Should Aer Lingus be privatised:Poll

therecklessone

arcadegame2004 wrote:

So if nothing will change (in your view) then why are you opposing privatisation of Aer Lingus?

I'd appreciate it if you credited my quotes if you don't mind.

Now tell me where I opposed privatising Aer Lingus?

Bebop

therecklessone wrote:

And why would anyone seriously welcome the airline being swallowed by any other airline? So that they can hive off the Heathrow slots for their own gain? Who would you have purchase EI? British Airways, British Midland, Lufthansa? Great, lets support competition by surrendering to our competitors...

Maybe I read that wrong, but it appears that you are against selling off Aer Lingus to anybody
I'm in favour of the sell off, how do you stand reckless one?

therecklessone

I disagree with selling the airline to another airline, particularly one which is a current competitor.

What if BA bought Aer Lingus, and decided that their own Dub-Gatwick flights weren't even close to full? Would you like to see them cancel EI flights to Heathrow and transfer that capacity onto their Gatwick flights?

I don't want to see another airline buy Aer Lingus so that they can cut and prune the service from Ireland to suit their own needs.

I do however see no need for the airline to remain in state control. My problem with current developments at Aer Lingus is the manner in which the airline is being transformed. I don't particularly like the business model, and I don't believe Aer Lingus could survive the lowdown dirty fight it would get from Ryanair if MOL decided to wage a fares war (like he did with GO)

arcadegame2004

Now tell me where I opposed privatising Aer Lingus?

Okay sorry. Misunderstanding. Forgive me the recklessone :eek:

Bebop

My position; I'm in favour of selling Aer Lingus off to the highest bidder


I dont think BA would buy Aer Lingus, certaintly not to get the Heathrow slots, when BA was privatised the monopolies commission made them give up some LHR slots,
If they were to buy Aer Lingus they would have to continue to run them using AL aircraft or lose them,even at that they may breach MC rules

Buying AL to get rid of competition into London would not work either, if AL vanish off the lucrative DUB-LHR route, some other carrier would replace them, maybe BMI, the vacant landing slots would be up for grabs, my understanding is that these can only be used on the same route, i.e. Air France could not buy them and use them for their London to Paris sector

Hmmm,
Theres certainly been a rise in the number of complaints since Aer lingus started this drift to cutting corners..
this gives a flavour of the turn around in opinions.
Funny how the recipe for profit písses off the regulars but packs in the newbies.
No frills on shorthaul is fine, but I wouldnt be caught dead in their outdated,over priced uncomfortable transatlantic premier service.

Yoda

Why not sell Aerlingus to SAS or Finnair? Those airlines make a profit and provide a superior service.

BuffyBot

Have they any good reason to want it?

therecklessone

Sorry for dragging this chestnut up again, but I just read an interesting report in yesterday's Sunday Times I wanted to post.

http://www.timesonline.co.uk/newspaper/0,,2769-1268494,00.html

FINANCIAL institutions would have little or no interest in a private placement of Aer Lingus shares, according to Goldman Sachs, the international bank advising on the future of the flag carrier.

The bank has told the government that, although the state airline urgently needs access to capital, any privatisation must be by way of flotation.

But best of all:

During the discussions it was pointed out that had Aer Lingus been a private firm at the time of the 9/11 attacks it would probably have pulled most of its transatlantic flights. This would have made commercial sense but would have been very damaging for Ireland.

Hmmm, maybe there's a bit of truth to the argument put forward on this thread that Ireland's strategic interests would suffer without a state-owned Aer Lingus.

sliabh

I don't understand why AL would have pulled it's trans atlantic flights? Some other airlines reduced the numbers as passenger numbers dipped, but no one (afaik) ended them so why would AL have done so?

therecklessone

My understanding of the situation was that EI made their money from business class seats on their transatlantic routes. Bookings for business fell sharply (and in my opinion well before Sept 11, but thats for another thread), thus leading to a loss for the airline.

They did drop two services at the time (Washington and IIRC Belfast-Shannon-New York across the ocean), and I gather the temptation would have been there to drop more if in private hands.

secret_squirrel

therecklessone wrote:

They did drop two services at the time (Washington and IIRC Belfast-Shannon-New York across the ocean), and I gather the temptation would have been there to drop more if in private hands.

Thats complete speculation...if thats the quality of advice the Govt are getting they should sack them now.

The fact is that storing an aircraft costs a signficant fraction of cost of continuing to operate that aircraft so its not really cost effective to take more than a couple out of service. Its not really worth doing unless you can end the aircrafts lease early as I believe Aer Lingus did. They could only do that with an Aircraft or two. They also needed to keep enough aircraft for when the market turned around.

SkepticOne

I voted for privatisation. In the 70's and 80's, despite state ownership, it proved that it could comprehensively screw the flying public and take full advantage of monopoly or cartel conditions. Now, with competition from BM and Ryanair and others, prices have come down, but only because of this competition; not because the state made it act in its customers' interests, but because if it did not, it would go bust or require massive subsidy to stay afloat.

secret_squirrel

SkepticOne wrote:

not because the state made it act in its customers' interests,

There are your key words - unless told otherwise a company will attempt to make money anyway it can. Blame the state and our politicians for ripping us off not the company. By definition any company that makes excessive profits can be accused of ripping off their customers - and since Ryan Air are making huge profits - they must be ripping off their customers?

arcadegame2004

By definition any company that makes excessive profits can be accused of ripping off their customers - and since Ryan Air are making huge profits - they must be ripping off their customers?

So a company has to be making a loss to be providing good value for money? I disagree!

Provided the regulators break up existing monopolies and block anti-competitive mergers as well as cartels, I believe that a company charging outrageous prices will lose customers to commercial rivals, forcing it ultimately to lower prices again or find its market-share and profits decimated.

Of course, when you have a monopoly (like ESB, Bord Gais and others) that is allowed to maintain its dominant market-position, the company has no incentive to improve the quality of its products and/or services. Why? Because the customer has nowhere else to run to.

In Aer Lingus's case. I still feel that a privatisation is a good thing. It would compensate the Irish taxpyer (via the proceeds of the sale) for all the cash thrown down the Aer Lingus sink over the years.

secret_squirrel

arcadegame2004 wrote:

So a company has to be making a loss to be providing good value for money? I disagree!

So do I - I wasnt talking about any company having to make a loss, I was just making the point that by definition any company making huge profits is ripping off their customers - since by lowering their prices they could still make a decent profit AND provide even better value for money.

I would also contend that up until they went the low fares route Aer Lingus charged the going rate for a flight on a full service carrier. They were no better or worse than BA or BMI.

I think we already established that Aer Lingus have never been in a monopoly situation so none of that part of your reply applies.

secret_squirrel

Typedef wrote:

Can anybody offer any tangable proof that profits from Aer Linugs go back to the the coffers of the State?

This can be checked against the Aer Lingus yearly accounts on their website. There is a statement to the effect of 'no dividend will be paid this year'.

Presumably its up to the shareholder (the Govt) as to whether it insists on a dividend or not. The Govt could easily cream off 10-15% each year without adversely affecting Aer Lingus' financial position I reckon.

SkepticOne

secret_squirrel wrote:

There are your key words - unless told otherwise a company will attempt to make money anyway it can. Blame the state and our politicians for ripping us off not the company. By definition any company that makes excessive profits can be accused of ripping off their customers - and since Ryan Air are making huge profits - they must be ripping off their customers?

However it needs to be remembered that these huge profits are a result of Ryan Air undercutting these "full service" airlines. They realised that lots people want to fly cheaply and catered for them. If it had been left to Aer Lingus and BA dominating the Dublin-London route we'd still be paying upwards of 300 euros for a third class seat and that would be even more of a rip off even if those companies managed to fully justify their costs to their respective owners. Sure in those circumstance I can blame the state and our politicians but that is little consolation. I would rather be "ripped off" by a low fairs airline than pay those prices.

This is the problem with state ownership. There is little incentive for the government to change the status quo as this undermines their investment. In the case of aviation, liberalisation was forced on Ireland. And what government wanted to take on the unions that such change might have involved?

I have to agree with other posters here, though. The situation for unionised employees in Aer Lingus was far better in the old days. It was just the paying public that suffered with the vast majority getting the boat rather than flying due to the cost.

MadsL

AG2004 wrote:

In Aer Lingus's case. I still feel that a privatisation is a good thing. It would compensate the Irish taxpyer (via the proceeds of the sale) for all the cash thrown down the Aer Lingus sink over the years.

Just like the privatisation of eircom compensated the Irish taxpayer for all the money invested in telecoms infrastructure over the years...

:rolleyes:

sliabh

MadsL wrote:

Just like the privatisation of eircom compensated the Irish taxpayer for all the money invested in telecoms infrastructure over the years...

I will let you in on a little secret. There was bugger all invested in the consumer infrastructure even when Telecom Eireann the state owned telco was running things. This is why I can't even get decent dial up internet access in Ranelagh let alone broadband.

And I have first hand experience of the same thing from working as a contractor in NTL that RTE deliberately chose not to invest in the network there as well. Which is why (unlike pretty much the rest of the world) you can't get broadband over coax across much of their network.

However as commercial companies, both now have an imperative to plow this investment in. If they don't then someone else will provide those services and their business will suffer (how many companies like Irish broadband are out there now looking for your business)

When they were state owned and there was no problem as there was no competition from third parties and there were sure they wouldn't compete with each other either.

MadsL

I will let you in on a little secret

And I'll let you in on a secret, that little rolleyes thing...it means I was being sarcastic...


/me goes looking for the <sarcastic> tags I left lying around somewhere in here...

sliabh

MadsL wrote:

And I'll let you in on a secret, that little rolleyes thing...it means I was being sarcastic...

I know that. And I don't think it's any secret that the consumer communications infrastructure in Ireland these days stinks from lack of investment.

The dogs in the street will even tell you they don't feel safe pissing up against the telegraph poles in Ireland