British Airways to buy out Aer Lingus...

Cork

I much prefer to see semi state companies following the private sector business model than either:
1. Being a burden on the state thru out dated work practices or ineffiencys.

and/or

2. Abusing their dominant market position at the expense of the consumer.

AngelofFire

Aer Lingus is making profits for the state

Aer Lingus is maintaining routes that private companies would have difficulty in doing so.

We can ALREADY choose a different Airline if we are unhappy with Aer Lingus or if we want to indulge in our fantasies about consumer choice.

The Government are just trying to prop up the Grandeur of Capitalistic Neo Liberalism.

And if Aer Lingus do have a dominant market position,is it not better to have a democratically accountable state monopoly than a private one Like Microsoft had on the US software market years go?

The bottom line is we dont NEED to privatise Aer Lingus.

Cork

The bottom line is we dont NEED to privatise Aer Lingus.

We don't. But Aer Lingus will not survive if it flops again.

Aer Lingus is maintaining routes that private companies would have difficulty in doing so.

Aer Arann picked up most of Aer Lingus's Cork to Dublin routes.


The state does not need either an airline or a pop radio station.

Why does the state hang on to stuff like 2fm and Aer Lingus.

The proceeds of which could be used for infrastuctural benefit tto our economy.

Aer Lingus is an airline. On of many that operate in the world.

We are a small country. Aer Lingus is a small airline. It does not fly to many destinations and it needs to merge or to be sold off.

Aer Lingus can no longer paddle in the warm waters of state subsidisation.

All the left wing mantras will not save Aer Lingus for the reality of the market place.

The Irish state won't be there to bail Aer lingus out again.

This is the kernel of the problem with Aer Lingus. It is a small airline & it will sink or swim according to the market and the ability it has to adapt to that market.

Would it be better if it was a part of a largeer entity?

Yes. Economies of scale and airlines are getting bigger.

daveirl

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arcadegame2004

The bottom line is we dont NEED to privatise Aer Lingus.

AngelofFire, you may recall that the Irish Government was forbidden from intervening to prop-up Aer Lingus with yet another injection of State funds during its last crisis in 2001. National Governments are forbidden from investing in companies unless those companies are profitable at the time of the investment. State bailouts of failing companies are forbidden.

In the event of yet another crisis in Aer Lingus in the future, Aer Lingus would probably require private-capital to help bail it out. Priivatisation would enable it to issue more shares in order to gain extra equity to help it out of such a rut.

We most certainly do need to privatise it. And enough please of this "democratically accountable" jargon. Aer Lingus are making profits for themselves, not for the Government. They need their 96 million euro profit to compete with Ryanair and co.

AngelofFire

Originally posted by arcadegame2004

In the event of yet another crisis in Aer Lingus in the future, Aer Lingus would probably require private-capital to help bail it out. Priivatisation would enable it to issue more shares in order to gain extra equity to help it out of such a rut.

.

They already did that with telecom and the unfortunate people who bought shares in the company ended up loosing a fortune.Because of privatisation it took longer to introduce DSL to this country than it did in many EU countries,there are still areas of this country without broadband access.So much for the profit incentive.

daveirl

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AngelofFire

Originally posted by daveirl
But Privatised telcos in other countries did bring in DSL quickly so the privatisation factor is only one of a number of factors.

Perhaps but we are small country surrounded by water distant from the core region of europe. Our telecommunications market wouldnt be as big as Germany or France.

daveirl

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arcadegame2004

They already did that with telecom and the unfortunate people who bought shares in the company ended up loosing a fortune.Because of privatisation it took longer to introduce DSL to this country than it did in many EU countries,there are still areas of this country without broadband access.So much for the profit incentive.

AngelofFire, these "unfortunate"s would not have been "unfortunate" if they had sold their shares early on when Eircom shares reached 5 euro. The Government made no guarantees about how high or low the price would go. When you buy shares they can go up or down, and not always for reasons pertaining to the health of the company. Mere rumours of problems, as well as speculation, can often be enough to cause share prices to move. That is not a good argument against privatisation.

How do you surmise that not privatising Eircom would have brought DSL any sooner? Provide evidence of this please.

AngelofFire

There is no valid argument to state that a company set to announce profits of €100 and has stated plans to provide new routes should be privatised other than to prop up the Dogma of Neo Liberalism.So much for the right accusing the left of being too ideological.Ryanair should not be the benchmark for all Airlines it serves as a different purpose to aer lingus.Aer Lingus always has been a national asset of importance particularily as we are an island nation dependent on tourism.

what about the fact that the management refused to sign off on the employee shared ownership trust in 2001 as part of a survival plan. A lot of work was put in to help turn Aer Lingus into a profit making company from the state,why should that work be transfered into turning the AirLine into a money making scheme to line the pockets of foreign entrepreneurs.

De Rebel

Originally posted by Cork
Aer Arann picked up most of Aer Lingus's Cork to Dublin routes.

They did. And they have more than doubled the effective prices on the route. As someone who subjects himself to that ordeal once or twice a week, the service Aer Arann provide is appalling. They fly when it suits them and charge what they like. Delays are dealt with in a "sh1t happens, get over it" kind of way. I have now started to drive/train again, such is the deterioration in the quality of the service.

This is the single most important long distance corridor in the country. There is every reason for the state to be involved and to ensure a frequent service. Likewise on the overseas routes. Some of these are of key national strategic importance and their smooth operation should not be left to the whims of the BAs/Bransons/O'Learys/Walkers of this world. If the government in its wisdom (not a quality that would springs to mind when one thinks of that little **** Brennan) decides to divest itself of Aer Lingus's equity, it should put a series of unequivocal riders in place governing the level, quality, frequency and price of the service. And it MUST find a way of retaining ownership rights in respect of the Heathrow slots.

Some state companies are irrelevant from a strategic perspective and should be gotton rid of e.g. Bord na Mona (in a fashion similar to NET and the Sugar Company). Some should be retained - eircom was an instrument of policy implementation in a strategic area and should not have been privatised. Aer Lingus is somewhere in between. But if it is allowed to go, the state needs to seriously consider how it will guarantee delivery of the strategic services that Aer Lingus was formed to provide.

arcadegame2004

Originally posted by AngelofFire
There is no valid argument to state that a company set to announce profits of €100 and has stated plans to provide new routes should be privatised other than to prop up the Dogma of Neo Liberalism.So much for the right accusing the left of being too ideological.Ryanair should not be the benchmark for all Airlines it serves as a different purpose to aer lingus.Aer Lingus always has been a national asset of importance particularily as we are an island nation dependent on tourism.

The valid argument is that the airline industry is highly cyclical and goes through bad times as well as good times. EU rules forbid state bailouts for failing companies. So if Aer Lingus enters yet another financial crisis in a few years it will have to be liquidated unless it can access private capital through share issues. Under EU rules, the State can only invest money into a company in good times. (And rightly so, because otherwise they would be discriminating in favour of one company and therefore against others).

what about the fact that the management refused to sign off on the employee shared ownership trust in 2001 as part of a survival plan. A lot of work was put in to help turn Aer Lingus into a profit making company from the state,why should that work be transfered into turning the AirLine into a money making scheme to line the pockets of foreign entrepreneurs.

I don't really care whether they are foreign or not. And I'd prefer them making profits than coming with the begging bowl every few years to the Government seeking a bailout for the umpteenth time. I recall that Ruairi Quinn wanted the Government to bail out Aer Lingus during its last crisis. That would only be throwing good money after bad. If the demand is there for travel to and from Ireland (and it DEFINITELY is) then the new owners will continue flights to and from Ireland. It's the law of economics that supply follows demand. US trade with Ireland is double that of US trade with China. We are the UK's 5 largest export-market. We are also the largest exporter of computer-equipment in the world, and 33% of computers in the EU were manufactured here. The Celtic Tiger has set off a chain of events that has culiminated in Ireland being so integrated into the global trading environment that airlines will continue to fly into and out of this country. To claim otherwise with lingo like "strategic national assets...blah..blah..blah" smacks of an appetite for central-planning of industry. But party-stooges are usually appointed to semi-state companies and it is hardly surprising then that they are so inefficient.

Aer Lingus needs to be able to compete with low-cost carriers like Ryanair or its market-share will be eroded. Its turnover was 888 million euro last year compared to 1.79 billion euro for Ryanair. Ryanair has 2,000 employees compared to 4,000 in Aer Lingus. The unions would not be so gung-ho about resisting the necessary job-cuts and outsourcing of catering to the private-sector if Aer Lingus was in the private-sector. You only have to look at the lack of troublemaking by the Ryanair unions as testament to this. Sell it off.

Originally posted by De Rebel And it MUST find a way of retaining ownership rights in respect of the Heathrow slots.

Well that should probably be part of any privatisation-deal.

BuffyBot

You only have to look at the lack of troublemaking by the Ryanair unions as testament to this

Yes, especially the large swathes of them who are non-unionised....

AngelofFire

Originally posted by arcadegame2004
.

Aer Lingus needs to be able to compete with low-cost carriers like Ryanair or its market-share will be eroded. Its turnover was 888 million euro last year compared to 1.79 billion euro for Ryanair. Ryanair has 2,000 employees compared to 4,000 in Aer Lingus. The unions would not be so gung-ho about resisting the necessary job-cuts and outsourcing of catering to the private-sector if Aer Lingus was in the private-sector. You only have to look at the lack of troublemaking by the Ryanair unions as testament to this. Sell it off.

Why should an Airline with filthy cabins,crap food and uncompfortable seats be the benchmark for all Airline companies.The only time i choose ryanair is when im going to Birmingham and spending 30 minutes in one of them bucket of bolts is bad enough, i dont want aerlingus to be reduced to those standards particularily if im spending 15 hours on a flight to LA.

BuffyBot

I dont want aerlingus to be reduced to those standards

You may not have noticed it, but that's pretty much where they are these days, especially on short-haul routes.

daveirl

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therecklessone

Originally posted by daveirl

Why is that a necessity? BA have higher standards than Aer Lingus and yet as I described earlier my flight to JFK via Heathrow is cheaper than a flight from Shannon to JFK. And I'd have to get to Shannon in the first place.

Thanks to competition on the London-New York route.

At one point in the not so distant past it was cheaper to book UK-Dub-JFK (for UK punters) with Aer Lingus than it was to book Dub-JFK (for us punters)! All due to the fact that Aer Lingus had to compete with the multitude of airlines flying transatlantic from UK airports.