more lucrative long haul destinations on bagging the extra EI slots.
No need, BA has enough slots since IAG bought BD.



I have been scratching my head for ages trying to work out why BA \ IAG want Aer Lingus for and what will they do with them?

My guess is they have identified 2 moves (apart from the usual synergies... sorry for the business speak) They will split \ separate \ divide some of their US destinations from LHR and offer connections through DUB, offering pre-clearance, quicker transit & after all you are closer to the US from DUB. The inter UK flights could free up slots to serve the "emerging markets \ more profitable" destinations.
Put A320 or A321 on DUB \ BFS routes to soak up pax and free a few more slots.
If someone from MAN \ BRS \ EDI \ GLA etc can hop to DUB & on to the US why would you want to go via LHR?
Does the lack\reduced rate of APD from DUB play any part in this? I don't know.
One other possible reason: maybe IAG don’t want another group buying EI and possibly asset stripping it in much the same way that LH did to BD (before 2009, BD had 14% of LHR slots, in 2012, 8%).

[DollarBill]

One other possible reason: maybe IAG don’t want another group buying EI and possibly asset stripping it in much the same way that LH did to BD (before 2009, BD had 14% of LHR slots, in 2012, 8%).


I'm a fan of this logic. IAG buying EI is a defensive move in my opinion. They keep the UK Regional/Irish pax revenue in the group AND prevent anyone else making inroads into the UK market or increase their presence at LHR.

[EI-BUD]

Surprising that EI do not offer a Donegal London connection as Flybe did via Dublin through BA

[Una Due Tfc]

I see on the Heathrow thread that SAS have sold a slot pair for $60 million dollars.....meaning EI's 23 pairs, if released to the market on a phased basis to keep the price high, would be worth $1.38 billion, only slightly below what IAG have offered. If I was MOL I'd try and squeeze a few more cents out of them :}

[DollarBill]

But do recognise that that US$60M figure is seen as well above the estimated value. This could be a very well timed arrival/departure pair. The 'normal' estimate is approx US$35m per slot pair.

[chuboy]

GLA Donegal Loganair replaced by Aer Lingus regional to suit PS contract. Wonder if it will do any better than the LC attempts?

What were Loganair's LFs like? From what I have heard people are quite sad that EI has taken over as hold baggage now costs extra on top of the base fare.

Surprising that EI do not offer a Donegal London connection as Flybe did via Dublin through BA
North American connections are offered but frankly, the timing of the connection is not good at all, you could drive in the time you spend waiting in Dublin.

I would lke to see EI offer European connections in general, considering synergestic connectivity was one of the reasons it won the PSO/the PSO was renewed in the first place.

[EI-A330-300]

IAG to outline plans next week:

Develop Dublin as a hub by adding new routes with AA to their eight hubs in the US while cargo growth will be a major area of growth and increase capacity out of Dublin accross the board. DUB will operate just like LHR and MAD.

They are also planning to neet opposiation parties to take the political meddling out of the equation.

Untill the LHR guarntee is extended to 15-20 years I cannont see any movement.

[owenc]

I hope you are aware that it is a 4 hour journey to Donegal from Dublin. I don't know about you but the propsect of that after a sleepless night tossing and turning does not sound particularly endearing.

I like the idea of the AA hub route thing. They will have 4 destinations this summer, I think they should upgrade their aircraft interiors though. And if they are really serious about the transatlantic hub hopefully we hear about more daytime flights.

[DollarBill]

I don't know about you but the propsect of that after a sleepless night tossing and turning does not sound particularly endearing.

I'm sure chuboy is aware of the drive time from Dublin to Donegal. Yet again you don't seem to realise that some people can sleep on night flights and that they don't mind a long journey after landing if the price and the travel times suit them. Don't use your personal opinion to colour the discussion. Personally I could sleep on the floor of an aircraft cabin, but I realise that is me, I don't assume everyone else can sleep as easily as me.

Eastbound T/A are always going to be night flights as their timing is determined by the earlier westbound flight from Europe. There are a handful of T/A flights which go against this pattern.

[chuboy]

I hope you are aware that it is a 4 hour journey to Donegal from Dublin. I don't know about you but the propsect of that after a sleepless night tossing and turning does not sound particularly endearing.


Yes I am quite aware of that. There are regular coach services from Dublin Airport to Letterkenny and to the towns closest to Donegal Airport. That's a 5 hour trip at what, 20 or 30 euro each way with as much baggage as you can carry? Or you could always drive if you were so inclined.

When you can do that for cheaper than the DUB-CFN leg AND still beat the plane because of the unfavourable flight timing, why bother? :(

[Omnipresent]

Aer Lingus' LHR slot portfolio is not that valuable in isolation. It does not have many early morning arrival slots which, if it did, IAG would want to convert to long-haul for BA.

[owenc]

I don't know its just a killer driving home from that Dublin airport to anywhere past Belfast. I've done it once and i'll not be doing it again unless I stay in a hotel.

If I was from Donegal i'd probably fly via Glasgow or something. You need to be realistic no one will want to drive across half of Ireland after a transatlantic flight.

And Aer Lingus are launching a transatlantic day flight this summer. We are in a prime spot to introduce more of these flights being 1 hour closer to Ameria than Heathrow. If a flight left Boston at even 9:30am it could arrive at 8pm whereas if it were Heathrow it would arrive at 9. Just an example.

[DollarBill]

I don't know its just a killer driving home from that Dublin airport to anywhere past Belfast. I've done it once and i'll not be doing it again unless I stay in a hotel..... You need to be realistic no one will want to drive across half of Ireland after a transatlantic flight.
You need to be realistic and realise that just because you don't like it doesn't mean others won't too. As chuboy points out there are multiple bus options which may very well beat the CFN-DUB on price, timing and convenience.

[Una Due Tfc]

I'm with DollarBill on the sleeping thing. I'll sleep in economy no problem. I've slept in cockpit jumpseats (got woken up by turbulence once and was extremely confused) and the fold down seats cabin crew use during take off and landing, and I can assure you those are far less comfortable than an economy seat, even an FR one! Couldn't walk right for weeks.....

Connecting from CFN to GLA, all depends on the times of the T/A flights, and where they are going, who with etc. I can't praise JetBlue enough in comparison to the U.S. legacies, who are all woeful, especially AA. DL are the best of a bad bunch in my experience.

[Una Due Tfc]

Consider my brow firmly beaten Cyrano.

I'm curious about EI102/103. Early day time departure from JFK, arrive in DUB at 23:30 local was it? I'm guessing they are after business people looking to get a good night sleep in a hotel before doing a day's work in Europe, but it arrives way too late to get any connection with EI, and they're using a 757 with no sat broadband, unlike the Airbus, meaning these people can't do any work on the flight. Is there any scope for swapping an an A330 if loads demanded it? Put the Boeing on a later rotation? There are plenty of daytime flights to LHR to compete with.

[Noxegon]

I wouldn't assume it's only business people. I'd say anyone who doesn't want the purgatory of an overnight transatlantic schedule and the resulting jet lag.

I'll definitely be using the daytime flight if I have to go to New York this year.

[owenc]

I'm also considering flying from Belfast on the way there and with them on the way back. Can't be asssed with the whole sleep thing. Only problem is united doesn't have it.

I think it is targetting everyone and is more a test in the water. Its better than any of the LHR routes as it leaves well past their timings of 8am.

[Skipness One Echo]

Key point here is that what a few might like isn't supported by enough revenue. The daylight flight means missing a full working day, and so however owenc might want to rearrange a market to suit his ideas, that's not how life works. If indeed they're just "having a go" to "see what happens" then someone in route planning needs a career change(!) Aer Lingus need to maximise their assets in summer to pay for the lean winter months which means making as much €€€€ as humanely possible.

Daylight flights are also comparably rare to LHR.
VS offer JFK/EWR, BA JFK/BOS, AA offered ORD and are opening PHL, and UA offer IAD/EWR. With AC on YYZ, it's a single flight from each major Eastern hub really with no London connections offered.

[DollarBill]

I'm curious about EI102/103. Early day time departure from JFK, arrive in DUB at 23:30 local was it? I'm guessing they are after business people looking to get a good night sleep in a hotel before doing a day's work in Europe, but it arrives way too late to get any connection with EI, and they're using a 757 with no sat broadband, unlike the Airbus, meaning these people can't do any work on the flight........

I would argue that they are targeting the Leinster region pax and the business pax who have meetings in NYC. The early arrival suits both markets and the pre-midnite return suits the former. The late arrival into DUB could also suit some MNC exec's with a full work day in Dublin the following day. Getting the Irish based pax out early also allows them to offer more seats to inbound transfer pax.

Personally I am happy to see EI trying this option. Frequency on a busy route is attractive for the higher yield pax.

And in relation to wi-fi on the B757's.....have a little patience. ;)

[Noxegon]

The daylight flights from the US to LHR don't have time to get in two crossings per day before falling foul of the curfew either at LHR or JFK.

Aer Lingus has solved that problem rather nicely.

[WHBM]

Having taken the eastbound daylight flights into London they are not all they are cracked up to be. Well known is the lack of connections at both ends, which really restricts them them to point-to-point.

But take the current BA JFK-LHR flight, departs 0830, arrives 2015. You really need to be at JFK by 0700, leaving a midtown-Manhattan hotel shortly after 6, before breakfast service starts, getting up at 5, which among other things cuts back on any previous evening events.

Into Heathrow at 2015, quite possibly on a remote stand as BA overnight maintenance arrangements take precedence for parking allocations. By the time you have your bags and exited it's probably 2115, and you are starting to risk any last-train out beyond Central London. Even with a hotel there, Heathrow Express and a cab will have you there about 2230-2300. Restaurant closed, a shame as since lunch in the plane you only got a packet of birdseed before arrival. You probably don't sleep well because it's only 1800 New York time, so still feeling a bit zonked the next morning.

Yes, overnight flights also have all sorts of issues, but the daylights are not the panacea they first appear. I now avoid them. Notably, the BA business flights from New York to London City don't do them.

[Heathrow Harry]

share price falling - City types think deal won't go though...........

[DollarBill]

share price falling - City types think deal won't go though...........

My thinking too. Was steady at 220-225....dropped to 209 today.

I really think this is a lost opportunity. No-one else will want to touch EI if the Govt scuppers this deal.

[cuallnow]

Yes, tragic. I mean who is possibly going to be interested in a quality airline which consistently makes money? Poor Aer Lingus i suppose they'll just have to struggle on making money and serving the people of Ireland while acting as the underwriter of Ireland's connectivity. I subscribe absolutely to the iag/ryanair mantra that without them Aer Lingus is doomed and i know intuitively that their warnings are entirely altruistic and not self serving in any way. Independent thought is just too much work.

[AerRyan]

Im breathing a sigh of relief at this blocked takeover. I couldn't and still cant see the deal having any positive benefit.

[Epsomdog]

share price falling - City types think deal won't go though...........

My thinking too. Was steady at 220-225....dropped to 209 today.

I really think this is a lost

My feeling also. A real chance to team up with a big player, and shake of government shackles at last!

I can't see IAG/EI dropping any Ireland routes if there's money to be made! If the gov wanted EI to be a PS airline they shouldn't of privatised. Will Ryanair protect their precious slots? They certainly won't operate a route at a loss, for the politicians!

[cuallnow]

Nonsense, iag one of many 'big players' to be played with. No question of loss making routes being maintained but difference is that as an Irish airline dedicated to Ireland there won't be any showboating ie. Pulling of viable routes to make political points as has happened many times with the competition. No Aer Lingus should probably not have been privatised but allot of good was achieved while it was. Now a solution has to be found that guarantees Ireland's connectivity which is by far the bigger issue while allowing commercial forces to maintain the lean mean Green machine and that site as s@#t ain't IAG.

[Andy_S]

Im breathing a sigh of relief at this blocked takeover.

Who says it's been blocked??

[Cyrano]

Willie Walsh will appear before the Oireachtas Transport Committee on Thursday. Expect some robust questions and (at least) equally robust answers!
IAG boss Willie Walsh to face Oireachtas committee (http://www.irishtimes.com/business/transport-and-tourism/iag-boss-willie-walsh-to-face-oireachtas-committee-1.2098303)

[Epsomdog]

Ireland's connectivity which is by far the bigger issue while allowing commercial forces to maintain the lean mean Green machine and that site as s@#t ain't IAG.

Most probably RyanAir!

Aer Lingus has improved vastly since privatisation, I agree but they must be free of the political shackles imposed on them. No other EU Airline would agree to the government terms, so I boils down to who do you trust to serve the nation best. O'Leary or Walsh?

Why trust politicians to run an airline, when they can't even manage a country!

[owenc]

No government has any business involving itself in a mutlinational company.

[EI-BUD]

As someone who has wholeheartedly been in favour of the proposed IAG takeover of EI, I am extremely pensive today in light of the ruling by the British Competition Authority (Competition and Markets Authority /(CMA)) on Ryanair's need to dispose of its shareholding in Aer Lingus.

Ryanair are appealing to the supreme court of human rights, challenging the CMA ruling on the grounds that ' Clearly the CMA's case has now been totally undermined by the IAG offers' (referenced from RTE news service online today 12/02/15).

Lets make some very large assumptions;
1. Lets assume that BA get to take over IAG
2. Lets assume that FR can challenge the CMA's ruling. (('Ryanair said the IAG bid "wholly disprove[s] the CMA's unsubstantiated claim that Ryanair's shareholding somehow prevented other airlines from merging with or bidding for Aer Lingus')) - from RTE news 12/02
3. Lets assume that Ryanair win and subsequently buy the BA holding, Slots go to BA, Ryanair then control EI. Comforts provided by BA or guarantees are great, but if FR got its hands on EI, there would be little in principal that the Irish government could do about said guarantees...
4. BA expansion of London route portfolio for long haul, exclusivity on LHR DUB and ORK and FR and BA exist in harmony... or something like this....

Completely unlikely or possibility?

These are huge assumptions and many dependencies to arrive that the outcome suggested, but worth considering in my view.

EI-BUD

[Epsomdog]

Court of appeal has refused permission for Ryanair to appeal to the Supreme Court!

[alserire]

Walsh was very impressive in front of the Parliament Transport Committee today. Just watched it there. Fortunately if you're against the deal our parish pump politicians made it clear, via their questioning, that it's very likely that IAG will be refused. In fact expect to hear politicians call tomorrow for the government to buy Ryanair's shares and aim for majority control.

[racedo]

Court of appeal has refused permission for Ryanair to appeal to the Supreme Court!

Course it would do that as pretty standard for judges not to wish to have judgement referred. That's not a ground for not going further.

[Cian]

Course it would do that as pretty standard for judges not to wish to have judgement referred. That's not a ground for not going further.


Thrashing around rather desperately there at this stage...

I doubt the shareholders are going to be happy if they continue pissing money down the drain fighting this, particularly as selling the shares at any price would be a gain now its been written off.

[aer lingus]

Gov won't be able to buy FRs shares under EU policy of Gov's not being allowed invest in business like this.

[Cyrano]

Gov won't be able to buy FRs shares under EU policy of Gov's not being allowed invest in business like this.

I'd be interested to learn more about what this policy is - any pointers? Given that the Scottish Government bought Prestwick recently there doesn't seem to be any blanket prohibition on EU governments investing in aviation.

[Epsomdog]

Aer Lingus believes that IAG’s proposal can enable Ireland to become a central hub for European traffic across the Atlantic resulting in better utilisation of the infrastructural investment that has taken place at Irish airports

Enhancing Ireland’s position as a natural hub for Europe on the North Atlantic

Ireland’s location at the western-most point in Europe makes it a natural gateway to connect the combined populations of Europe and North America
Accelerating Aer Lingus’ transatlantic, long haul growth plans

Aer Lingus sees the potential for its planned growth in transatlantic traffic to be significantly accelerated and for new US destinations to be added to its network.

Growing employment

Additional transatlantic traffic and destinations growth will create significant numbers of new jobs in Ireland: new direct and highly skilled jobs within Aer Lingus and new indirect jobs in support activities and the tourism sector

Enhancing short haul growth

Aer Lingus’ short-haul services, including on the Dublin, Cork and Shannon to London Heathrow routes, will directly benefit from sales and marketing activity conducted on its behalf by the British Airways, Iberia, Vueling and oneworld partner sales forces

Strengthening Ireland’s connectivity

The anticipated benefits to both Aer Lingus’ long-haul and short-haul networks brought about by Aer Lingus being part of the larger IAG group will result in better connectivity to and from Ireland

Accessing a global cargo network

Aer Lingus' cargo business will benefit from the global network reach and sales channels of the IAG Cargo business. This enhancement of the cargo network is expected to deliver significant benefits and additional options to Irish businesses, in particular the pharmaceutical and semi-conductor industries.

[Omnipresent]

In the full announcement, it also suggests that IAG may be willing to waive some of its original conditions:

http://corporate.aerlingus.com/iagoffer/pdf/Possible-offer-update-13-February-2015.pdf

On 27 January 2015, the Board of Directors of Aer Lingus (the "Board") announced that it had indicated to International Consolidated Airlines Group, S.A. ("IAG") that the financial terms of IAG's proposal (the "Revised Proposal") valuing each Aer Lingus share at €2.55 (comprising a cash offer of €2.50 and a dividend of €0.05 per share) were at a level that the Board would be willing to recommend, subject to being satisfied with the manner in which IAG proposed to address the interests of relevant parties. The Board continues to believe that the financial terms of the Revised Proposal are in the best interests of Aer Lingus' shareholders.
The Revised Proposal remains conditional on, amongst other things, confirmatory due diligence, the recommendation of the Board of Aer Lingus and the receipt of irrevocable commitments from Ryanair Limited and the Minister for Finance of Ireland to accept the offer, all of which may be waived in whole or in part by IAG.

Aer Lingus Chairman, Colm Barrington said: "Over recent weeks the Board of Aer Lingus has listened carefully to the public debate which has taken place regarding IAG's proposal. We have had further detailed discussions with IAG and the Board has a greater understanding of IAG's intentions for the future of Aer Lingus and the proposed commitments that IAG is prepared to make in relation to Aer Lingus. These discussions have further confirmed that it is clearly in IAG's interests to continue to grow Aer Lingus within the IAG Group. The Board's view is therefore that a combination of Aer Lingus with IAG has a compelling strategic rationale and will deliver significant benefits for Aer Lingus, its employees, its customers and for Ireland."

[Hangar6]

Good to see 1st reconfigured A330 back today and 2nd one tomorrow , they will be in service almost immed. 3rd A330 goes to BOD tomorrow.

[EI-A330-300]

Good to see 1st reconfigured A330 back today and 2nd one tomorrow , they will be in service almost immed. 3rd A330 goes to BOD tomorrow.

Looks rather well, flying to the US tomorrow.

Notice IAG also announced yesterday that non EU shareholding in IAG will be limited to 40%. Wonder if that was raised by the Gov since QR took 9.9% or was it always planned.

[racedo]

Aer Lingus believes that IAG’s proposal can enable Ireland to become a central hub for European traffic across the Atlantic resulting in better utilisation of the infrastructural investment that has taken place at Irish airports


Wonder which PR Firm got paid to come up with that bs.

[Copenhagen]

Oh Racedo, stop trolling for gods sake.

[owenc]

So will Aer Lingus join IAG? It keeps going back and forwards, idk??? I am really struggling to work out what is happening.

[Copenhagen]

Owen, when you plan on spending close to a billion on something, its not like buying a icepop down the corner store.

IAG want to Buy EI, EI want to be bought by IAG.

EI's shareholders are considering the acquisition.

[owenc]

Alright thats all I needed to know I was just questioning posters because not a while ago people were saying they canceled the deal.

[Copenhagen]

Owen, I know you are only 14, please don't believe everything you read on the interweb.

[Epsomdog]

Small airline, small country, small minds ? the Aer Lingus story (http://businessetc.thejournal.ie/readme/aer-lingus-iag-acquisition-1936428-Feb2015/)

Worth a read!

[blaggerman]

Worth a read!Indeed. After a few recent years of profit and long haul expansion, people forget how vulnerable EI is. They have barely broken even since floatation. Filling the broken pension pot will suck out another couple of hundred million. A new fleet needs to be financed in the next few years. The risk to the company's future is reflected in the share price which was in terminal decline until IAG showed up, and will go back there rapidly if the deal fails. But the parochial mentality mentioned in the article is alive and well and the politicians and unions will continue to kick it around as they always have, serving their own self interest.

[racedo]

Owen, when you plan on spending close to a billion on something, its not like buying a icepop down the corner store.

IAG want to Buy EI, EI want to be bought by IAG.

EI's shareholders are considering the acquisition.

Er No

There has been no proposal put to shareholders yet.

[EI-BUD]

Epsomsdog;

An interesting article, thanks for sharing.

While I agree with much of the content, I think it is a little miss informed in some areas.

Namely, critising the failure to grow the company while Ryanair became so big and so successful. Equally, failing to recognise that Aer Lingus has succeeded where others have failed, namely being able to compete with Ryanair and the transformation that they delivered in the face if huge barriers such as union interest, legacy practices and high cost base.

There are next to no examples of legacy airlines in Europe that have expanded into operations that do not involve their home markets, LH tried in Italy, it didn't last long. To have achieved expansion into non Island of Ireland operations a new brand with low cost base would have been needed, by the time Aer Lingus were ready for that the market was saturated with LOCO's, equally legacy carriers doing low cost has often been as MOL describes it an airline with charges for inflight food. So timing is the issue there ...

Furthermore, the writer despite some valid points completely fails to recognise that Aer Lingus has been amazingly resilient opposite Ryanair, making profits, and managing to compete. Other 'national carriers' (let's not debate that term), have folded and burned cash at a rate of knots in the face of similar or less challenge from Ryanair. Equally, other low cost carriers have cut and run in the face of Ryanair competition. Aer Lingus has not.

I do however, agree Aer Lingus does need to be part of a larger operation that can help it expand and grow, and one that offers it connectivity

[bannercounty]

Who's to say EI has been profitable v Ryanair since neither compete across the Atlantic. Firstly the profitability of the TA routes should be omitted to form any basis of notions of resilience. It may in fact be that EI only break even or loose money on short haul.

[Jamie2k9]

It may in fact be that EI only break even or loose money on short haul.

There is no may about it, short haul makes little profit, without long haul there would be no profits. They are feeling the recent FR capacity increases out of DUB this winter and have made adjustments to off set losses.

[EI-BUD]

Jamie,

Fair enough comment and clearly the data on how they fair head to head v Ryanair is not publically available , but EI have survived in the face of incredible competition, who equally says that FR profit on every route where they compete with EI either. FR have deep pockets to hurt EI and they haven't kept on every route where the 2 meet , though there are few enough examples.

My point is EI are resilient and their model enables them to compete with FR on the scale that they do ...

[Skipness One Echo]

So eight aicraft make all the money? No wonder they're vulnerable.

[Epsomdog]

There is no may about it, short haul makes little profit, without long haul there would be no profits.

Without short haul, longhaul would have no pax to fly! Can't see them making a profit then!

You have to take account of the whole operation!

[AerRyan]

Im starting to wonder though, why does EI fly from cork?

[Jamie2k9]

Jamie,

Fair enough comment and clearly the data on how they fair head to head v Ryanair is not publically available , but EI have survived in the face of incredible competition, who equally says that FR profit on every route where they compete with EI either. FR have deep pockets to hurt EI and they haven't kept on every route where the 2 meet , though there are few enough examples.

My point is EI are resilient and their model enables them to compete with FR on the scale that they do ...

Very true and EI will do fine but it is very competitive and always a risk.

So eight aicraft make all the money? No wonder they're vulnerable.

11 but they contribute the bulk of profits which I expect is repeated across Europe. Carriers like KLM/AF/LH are not trying to set up locos for nothing.

Without short haul, longhaul would have no pax to fly! Can't see them making a profit then!

You have to take account of the whole operation!

Indeed but transit passengers are low on the grand scheme of total short haul traffic + take EI regional away and they are lower. It is good to see them targeting new European points for transit this summer which have next to no t/a services.

SH makes profit for 6 months and loses for another 6 months. Sooner EI manage to cut down losses in winter and increase LF's they will be fine. I expect the results this month will show a much better performance over this winter which is good.

[Skipness One Echo]

11 but they contribute the bulk of profits which I expect is repeated across Europe.
How do we get to eleven long haul aircraft? They have seven active A330s and three lease B757s? I didn't count the B757s as they're not mainline but you get the idea. They can't be flying 38 narrow bodies to feed around ten long haul aircraft split across two long haul airports. The only feed is at DUB, if short haul can't make it's way in that business model, then it's dangerously skewed to one part of the business?

[Heathrow Harry]

"Im starting to wonder though, why does EI fly from cork?"

politics of course

[Jamie2k9]

How do we get to eleven long haul aircraft? They have seven active A330s and three lease B757s? I didn't count the B757s as they're not mainline but you get the idea. They can't be flying 38 narrow bodies to feed around ten long haul aircraft split across two long haul airports. The only feed is at DUB, if short haul can't make it's way in that business model, then it's dangerously skewed to one part of the business?

Just because you don't count them doesn't mean they should be excluded. 11 also included the additional 332 coming.

It's 36 narrow bodies on short haul and just because it don't make major profit means nothing as it's performance is always improving however it has being hit with industrial action over the last 2 years which will always impact consumer confidence. Thankfully that's all done with now!

"Im starting to wonder though, why does EI fly from cork?"

politics of course

They would drop Cork if they needed to, politics is Shannon's tool but they wouldn't let that stop them which has being demonstrated over the last number of years.

[Una Due Tfc]

The 757s in Shannon do make money to be fair. SNN-BOS wouldn't be getting upgraded to a 767 if it wasn't making money, and SNN-LHR feeds BA so I don't see why that would go if IAG took over. Eventually the 757s will be replaced by 321 neos. However given IAG's policy of focusing on their hubs, would there be any based in SNN in the long run? If not one of DL/AA would probably go year round.

I wasn't able to decide if IAG would be good or bad for EI, going through all the positives and negatives. I now think it will be a huge opportunity missed in the medium to long term if IAG don't take over. Once again parish pump politics is threatening to screw this airline, and the Irish aviation sector as a whole.

[Skipness One Echo]

Just because you don't count them doesn't mean they should be excluded. 11 also included the additional 332 coming.
Is that an ex EI machine coming back or a new build? The B757s are not flown by Aer Lingus though, they're outsourced, so being slightly picky but hey. Also taking out the VS A320s takes it back to 35 IMHO but you get the idea.

ust because it don't make major profit means nothing as it's performance is always improving
Seriously, one bad year, one predatory competitor will kill this stone dead. Any commercial operator (excluding the usual ME3 types) could be dead in months of a sustained assualt on their long haul. The standalone Irish model of feeding long haul via DUB already appears to be at maximum capacity, what's next if not IAG?

[cuallnow]

Strange sort of a circular argument/game where we can arbitrarily discount elements of a business in order to prove viability as a whole. But sure lets play the game..if one only counted aircraft Fr's dublin based aircraft and determined their profitability should we then turn out the lights in their little swords office? Or could it be said that completion on Irish short haul routes is fierce and that consequently margins are slim..to the betterment of the Irish consumer. I'm sure Fr would have love to have done away with Aer Lingus and jack up yields like they do in every other theatre but Aer Lingus has a compelling offering unmatched by Fr although I'm delighted to see them copying the Aer Lingus model now, just a shame they haven't the grace to admit where they got their ideas.

[EI-BUD]

Good points Cuallnow,

The scale of TA ops is the key that unlocks the sustainability of the short haul operation . Stobart Air competing on UK regional routes v Ryanair is a case in point. Aer Lingus need get after growth on TA ops in my view. No good reason that Dublin cannot become a hub airport of choice for connections between US and EU and further a field. plenty of capacity in DUB to support expansion, although some short haul may need to use T1!!

[Jamie2k9]

Is that an ex EI machine coming back or a new build? The B757s are not flown by Aer Lingus though, they're outsourced, so being slightly picky but hey. Also taking out the VS A320s takes it back to 35 IMHO but you get the idea.

It appears not to be EWR, so not sure where they are getting it from. I could double check but they have 40 short haul aircraft so 36 for their own operations.

Seriously, one bad year, one predatory competitor will kill this stone dead. Any commercial operator (excluding the usual ME3 types) could be dead in months of a sustained assualt on their long haul. The standalone Irish model of feeding long haul via DUB already appears to be at maximum capacity, what's next if not IAG?

A little dramatic, they have gotten through very hard years already and short haul is much more sustainable than it has being for a long time with Ryanair on top of them. Feeding long haul is not at max capacity by a long shot. Short haul profitability can be improved and as they continue to manage capacity and closing LGW base next month, CORE which has just commenced and will deliver up to 20% savings by getting rid of older staff for new ones and they delivered record revenue in Q3.

I think you need to put transit passengers at DUB into context with actual passenger numbers:
Short Haul - 8.45 million
Long Haul - 1.35 million
Regional - 1.31 million

750,000 transit - many brought by EIR/EI to EI but EI to United as well as American have increased transit a lot last year.

[Skipness One Echo]

Funny I thought the infrastructure at T2 in terms of CBP was maxed out already? Any strategic increase would need new capital investment and passengers going West all tend to travel at the same time. Feeding long haul has growth potential, the actual long haul operation is boxed in by constraints at DUB.
Aer Lingus has been through tough times and been bailed out by.....taxpayer €€€€€. I should have said "any commercial business can die in one bad season". A certain CEO told me that as he punched a desk in time to the syllables.....

[Jamie2k9]

Funny I thought the infrastructure at T2 in terms of CBP was maxed out already? Any strategic increase would need new capital investment and passengers going West all tend to travel at the same time. Feeding long haul has growth potential, the actual long haul operation is boxed in by constraints at DUB.
Aer Lingus has been through tough times and been bailed out by.....taxpayer €€€€€. I should have said "any commercial business can die in one bad season". A certain CEO told me that as he punched a desk in time to the syllables.....

The constraints which many can be addressed without investment are not a problem for Aer Lingus at all.

[ayroplain]

Aer Lingus has a compelling offering unmatched by Fr although I'm delighted to see them copying the Aer Lingus model now, just a shame they haven't the grace to admit where they got their ideas.

Pardon me while I break out into uncontrollable laughter. Where have you been for the last 30 years?

[Belboy]

I hear Stephen Kavanagh has been appointed CEO from March 1. Maybe this is already common knowledge and I'm just late in picking it up.

[cuallnow]

You're excused ayroplane, kind of you to ask and show deference. In the last 5 years, has the Aer Lingus model moved toward Fr's or vis versa. If you can answer that honestly for yourself you may recognise a laughing fool.

[AerRyan]

Aer Lingus has very much moved towards a LO-CO business model, not the other way at all. You have to pay for everything on Aer Lingus, very much the same as ryanair. The only difference is that Aer Lingus has green planes with no internal advertising.

[Una Due Tfc]

Sorry for changing topic folks, but I was just wondering if there is any scope on EI looking for earlier delivery of some A350s. The first 4 were originally due this year before the company deferred them until 2018 during the depths of the financial crisis. Given the expansion of long haul, and the cancellation of the Emirates order, would they be interested in taking some of their production slots? MSN038 hasn't got an owner according to this link

Airbus A350XWB Full Production List (http://www.abcdlist.nl/a350f/a350f.html)

Could be had Q2 next year by the looks of it. They could get all 9 by the end of next year if they wanted (not that they would). Any decision on the 6 options yet or are they waiting for the A330 NEO stats to be released? I know they plan on keeping the 330s until they are to be scrapped, last 3 of those arrived in 08, and EI-LAX was delivered in 1999 so plenty of legs left in the newer ones.

[EI-BUD]

Funny I thought the infrastructure at T2 in terms of CBP was maxed out already? Any strategic increase would need new capital investment and passengers going West all tend to travel at the same time. Feeding long haul has growth potential, the actual long haul operation is boxed in by constraints at DUB

T2 at certain time of the day i.e. morning is under pressure Skipness, but T1 has oodles of capacity. Lets not forget we had greater passenger numbers during the celtic tiger with only 1 terminal, though it was a tight squeeze!

[BFS BHD]

Belfast International Airport is doubling the amount from £20m to £40m in court against Aer Lingus for breaking contract and moving to Belfast City Airport!!

Aer Lingus hit by £40m damages claim by Belfast International airport | Business | The Guardian (http://www.theguardian.com/business/2015/feb/17/aer-lingus-hit-by-40m-damages-claim-by-belfast-international-airport)

[DollarBill]

...but I was just wondering if there is any scope on EI looking for earlier delivery of some A350s. The first 4 were originally due this year before the company deferred them until 2018 during the depths of the financial crisis.......

Could be had Q2 next year by the looks of it. They could get all 9 by the end of next year if they wanted (not that they would).
The deferral during the financial crisis was to 2016. The deferral to 2018 was announced approx 18 months ago.
EI do not need the A350's at this point. So I see no chance of them taking them 'early'.

[BFS watcher]

This would seem to be a large sum of money and a big chunk of EI's 2015 profits! I wonder who in EI was responsible for the decision and also if BHD had any involvement in encouraging EI to break the contract as that can be used against BHD by BFS.

[peacock1]

.....you are assuming that there's no break clause........

[EI-A330-300]

Operating profit up 18% to 72 million

Net cash up 29% to over 543 million

9 A350 confired between 2018-2020 (previously looked at 330neo)

Short haul revenue increased and not impacted by 10 million hit last May

Operating costs all fell with staff seeing biggest fall, fuel just 5%

Additional 10 million in CORE savings to take it to 40 million in 2015

Net profit made a loss because of pension and exceptional items

http://corporate.aerlingus.com/media/corporateaerlinguscom/content/pdfs/2014-Preliminary-Results-20150224-FINAL.pdf

[alserire]

And yet O'Leary thinks they can't survive :(


I still think they'd be better off with IAG mind you

[El Bunto]

As a result at 31 December 2014, Aer Lingus was 90% [fuel] hedged for the next 12 month period at an average price per tonne of $830 per metric tonne. This compares with 61% for the corresponding period at 31 December 2013.

Interesting, that means one of the A330-200s will be burning around ( 5.2 * 830 ) $4,300 per hour at cruise.

[Schipholhand]

Aer Lingus growth has been steady and organic, during a period of deep recession, without bluster, gimmicks, fe..in this, fe..kin that, disparaging remarks and denigration from it's CEO . Unlike MOL.:=. Just compare it to Easy Jet, who are quickly building up a similar image to Aer Lingus, and growing, leaving no bad taste behind them. IAG might be lucky enough to get Aer Lingus, probably at a bargain price...and the best of luck to both!