Ryanair to be Forced to Sell 1/2 it's Stake in Aer Lingus

Tenger

Technoprisoner wrote: »

there will be some cheap shares to pick up now that ryanair has to sell....also with aerlingus needing to inject in 110 million for the pension fund the share price will probably drop again. surely that cant be good for them as a business

Actually this could see the price increase. Part of the proposed deal (if you read the whole article) is that staff wage costs will be capped until 2017. This gives financial security to the company and makes it more attractive to investors...how may have been wary of investing before due to uncertainty of the impact of the FR shareholding and/or takeover bids.


I believe the EI pilots hold less than 4% of the company. Overall staff share holding was 15%....that may well have been reduced by now.


And I cannot see re-nationalisation being good for EI. Only as a private company can EI react to market demands rather than parish pump politics.

Suasdaguna1

I have heard the usual tripe the share price will sink with FR forced to sell. I think the opposite with clarity on the horizon re FRs holding, the pension issue cloud not necesssarily resolved but parked, staff salaries fixed till 2017 and a commitment from business's to support a SFO operation plus proper winter utilization of the 330s re leases with flight crew.....you could see the share price fly (pardon the pun).

Feck, they are up 5.5% this morn......:)

brandon_flowers

Shamrock231 wrote: »

Just my €0.02.

Nimrod 7 wrote: »

Lads..

I say we all just chip in and buy Ryanair's 30% and the gubbermint's 25%

No more of this take over and who's buying more shares crap

Looks more like a collection for Eircom shares!

Mikehaw

DubDani wrote: »

If Etihad really wanted to buy a big Stake in Aer Lingus they could always use their European "Partner" Air Berlin to make the purchase, and effectively get around that EU/Non-EU stake holding limitation.

That doesn't make sense. They can only own 49% of air Berlin too so they don't control the board of that airline

Peregrine

Shamrock231 wrote: »

I'm in, I've a fiver, a couple of coins, and a prize bond, think that'll cut it?

Seriously though, don't the Aer Lingus Pilots own a 12% chunk of EI, could we see them expanding their share of the company? Now that'd be something very interesting, a co-operative airline owned and run by its staff... :pac:

I think it was 15% back in 2007 but back then Ryanair only owned 20%. According to this, it was 12.5% in 2010.

It'd be very interesting indeed but would it work?

kona

homerjay2005 wrote: »

whats there to be proud of with Aer Lingus?

seeing as Ryanair is much more successful, profitable and anything else you can imagine, why are you not proud of them?

For a time the Germans said the same about hitler

DubDani

Mikehaw wrote: »

That doesn't make sense. They can only own 49% of air Berlin too so they don't control the board of that airline

The own 30%, but pumped a lot of additional money into it, and are effectively running the show at Air Berlin.

Tenger

Mikehaw wrote: »

That doesn't make sense. They can only own 49% of air Berlin too so they don't control the board of that airline

They don't need to legally own the EU company to be running the show. If a European company decide to hitch their wagon to the Ethiad then they will do as instructed. EI could decide to follow the Air Berlin model.


As regards the LHR slots.....they belong to EI and in theory any future owner of EI could sell off these slots if they wanted. Obvioulsy EI as an airline would want to hold those prime arrival/departure slots. But is an asset stripping investment company bought EI (in the same manner that FR tried to) then they could sell off the EI 'family silver' to raise funds.

A few years ago FR promised to lodge a E20M bond with the Irish Govt, which would be lost if they ever sold the EI LHR slots (This was during their 2nd takeover attempt) Personally I am sure FR would have raised more than E20M by selling them off.

Personally I feel the LHR slots have lost their value over the last 5 years as we have seen the rise in the connectivity of the Mid East (Dubai and Abu Dhabi)

rainbowdash

hardCopy wrote: »

Would it really be possible for another carrier to buy EI for their Heathrow slots, seeing as they use a dedicated Irish/Domestic terminal?

I'd like an answer to this question too.

All the other "domestic" major cities like Manchester, Cardiff, Glasgow etc. are connected to London by motorway anyway, except Dublin, Cork and Belfast.

Only Ireland has the sea in the way, so I would imagine demand for flights is much higher and with no rail / road competition profit margin would be stronger too.

So regardless of what happens the Aer Lingus slots some airline will want the lucrative Irish routes, more so than Manchester - London for example.


Even as things stand British Midland and now BA have always run Dublin -Heathrow flights.


Shannon might lose its slots but when the government owned 25% of Aer Lingus they did nothing to save to slots last time they got snipped.

asdfg!

You might think it's a good idea for Ryanair to be forced to give up it's interest in Aer Lingus. But it seems to me that once Ryanair's bid to take it over is gone. Then the gloves will come off and they'll compete very aggressively against Aer Lingus everywhere they can. It's no accident that both airlines dominate the UK - Ireland routes. Ryanair has seen off everyone who tried to move in. Aer Lingus will become just another rival to be driven off the field.

As for the nationalisation of Aer Lingus, you cannot be serious? It's impossible anyway. I wish people would get over this notion that Aer Lingus is somehow a vital part of Ireland's heritage and all that. It's a company, a business no more no less. Not a national park!

seanmacc

asdfg! wrote: »

As for the nationalisation of Aer Lingus, you cannot be serious? It's impossible anyway. I wish people would get over this notion that Aer Lingus is somehow a vital part of Ireland's heritage and all that. It's a company, a business no more no less. Not a national park!

It is impossible unfortunately due to the Nice Treaty our government conned and blackmailed us into voting for which had commitments for all European countries to privatize industries.

But this is a small Island nation that needs strategic links to other countries. One of the most important at the moment is Dubai. Should EY decide to pull out of Ireland and deploy their planes elsewhere where they are more profitable several of our multi nationals will suffer, particularly the pharmaceutical industry. That drives up costs as then their products have to go to Heathrow. A national airline can realize this issue and have the problem sorted very quickly. A National Airline just has to be run like a business and not like the civil service and act in the best interest of the country and not just for profit.

eusap

I personally would not like to see Etihad buying more AL shares as on the global scale of things they are only after its assets, Heathrow is at 98% capacity so although it is becoming less of vital link to Ireland with so many direct east and west flights to other airlines the slots are becoming more valuable.

But what is to stop a director of Etihad creating an EU based company and buying the shares and signing a codeshare with Etihad or am i being too simple in my thinking?

Victor

seanmacc wrote: »

I reckon the state should buy back the stake.

How would we afford it?

If anything its a good investment.

Really, it has only made about €100m in the last 14 years. It wouldn't cover the cost of borrowing.

seanmacc wrote: »

But this is a small Island nation that needs strategic links to other countries. One of the most important at the moment is Dubai. Should EY decide to pull out of Ireland and deploy their planes elsewhere where they are more profitable several of our multi nationals will suffer, particularly the pharmaceutical industry. That drives up costs as then their products have to go to Heathrow.

While Heathrow is important, Dublin Airport has 169 routes with 55 airlines - 11 direct connections to North America (USA is our second biggest trading partner) and at least 5 Dutch / Belgian airports (Belgium is our third biggest trading partner), as well as other European hubs like Paris and Frankfurt. The other airports, especially Belfast*, probably have a few other connections. Heathrow isn't a monopoly.

eusap wrote: »

But what is to stop a director of Etihad creating an EU based company and buying the shares and signing a codeshare with Etihad or am i being too simple in my thinking?

Is that director an EU citizen?


* Cork has a direct flight to Girona and Reus, I think Dublin does Reus and Barcelona. Shannon has nothing extra, I doubt the regional airports add anything.

IngazZagni

I don't think any of the Middle East carriers want to create a company in the EU. Why are the Middle East carriers so successful? It comes down to one thing. Tax. Or should I say the lack of tax these companies pay. They don't want to expose themselves and be liable in any way to EU tax. Does any Middle Eastern airline have a base in Europe? No and it's precisely down to tax issues.

As for this nationalising Aer Lingus talk. I'm sorry but what a joke that thought is. If Aer Lingus had not privatised I'm sure it would be at the very least in financial woes now and based on that would probably be in control of Ryanair. The authorities rejected the takeover in part because Aer Lingus is profit making. If it was a loss making airline on the verge the merger would have taken place I'm sure.
It's all very well to say we can nationalise something and run it like a business. In reality that wouldn't happen. The company would get fat and everything that goes with the public sector would mean it couldn't compete in the real world.

Tenger

Suasdaguna1 wrote: »

I have heard the usual tripe the share price will sink with FR forced to sell. I think the opposite with clarity on the horizon re FRs holding, the pension issue cloud not necesssarily resolved but parked, staff salaries fixed till 2017 and a commitment from business's to support a SFO operation plus proper winter utilization of the 330s re leases with flight crew.....you could see the share price fly (pardon the pun).......

Share's closed at 155 on Friday....up to 163 already today.
Highest its been for at least a year. Supports the EI argument that the FR holding was negatively influencing its share value.

Shamrock231

Highest it's been since September 2008!!! :eek::D

Jamie2k9

asdfg! wrote: »

You might think it's a good idea for Ryanair to be forced to give up it's interest in Aer Lingus. But it seems to me that once Ryanair's bid to take it over is gone. Then the gloves will come off and they'll compete very aggressively against Aer Lingus everywhere they can. It's no accident that both airlines dominate the UK - Ireland routes. Ryanair has seen off everyone who tried to move in. Aer Lingus will become just another rival to be driven off the field.

As for the nationalisation of Aer Lingus, you cannot be serious? It's impossible anyway. I wish people would get over this notion that Aer Lingus is somehow a vital part of Ireland's heritage and all that. It's a company, a business no more no less. Not a national park!

When it comes to the UK routes Aer Lingus have driven Ryanair off a few and the regional operation has helped to.

But this is a small Island nation that needs strategic links to other countries. One of the most important at the moment is Dubai. Should EY decide to pull out of Ireland and deploy their planes elsewhere where they are more profitable several of our multi nationals will suffer, particularly the pharmaceutical industry. That drives up costs as then their products have to go to Heathrow. A national airline can realize this issue and have the problem sorted very quickly. A National Airline just has to be run like a business and not like the civil service and act in the best interest of the country and not just for profit.

Come on, DUB is one of there best preforming routes it has taken a hit since EK moved onto the scene but its still top preforming for them. Ryanair will pull out of Ireland before Etihad will if you ask me.

Even as things stand British Midland and now BA have always run Dublin -Heathrow flights.

BA serving DUB at the minute is called slot sitting and its something that BA might come to regret in the future.

Shamrock231

Jamie2k9 wrote: »

When it comes to the UK routes Aer Lingus have driven Ryanair off a few and the regional operation has helped to.


BA serving DUB at the minute is called slot sitting and its something that BA might come to regret in the future.

Indeed, EIR have given Ryanair a run for their money on routes where a 737-800 is just too much airplane for them... :rolleyes::D

Out of interest on your last point though, I'm well aware that they're slot sitting, but what are the drawbacks that you see for BA, off the top of my head I can't see any, but I'm probably missing something, would you mind elaborating on that please?

Jamie2k9

Shamrock231 wrote: »

Indeed, EIR have given Ryanair a run for their money on routes where a 737-800 is just too much airplane for them... :rolleyes::D

Out of interest on your last point though, I'm well aware that they're slot sitting, but what are the drawbacks that you see for BA, off the top of my head I can't see any, but I'm probably missing something, would you mind elaborating on that please?

Just how much are they going to push EI keeping 8 daily DUB going when EI feed them a lot. EI could put an end to the agreement with BA and continue with the other carriers and even add Virgin to replace BA. Lets say in around 6 years do you think that BA will be serving DUB 8 times daily?

The question is how long will EI keep up there current agreement with BA before they have enough and either tell BA cut DUB and let use transfer the traffic or the agreement ends. Now of course EI are still operating a good amount of BA traffic to LHR but it has to be dropping a lot.

Its probably only a matter of time before VS are added anyways.

Shamrock231

Ah, of course, I hadn't thought about the code share, and that is indeed a very plausible option seeing to all the new codeshares that EI has added at LHR in the past year such as Air Canada and SAS... Thanks for that.

andy_g

kona wrote: »

For a time the Germans said the same about hitler

Please leave out the Hitler stuff please.

Or Ze Nazi Mods Vill Ze in to play with ze big veapons ya!

asdfg!

Jamie2k9 wrote: »

When it comes to the UK routes Aer Lingus have driven Ryanair off a few and the regional operation has helped to.

Driven off? I don't think so. You miss my point that Ryanair have no interest in ruthlessly competing with Aer Lingus when they own a significant part of it. Once Ryanair has no financial interest the gloves will come off. Michael O'Leary has no sentimental interest in the former 'national airline'. Neither have the majority of potential passengers.

rainbowdash

Jamie2k9 wrote: »

BA serving DUB at the minute is called slot sitting and its something that BA might come to regret in the future.

Yes but the point is that the slots are to a domestic Heathrow terminal, using medium size jets, so where would BA divert the slots / flights to?

Anyway the point is that regardless of what happens to the Aer Lingus slots there will always be somebody to run Dublin flights to heathrow, so the idea of the slots being a strategic national asset is not really valid.

Dublin and Cork would always have sufficient numbers to attract an operator to run flights to Heathrow, Shannon maybe less so.

Jamie2k9

rainbowdash wrote: »

Yes but the point is that the slots are to a domestic Heathrow terminal, using medium size jets, so where would BA divert the slots / flights to?

Anyway the point is that regardless of what happens to the Aer Lingus slots there will always be somebody to run Dublin flights to heathrow, so the idea of the slots being a strategic national asset is not really valid.

Dublin and Cork would always have sufficient numbers to attract an operator to run flights to Heathrow, Shannon maybe less so.

The slots are for the runway at LHR, through better scheduling you could maximise use of them and jet sizes and terminals don't come into it as BA could sort that out easily.

Tenger

rainbowdash wrote: »

Yes but the point is that the slots are to a domestic Heathrow terminal, using medium size jets, so where would BA divert the slots / flights to?.....

The slots are arrival/departure timings. They do not refer to a particular terminal or aircraft. Now perhaps the current BA timings are not great for ramp space at T5, perhaps BA wants to swop slots with another carrier to utilise the current 8 slot pairs used for DUB-LHR for a more profitable longhaul route.

If a carrier doesn't use its slot it lose's them, hence BA having to operate those 8 per day in order to keep them.

dubdaymo

LOL, I'm willing to bet that, if the situation was reversed (EI with 30% FR), all you true patriots would be highly indignant if the UK Govt. was trying to interfere in an Irish airline's affairs but, to paraphrase Albert Reynolds, there's hypocrisy for yeh,:D

Peregrine

dubdaymo wrote: »

LOL, I'm willing to bet that, if the situation was reversed (EI with 30% FR), all you true patriots would be highly indignant if the UK Govt. was trying to interfere in an Irish airline's affairs but, to paraphrase Albert Reynolds, there's hypocrisy for yeh,:D

I wouldn't really want EI to own a 30% stake in FR either to be honest.

Also EI is an Irish airline that operates routes out of Ireland. Yes, FR is an Irish airline but only a small number of it's routes are from Irish airports. 25-30% of it's traffic is in the UK.

Tenger

dubdaymo wrote: »

LOL, I'm willing to bet that, if the situation was reversed (EI with 30% FR), all you true patriots would be highly indignant if the UK Govt. was trying to interfere in an Irish airline's affairs but, to paraphrase Albert Reynolds, there's hypocrisy for yeh,:D

Well I think that it is strange that it takes a UK office to be able to resolve this situation. The FR shareholding was causing issues for EI as a publicly floated company. Most hostile takeovers are done with in less than 18 months......this ongoing farce has gone on for 6 years.

It shows the lack of corporate legal rulings in this country that it took a foreign govt to deal with it.

Jhcx

Ya why couldnt the Irish gov just said to them sell the stake or get out of the country.

Amirani

Heathrow isn't nearly as important as it once was for Ireland. We have great connectivity options via the likes of CDG, AMS and FRA in Europe, as well as the likes of DXB, AUH, ATL and JFK outside. There's very few places that you can get to from LHR that you can't from any of the others.

LXFlyer

NiallSparky wrote: »

Heathrow isn't nearly as important as it once was for Ireland. We have great connectivity options via the likes of CDG, AMS and FRA in Europe, as well as the likes of DXB, AUH, ATL and JFK outside. There's very few places that you can get to from LHR that you can't from any of the others.

True but none of those have the volume of flights to/from Ireland that Heathrow has, thereby offering far more choice to travellers.

Paris has 8 or 9, Frankfurt has 5 flights a day from Dublin, Amsterdam has also got 5.

Heathrow has 13 flights a day from Dublin alone.

LXFlyer

Tenger wrote: »

Well I think that it is strange that it takes a UK office to be able to resolve this situation. The FR shareholding was causing issues for EI as a publicly floated company. Most hostile takeovers are done with in less than 18 months......this ongoing farce has gone on for 6 years.

It shows the lack of corporate legal rulings in this country that it took a foreign govt to deal with it.

Given that the company is listed on the London stock exchange, this is the perfectly normal course of action.

Peregrine

http://www.rte.ie/news/2013/0527/452988-ryanair-aer-lingus/

Aer Lingus has launched a High Court challenge against a ruling by the Irish Takeover Panel that could allow Ryanair make another bid for the national carrier in August.
The action arises out of Ryanair's failed €694m bid to win control of Aer Lingus.

Seriously? ITP is going to let them make another bid this year?

Time-off Ryanair.

Shamrock231

They should get a minimum of a 5 year ban from trying to takeover EI IMHO...

Peregrine

Shamrock231 wrote: »

They should get a minimum of a 5 year ban from trying to takeover EI IMHO...

Surely after 3 failed takeover bids in 6 years, the Takeover Panel would think something like that is needed. It's a waste of valuable money and resources..

brandon_flowers

Certainly can't blame FR for having another go if they are allowed. Corporate Governance is still in the 60's in Ireland it seems.

rainbowdash

So Aer Lingus are taking a high court challenge against what is probably their biggest shareholder??