Who is Right: O Leary or Coughlan?

Foolish Penny

Aer Lingus is 29.4% owned by Ryanair and 25.4% owned by the Government. This tots up to 54.8% controlling ownership. Therefore would it not be relatively straight forward for Ryanair+the Government (inc. DAA) to force AerLingus to vacate? That is if it's what the government wants, which is not at all clear.

Joey the lips

Foolish Penny wrote: »

Aer Lingus is 29.4% owned by Ryanair and 25.4% owned by the Government. This tots up to 54.8% controlling ownership. Therefore would it not be relatively straight forward for Ryanair+the Government (inc. DAA) to force AerLingus to vacate? That is if it's what the government wants, which is not at all clear.

Thats an interesting point actually.... But how would the stock market react to the govt and ryan air effectivly attacking the company they have shares in? How would investors in aer lingus look at this.

Is there a chance that this is part of the ploy.... Drive down the value of aer lingus shares encouageing the public to sell them making ryanair a bigger share holder....

dixiefly

Foolish Penny wrote: »

Aer Lingus is 29.4% owned by Ryanair and 25.4% owned by the Government. This tots up to 54.8% controlling ownership. Therefore would it not be relatively straight forward for Ryanair+the Government (inc. DAA) to force AerLingus to vacate? That is if it's what the government wants, which is not at all clear.

I dont think it is clear to themselves.

No coherent policy. As someone said earlier this transcends several departments but Coughlan & Dempsey mostly.

Our government seem to be so tied up in the legalities (and possibly personalities) of this and other issues that they seem helpless and unable to act.

Brian Cowan has also been essetially sleepwalking through the recession, no evidence of him taking a leadership role on issues and it is this lethargy that will result in the aircraft maintenance jobs leaving Dublin forever.

The oppossition need to nail Coughlan on the question regarding Ryanair making the original offer and why this was not acted upon.

Sesshoumaru

Trotter wrote: »

Is this as big as I think it is?? This is deal breaker stuff surely between FF and the Greens. Is Hangar 6 not in Sargent's back yard?

Correct me if Im wrong, but would this not indicate that those 500 jobs where there for the taking and the government indirectly turned them down because of their relationship with O'Leary??

http://www.ryanair.com/en/news/ryanair-s-proof-of-its-maintenance-only-plan-for-hangar-6

Looks big to me! It seems Ryanair were definitely in there first with the biggest offer of jobs on the table. I was reading some other news about this and I noticed this

http://www.independent.ie/national-news/daa-hits-out-at-kennys-claims-in-ryanair-row-2072714.html

But Mr Collier, who earned a total package of €638,000 last year

Am I the only one who thinks that is crazy money to pay someone to run the DAA?

P. Breathnach

Sesshoumaru wrote: »

... Am I the only one who thinks that is crazy money to pay someone to run the DAA?

I suspect most of it is compensation for having to deal with Michael O'Leary.

Sesshoumaru

P. Breathnach wrote: »

I suspect most of it is compensation for having to deal with Michael O'Leary.

Do you think even having to deal with MOL justifies a salary at that level?

Anyway he doesn't have to deal with MOL, because MOL won't deal with him!

AlekSmart

But Mr Collier, who earned a total package of €638,000 last year

That`s only his Aer Lingus money,remember he also has the "Nice Little AIB earner too.....€3,000 per board meeting" arduous stuff but someone`s got to do it I suppose.

I`m still dubious concerning the Aer Lingus Hangar 6 Lease.
many posters here appear to be concerned at Aer Lingus being "forced" to vacate the lease.

I`m of the belief that the Aer Lingus were swiftly "encouraged" to occupy Hangar 6 at any cost just to head off the Ryanair bid,which we now know predated (by quite some time) its (AL`s) sudden desire to expand its maintenance activities.

I would like to see any Business Plan which Aer Lingus have for Hangar 6,which is a facility that demands constant use if it`s not to become a drain on resources of itself.

The Line Maintenance requirement of a 40 strong fleet simply does not compare to the Heavy Maintenance requirement of a 220 strong fleet,this is a given and understood VERY clearly by those who were in the business...why is it taking SO long for this basic unanswered question to be addressed by the Authorities ?

johngalway

AlekSmart wrote: »

why is it taking SO long for this basic unanswered question to be addressed by the Authorities ?

Because they hate MOL and want him to go away, but they can't say it publicly. AL have already admitted they can be moved from the hangar. RA say they want the hangar for the reasons they've outlined. "Others" say RA have alterior motives, well why not stipulate in the contract that any lease of hangar 6 is valid for the use outlined and not as a RA terminal.

AlekSmart

http://www.independent.ie/national-news/daa-wont-reveal-price-paid-for-hangar-ryanair-valued-at-836413m-2073512.html

It seems that in time-honoured Irish Administrative fashion we are seeing the slowest of drip-feeds in relation to this topic.

Some pertinent revelations from the above link:

Aer Lingus signed a 20-year lease on Hangar 6 at Dublin Airport last Christmas Eve although it did not promise any new jobs, bar keeping on 96 former SR Technics workers already engaged in its line maintenance operation.

Last summer, Ryanair offered the Industrial Development Agency (IDA) over €13m for the lease and €200,000 a year rent to set up a heavy maintenance base employing 500 engineers when SR Technics closed with the loss of 1,135 jobs. The offer was not taken up.

And a rather apposite direct quote from M O`L ....

"What rights does Aer Lingus have? If it does have rights to the hangar, why did the DAA step in and buy the leasehold from SR Technics in the first place? Why did Aer Lingus not buy it directly from SRT? If there were rights, they couldn't have sold the freehold."

He claimed a "sweetheart" deal was done with Aer Lingus.

I would very much hope that this issue is`nt allowed to wither and die,with the media losing interest and heading for more meaty Premier League stuff.

This thing STINKS and has the grubby paw prints of Governmental mismanagement all over it.
Mary Coughlan is just the patsy here,as one can be very certain that this issue would have needed Cabintet discussion,most likely off-the-record or in Buswells.

Like it or not,Ryanair found themselves in direct competition with an executive agency which was prepared to move as many goalposts as necessary to frustrate any further growth of Ryanair.

There is,I`m afraid, a LOT more at the base of this thing and many senior politicians,DAA and IDA personages will be feeling quite uncomfortable if this is not put to bed soon.

Today`s revelations concerning the unusual direct Political involvement in the Dublin Dockland Development Authority affair may well give a foretaste of the level of "interference" which may yet emerge out of the Hangar 6 fiasco.

dan_d

I still think that if Coughlan gives in to MOL on this one, she's a bigger idiot than I give her credit for, on the basis that she'd be setting a dangerous precedent - particularly when it comes to dealing with him. He has not guaranteed he'd give the jobs to ex-SRT workers. Not that he has to, but just a point.

And Ryanair are well-known for not being easy to deal with on the maintenance side aswell.Their saying that they can't deal with the DAA doesn't carry much weight, since there's not many people Ryanair can deal with.

BaZmO*

dan_d wrote: »

....on the basis that she'd be setting a dangerous precedent...

That precedent being that they are admitting they were wrong?

bmaxi

I'm amazed at how quiet the opposition have been. Have they expended all their energy hanging WOD out to dry? I would have though Gilmore and Kenny would be feasting for days, even weeks on this but so far most of the mutterings of discontent seem to be coming from FF TDs.

ressem

According to O'Leary, Aer Lingus are renting at a price of €3.5 million a year, but Ryanair wants to pay €200,000?

http://www.independent.ie/national-news/tanaiste-saw-ryanair-deal-long-before-srt-closed-2072821.html

"How did Aer Lingus manage to win a hangar when they've put no maintenance business in it and there's no new jobs in the hangar?

"Aer Lingus are losing €100m a year and they're about to make 900 people redundant. Why are they wasting €3.5m a year renting an empty hangar? It's remarkable," he said.

Why would the DAA look favourably on this, especially if Ryanair hope to move their current rented office-space to the offices attached to the hanger?
You could probably make €200K renting out the spare car park spaces alongside.

So I don't think that the muttering looking for a business plan was ridiculous as the DAA would end up having to be compensated by the IDA as I see it. in addition to cost of moving AL out and the half-priced property rates requested.
A commitment to the breakdown of jobs created as opposed to any that might be transferred would be preferred.

gandalf

ressem weren't Ryanair going to pay €13.3 million for the lease and then €200,000 per year? Did Aer Lingus pay a sum of that amount ?

Trotter

Does anyone else get the impression that this was too much of a fast burner and the issue is starting to fizzle out?

I thought this one would be taking the headlines all week.

expectationlost

why didn't we hear about the M'OL ryanair offer at the time SRT was closing?

A Dub in Glasgo

They were probably still in negotiation with Boeing about replacing planes rather than announcing heavy maintenance and overhaul of their existing fleet

thebman

expectationlost wrote: »

why didn't we hear about the M'OL ryanair offer at the time SRT was closing?

It would be unusual for a company to publicly announce everything it does.

I imagine they were involved with boeing and making headlines with that and wanted to keep any plans for heavy maintenance private as if boeing deal fell through they could always get job publicity then.

dixiefly

Latest on this ....

Staff moving to Hanger 6

Meanwhile, the hangar at Dublin Airport that has recently been at the centre of a controversy over jobs is to house a new centralised staff operations centre for Aer Lingus.

Hangar 6 is already home to Aer Lingus' maintenance division and has space for more than 400 staff in modern offices.

By the middle of this year, the hangar will accommodate some 350 staff, including a new centralised operations centre comprising maintenance stores, technical stores, operations control, flight operations and cabin operations.

A spokesman for the airline said one or two pieces of real estate that Aer Lingus currently occupies are coming to the end of their leases, including its technical building, so staff there are being moved to the hangar.

Aer Lingus obviously saw efficiency benefits just like Ryanair did. Fair enough if AL were first in and made a legitimate deal with DAA. However, if it is proven that there were ulterior motives in DAA / Dept with a view to keeping Ryanair out and thus sacrificing 500 jobs (which would be more sustainable than many that come here) then we would be dealing with a scandal far outweighing the Willie O'Dea & Trevor Sargant ones put together.

P. Breathnach

Back of envelope time:

Assuming (1) O'Leary is right in saying that Aer Lingus are paying €3.5m pa on a 20-year lease (2) there are no rent increases in that time, and (3) a discount on future income of 4% pa, then the value to DAA of the deal with Aer Lingus is just below €49m. If, as reported elsewhere, Aer Lingus is paying €2.25m, then the discounted value of the lease is €31.3m.

O'Leary's offer is a one-off payment of €13.3m (which would go to DAA) plus €200,000 pa which would not go to DAA -- worth, in total, just over €16m.

In addition, O'Leary demands a 50% rates remission in perpetuity. With the current rates on the facility being €700,000 pa, that's a pretty big burden to shift from Ryanair to other ratepayers. Assuming that rates increase at 4% pa, you could value that concession at €7m over a 20-year period.

That reduces the effective value to the state of O'Leary's offer to about €9m.

gandalf

Did you factor into your envelop at the time of the offer that Aer Lingus were only re-employing approx 90 workers and Ryanair would have been re-employing 500......

P. Breathnach

deadtiger wrote: »

Did you factor into your envelop at the time of the offer that Aer Lingus were only re-employing approx 90 workers and Ryanair would have been re-employing 500......

Had I done so, I would have said so.

gandalf

P. Breathnach wrote: »

Had I done so, I would have said so.

Ah ok so we need to add to your equations the additional tax take and the reduction in dole monies and rebates to those staff that could have still had their jobs with the Ryanair offer....

P. Breathnach

deadtiger wrote: »

Ah ok so we need to add to your equations the additional tax take and the reduction in dole monies and rebates to those staff that could have still had their jobs with the Ryanair offer....

Be my guest.

gandalf

P. Breathnach wrote: »

Be my guest.

You're the one doing the calculations my friend just ensuring people realise that you haven't factored everything in.

BTW I see Aer Lingus are threatening more redundancies today. Sure looks like Coughlan, the Government and the DAA have backed the right horse eh

P. Breathnach

deadtiger wrote: »

You're the one doing the calculations my friend just ensuring people realise that you haven't factored everything in...

Yeah, right. You want to make arguments without any burden of evidence.

I don't see an unconditional (or even a conditional) offer of 500 jobs; I don't see details of what those jobs might be, or how well they might be paid. If you want this argument to be adjudicated on the basis that there are to be 500 jobs, then I think it is incumbent on you to put figures on it.

[A small correction to my earlier post: Ryanair acually proposed to pay €13.66m as two-thirds of €20m, which suggests to me that their back-of-envelope calculations are rather casually done.]

gandalf

Oh another correction for you, the Government own 25% of Aer Lingus so effectively 25% of the figure you enveloped out there is an amount they would be paying themselves

Riskymove

deadtiger wrote: »

Oh another correction for you, the Government own 25% of Aer Lingus so effectively 25% of the figure you enveloped out there is an amount they would be paying themselves

? what?

the government is a shareholder, just like Ryanair, they dont pay Aer Lingus costs

gandalf

Riskymove wrote: »

? what?

the government is a shareholder, just like Ryanair, they dont pay Aer Lingus costs

LOL whoops guess thats why I amn't an accountant.

gandalf

Ok then a few figures concerning the 410 additional employees from SRT who would have been allegedly saved by the Ryanair deal over the Aer Lingus one.

If the 410 Ex-SRT Employees are on the dole for a year @ 10k (rounded down) cost to the taxpayer per year is 4.1 million

Taking the average industrial wage of 35k as our benchmark

410 additional employees would pay 3.2 million in direct taxes, prsi & levies. (*taken from the Deloitte Tax Calculator online)

They would also have a combined income after tax of 11 million after tax per year.

I'm using the average industrial wage of around 35k to illustrate this. I would assume the majority of the SRT jobs would have been skilled engineering positions so those figures would be higher. You can see quite clearly that the Ryanair offer should have been snapped up if it was genuine.

bijapos

deadtiger wrote: »

if it was genuine.

Which is where I have my doubts. If O'Leary wanted to give 500 jobs why didn't he raise this issue last August or September, public opinion would definitley have been on his side and Aer Lingus had not moved into Hanger 6.

He still has 300 jobs to hand out, other hangers are suitable for heavy maintenance, why doesn't he use them?

He hasn't managed to answer either of these questions over the last couple of weeks, hope he adresses tham at the Oireachtas hearing this afternoon.

IrishTonyO

bijapos wrote: »

Which is where I have my doubts. If O'Leary wanted to give 500 jobs why didn't he raise this issue last August or September, public opinion would definitley have been on his side and Aer Lingus had not moved into Hanger 6.

He still has 300 jobs to hand out, other hangers are suitable for heavy maintenance, why doesn't he use them?

He hasn't managed to answer either of these questions over the last couple of weeks, hope he adresses tham at the Oireachtas hearing this afternoon.

Read the whole thread he first sent letters regarding this Aug/Sept last year

http://www.ryanair.com/doc/news/2010/ryanair-reply-to-tanaiste-13th-Aug-09.pdf

thebman

bijapos wrote: »

Which is where I have my doubts. If O'Leary wanted to give 500 jobs why didn't he raise this issue last August or September, public opinion would definitley have been on his side and Aer Lingus had not moved into Hanger 6.

He still has 300 jobs to hand out, other hangers are suitable for heavy maintenance, why doesn't he use them?

He hasn't managed to answer either of these questions over the last couple of weeks, hope he adresses tham at the Oireachtas hearing this afternoon.

Because he was talking to boeing last September was he not? This was his fall back plan when he couldn't get boeing to cave on costs.

gandalf

Thats why I included if it was geniune. Didn't realise he was in front of a hearing this afternoon. Will keep an eye out for news from that.

bijapos

IrishTonyO wrote: »

Read the whole thread he first sent letters regarding this Aug/Sept last year

http://www.ryanair.com/doc/news/2010/ryanair-reply-to-tanaiste-13th-Aug-09.pdf

This is what I mean, when he was refused why didn't he go to the media then if he suspected DAA-AL interference?

Sesshoumaru

bijapos wrote: »

Which is where I have my doubts. If O'Leary wanted to give 500 jobs why didn't he raise this issue last August or September, public opinion would definitley have been on his side and Aer Lingus had not moved into Hanger 6.

He still has 300 jobs to hand out, other hangers are suitable for heavy maintenance, why doesn't he use them?

He hasn't managed to answer either of these questions over the last couple of weeks, hope he adresses tham at the Oireachtas hearing this afternoon.

http://breakingnews.iol.ie/news/ireland/ryanair-made-airport-jobs-offer-months-before-aer-lingus-deal-447593.html

Ryanair has published correspondence showing it offered to create 500 jobs at Dublin Airport 10 months before a deal was struck with Aer Lingus.

I can't really think of any reason the government didn't snap at this offer, except that they have a huge chip on their collective shoulders when it comes to Ryanair and MOL.

Sesshoumaru

bijapos wrote: »

This is what I mean, when he was refused why didn't he go to the media then if he suspected DAA-AL interference?

Maybe he wanted to give more rope to the government? Maybe he knows Irish people are a bit slow to realise we aren't a rich/wealthy country and that 500 high end jobs are actually worth a lot to a small country like us. This time last year a lot of people were still thinking we were in a temporary blip, I still had friends telling me I should buy a house before the market start rising :rolleyes:

The environment now is very different to what it was 1 year ago!!

IrishTonyO

Michael O'Leary is up in front of the committee at 5.20pm

http://www.rte.ie/live/

IrishTonyO

Michael O'Leary speaking now

http://asx.heanet.ie/oireachtas/committee_1_broadband.asx

AIR-AUSSIE

IrishTonyO wrote: »

Michael O'Leary speaking now

http://asx.heanet.ie/oireachtas/committee_1_broadband.asx

Well that was interesting. Wonder what Aer Lingus' side of the story will be.

IrishTonyO

AIR-AUSSIE wrote: »

Well that was interesting. Wonder what Aer Lingus' side of the story will be.

I can not believe the way some of the TD's were treating Michael O'Leary, especially Fianna Fail ones. Treating him like they have a right to these jobs on their conditions not his. MOL should just tell them to go to hell. They should be bending over backwards to get the jobs rather than criticising him. He is the one with the jobs and he is entitled to say what the conditions are.

Trotter

These politicians are living in another world! This guy comes with 300 jobs, and they're criticising him!

He has a business to run. He holds the cards. He is king right now. Love him or hate him, he's got the jobs, and we want them.

Mary Coughlan is saying she wont turf out Aer Lingus because it wouldnt be fair really. Tell that to the ex SRT workers.
She didnt even bother her barney to turn up.

Micheal O'Leary has every right now to walk away. In the real world, 2 other airports/governments are gagging for these jobs. He's doing us a favour by giving 2 weeks to the Irish government.

If he wants Hangar 6 painted pink with yellow and blue stripes.. Paint it!! Its empty!!

Anyone would think the main work for this crowd was to attract companies in.. He's handing us JOBS!! Take his hand off!!!!!!!

IrishTonyO

Anyone notice the difference in attitude of Tommy Broughan when questioning Michael O'Leary than when questioning Aer Lingus. And he is so called a labour party, the party of the workers??????
If he can't keep his personal biases at bay he has no place on committees like these.

AIR-AUSSIE

IrishTonyO wrote: »

Anyone notice the difference in attitude of Tommy Broughan when questioning Michael O'Leary than when questioning Aer Lingus. And he is so called a labour party, the party of the workers??????
If he can't keep his personal biases at bay he has no place on committees like these.

apparently it s being used though by aer lingus at night. It seems the ff Tds think that because MOL is Irish he should give the jobs here. Wake up he is a business man. Ff tds have worried me for a while, now their incompetency s just takes the biscuit.

Trotter

AIR-AUSSIE wrote: »

apparently it s being used though by aer lingus at night. It seems the ff Tds think that because MOL is Irish he should give the jobs here. Wake up he is a business man. Ff tds have worried me for a while, now their incompetency s just takes the biscuit.

I may be wrong here, but arent many of the long haul aircraft scheduled to be in the air during the night?

bryaner

Trotter wrote: »

I may be wrong here, but arent many of the long haul aircraft scheduled to be in the air during the night?

From Dublin(DUB) to New York(JFK)

Flight No Depart Arrive Days of Service Valid From Valid To
EI0105 1030 1310 M T W T F S S 17-Feb-2010 13-Mar-2010
EI0107 1210 1615 - T - T - S - 17-Feb-2010 13-Mar-2010
EI0109 1530 1810 M - W - F - S 17-Feb-2010 23-Feb-2010
1530 1810 M - W - F - S 25-Feb-2010 04-Mar-2010


From Dublin(DUB) to Orlando Orlando(MCO)

Flight No Depart Arrive Days of Service Valid From Valid To
EI0121 1210 1640 - T - T - S - 17-Feb-2010 13-Mar-2010

Not that I care just had a quick nosey

AIR-AUSSIE

Trotter wrote: »

I may be wrong here, but arent many of the long haul aircraft scheduled to be in the air during the night?

From what I gathered it's used for short haul also. That roughly six of their fleet are in it each night. That the photo taken was not representative of what actually goes on. Although y aer lingus didn't say this a week ago I don't know.

Where are you gettng your info from (mine is only from what the aer lingus CEO said in the commitee).

Trotter

I'm just thinking from friends and family who would fly Aer Lingus to the States. I've often heard that they go overnight. Like I said, I may be wrong.

donkey balls

Trotter wrote: »

I'm just thinking from friends and family who would fly Aer Lingus to the States. I've often heard that they go overnight. Like I said, I may be wrong.

flights that originate in the usa going to europe most of them depart at night time in order to arrive in europe the next morning/afternoon due to the time difference.

gandalf

They fly back from the States overnight.

Here are the ones that are scheduled for tomorrow with their arrival time in Dublin Airport.

Boston Aer Lingus EI132 25-02-2010 07:50
New York Aer Lingus EI108 25-02-2010 08:25
Chicago Aer Lingus EI124 25-02-2010 08:25