IAG bids for Aer Lingus

ted1

Graham wrote: »

Newsflash - we don't have an airline.

Not quite a newsflash, we have a strong voice at the table that looks after the vested interest of the country.
If IAG wants to negotiate a better deal at dublin airport they could pull all transatlantic flights from Dublin and kill the tourist trade. EI currently couldn't do that

Graham

ted1 wrote: »

If IAG wants to negotiate a better deal at dublin airport they could pull all transatlantic flights from Dublin and kill the tourist trade. EI currently couldn't do that

I'm sure if the threat of removing all traffic from Ireland in order to negotiate 'a better deal' were remotely possible, our other slightly more commercially aggressive 'national airline' would have done it.

Top marks for the most extreme whatiffery I've seen on the thread so far though.

LXFlyer

ted1 wrote: »

Do turkeys bit for Christmas ?
Each board member would be in for a nice cash payout if they were taking over. I don't think that we should sell the family silver ware. The country doesn't need the money. It would be like given money to a junkie and will be pissef up againest the wall

That assumes that the members of the board hold shares in the company - which is not necessarily the case in the case of the non-executive directors. That's the only circumstance that they would get a payment.

donvito99

ted1 wrote: »

Not quite a newsflash, we have a strong voice at the table that looks after the vested interest of the country.
If IAG wants to negotiate a better deal at dublin airport they could pull all transatlantic flights from Dublin and kill the tourist trade. EI currently couldn't do that

You don't have a seat to win in Cork, do you?

WheatenBriar

Graham wrote: »

Iberia flights Madrid to LHR were moved to T5.
BA flights LHR - DUB operate from T5. EI flights operate from T3. Pure guesswork to suggest what would happen post any merger.
International J fares are/were rarely much cheaper ex DUB.

+1 for One World

T5 is full
MAD only had a few flights a day to LHR unlike EI and BA currently ex DUB though

Since BA started ex DUB ,their via LHR Ex EU sale fares extended to ex Dub fares,a good few times a year

Currently it's €1349 Dublin to Honolulu in Business class
You can even route it at that price Dub-lcy-JFK-lax-Hnl and be most of the way to being Gold flying on the club Lcy service


That will end as they are no longer competing in the Irish market as much

Graham

WheatenBriar wrote: »

T5 is full
MAD only had a few flights a day to LHR unlike EI and BA currently ex DUB though

Since BA started ex DUB ,their via LHR Ex EU sale fares extended to ex Dub fares,a good few times a year

Currently it's €1349 Dublin to Honolulu in Business class
You can even route it at that price Dub-lcy-JFK-lax-Hnl and be most of the way to being Gold flying on the club Lcy service


That will end as they are no longer competing in the Irish market as much

I count 12 return flights between LHR and MAD for most days this week.

The odd fare sale to a fairly extreme destination doesn't come close to representing the average J fare.

BA will still have to compete with the Gulf carriers, European carriers and US Airlines.

WheatenBriar

Graham wrote: »

I count 12 flights between LHR and MAD for most days this week.

The odd fare sale to a fairly extreme destination doesn't come close to representing the average J fare.

BA will still have to compete with the Gulf carriers, European carriers and US Airlines.

That fare is to all US cities Graham,and all can include club lcy
As well as that some j fares during the year to JFK are regularly as low as 1100!

Ei were their major competition on ex Dub Tatl
Now they will have no need as all will consolidate into the JV with AA
The other Tatl operations have no history of competing realistically

There's no room left in T5 so consolidating IAG Dub LHR into T2 on EI is likely with the BA DUB slots going elsewhere imho

christy c

How is this likely to affect transfer pax to other airlines in LHR? eg Singapore Airlines. Are EI likely to keep whatever agreement they have in place?

Mueller said before that one of their strengths was not being in an alliance because it gave them flexibility, which I agree with. So is joining one world going to hinder them slightly?

WheatenBriar

BA code shares with LH but I'd imagine EI will continue existing agreements, just not renew those that can be oneworld
They will bias increasingly to one world connecting flights especially BA
We'll all be renewing our acquaintance shortly with the infernal connections bus

intellectual dosser

Could an Aer Lingus One World membership bring other airlines into Dublin? For example Qatar, Japan Airlines, Cathay even TAM?

I know the answer is probably "Anything is possible", but any comments on realistically within 24 months of the takeover being completed?

Graham

WheatenBriar wrote: »

That fare is to all US cities Graham,and all can include club lcy
As well as that some j fares during the year to JFK are regularly as low as 1100!

I regularly see sale fares from the US carriers for €999 so there's plenty of competition on the TATL routes.

The only significant route where competition would be reduced is DUB - LHR and even then, there's plenty of competition to other London airports.

WheatenBriar wrote: »

There's no room left in T5 so consolidating IAG Dub LHR into T2 on EI is likely with the BA DUB slots going elsewhere imho

Given BA would end up with 3 major hubs, LHR/MAD/DUB I would be astounded if the DUB flights were not given priority at LHR.

SpaceTime

I have a feeling that IAG/BA didn't buy into EI to shut it down as it hardly competes with BA on any route except Dublin and several others including LHR to Cork are actually already code shared.

WheatenBriar

Graham wrote: »

I regularly see sale fares from the US carriers for €999 so there's plenty of competition on the TATL routes.

Very rare Tbh and in response to one world sales. BA had so many ex Dub sales last year,I met one guy from Atlanta doing business in London who overnighted in Dublin

The only significant route where competition would be reduced is DUB - LHR and even then, there's plenty of competition to other London airports.

I'm talking about long haul though
You are right about the M/E carriers saving some competition

Given BA would end up with 3 major hubs, LHR/MAD/DUB I would be astounded if the DUB flights were not given priority at LHR.

I don't see the financial logic in IAG sending BA planes to Dub when there's more money to be made with those bums on EI seats feeding both the EI Tatls as well as BA to other destinations

Graham

SpaceTime wrote: »

I have a feeling that IAG/BA didn't buy into EI to shut it down as it hardly competes with BA on any route except Dublin and several others including LHR to Cork are actually already code shared.

+1

Lots of the scaremongering appears to forget that IAG run a hub and spoke operation, not a point to point.

It would be a bit daft to start removing the spokes.

Tenger

intellectual dosser wrote: »

Could an Aer Lingus One World membership bring other airlines into Dublin? For example Qatar, Japan Airlines, Cathay even TAM?....

No.

Alliance membership might see codeshares on EI flights. But alliance membership actually reduces the chance of other OneWorld airlines coming to DUB.

WheatenBriar

Graham wrote: »

+1

Lots of the scaremongering appears to forget that IAG run a hub and spoke operation, not a point to point.

It would be a bit daft to start removing the spokes.

Ah I'm only speculating Tbh
They most likely will use Dub as a Tatl hub fed from UK regions keeping overcrowding pressure off lhr


But Also apart from the financial logic,if they come to the Irish Government saying all DUB lhr will be Ei (securing jobs) ,that might seal it

I hope YOU are right btw
The present arrangement is a good one

Graham

WheatenBriar wrote: »

Ah I'm only speculating Tbh
They most likely will use Dub as a Tatl hub fed from UK regions keeping overcrowding pressure off lhr

That's exactly what I expect. LHR is an expensive operating base which is why BA have largely abandoned the UK regions. With an EI buyout, that lost TATL traffic can be redirected via DUB.

WheatenBriar wrote: »

But Also apart from the financial logic,if they come to the Irish Government saying all DUB lhr will be Ei (securing jobs) ,that might seal it

I think MAD - DUB is operated by Iberia and BA currently. I would expect DUB - LHR to continue under EI and BA, certainly in the immediate future. EI may even pick up some jobs if they can demonstrate the routes can be operated at a lower cost base.

elastico

As regards job losses is it not also an opportunity to put (using random examples) a pilot training school in Cork or a cabin crew school in Dublin or position spare planes in Shannon as its obviously a good cover location to pickup passengers if there a transatlantic emergency landing etc.

Van.Bosch

the strange thing about the monopoly on DUB-LHR is until BA started this back up a while back EI had a 100% monopoly on it, so IAG having a monopoly on it should not really cause concern.

L1011

Van.Bosch wrote: »

the strange thing about the monopoly on DUB-LHR is until BA started this back up a while back EI had a 100% monopoly on it, so IAG having a monopoly on it should not really cause concern.

BMI were on it from the early 1990s...

SpaceTime

Graham wrote: »

+1

Lots of the scaremongering appears to forget that IAG run a hub and spoke operation, not a point to point.

It would be a bit daft to start removing the spokes.

I think the Ryanair bid probably has people a little scared to be honest too. The issue with that was Ryanair were actually attempting to buy-out their main competitor in this region and break it up.

I don't really see a whole lot of difference between how IAG and Aer Lingus do business. There was a massive gulf between how Ryanair and Aer Lingus do business though.

I'm not criticising Ryanair's business model. They're extremely successful at what they do. However, I think it was attempting to take over Aer Lingus for all the wrong reasons and luckily enough robust regulatory systems at European level blocked it on the basis that it would have harmed competition.

However, I think it has left a lot of people very jittery about takeovers of EI.

Bear in mind similar connections exist between say Air France and KLM and almost nothing has changed at either airline.

I don't see any evidence of IAG cancelling Iberia flights either or routing BA transatlantic traffic through Madrid for that matter either - despite it being a very logical route in some ways especially to the Souther US and Latin America and Barajas is a spectacularly huge and efficient facility.

The other aspect is that there may well be parts of Aer Lingus that are far more efficient and cost effective than BA. So, if anything you might see Aer Lingus operations taking over aspects of BA's services.

For example, there may be possibilities of maintenance etc at Shannon (a huge airport for its traffic) that didn't exist before.

LXFlyer

L1011 wrote: »

BMI were on it from the early 1990s...

And before that BA and BEA!

handlemaster

not long ago aer lingus was worth nothing and the government had to pump millions into it. the government have no business owning an airline . its doing good enough now time to sell.

SpaceTime

The Government have a business ensuring that we have sufficient connectivity though. I'm not sure that owning Aer Lingus is how to do that, but progressively and actively managing and marketing airports certainly is called for.

I think what's going on with Cork at the moment is an absolute disgrace. It needs to be either spun out on its own as a public body locally managed, or DAA needs to start taking it a lot more seriously.

That's a side issue and nothing to do with the EI sale, but I think that sort of thing is where the Government needs to be much more proactive.

The key now is to make the airports, especially the three state-owned major international connection points much more attractive to airlines.

In many respects we're actually far too dependent on the whims of EI and FR and should have more diversity of carriers at Dublin, Cork and Shannon.

Van.Bosch

L1011 wrote: »

BMI were on it from the early 1990s...

yes but they cut it entirely before BA went on it

L1011

Van.Bosch wrote: »

yes but they cut it entirely before BA went on it

No, they didn't. They continued until the day it was rebranded to BA; even with BA-sold and -marketed "operated by BMI" flights before it was fully finalised.

Razor44

I see FF's timmy dooley is opposing the deal....and labour are jittery About it. Localism might just destroy what could be a good deal.

IAG are most definitely not FR. buying EI would appear to a good strategic move. Its in IAGs interst to have a strong EI imo, picking up the UK regional traffic and/or winning it back from KLM. I can only see it as a good deal. Although i can underatand the uncertainty surrounding it.

Genuine question, How much longer would EI last as a stand alone?

LXFlyer

L1011 wrote: »

No, they didn't. They continued until the day it was rebranded to BA; even with BA-sold and -marketed "operated by BMI" flights before it was fully finalised.

Absolutely - the bmi operation was subsumed into BA.

There was no lapse between the two.

SpaceTime

It's hard to know if Aer Lingus could stand alone in the long term.
There are economies of scale to be had from a big group, but at the same time Aer Lingus' market is pretty captive and unique as they serve an island with very few other transit alternatives other than air.

It's not really in the same boat as say a Belgian airline or something like that.

I can't really see BA subsuming EI due to the cultural sensitivities around EI's branding and its status as a flag carrier.

BMI's brand was pretty weak and also very similar to BA in the sense that it was "British Midlands" so it made sense to just combine the two.

Combining Aer Lingus into the BA brand would probably just get a lot of negative PR and would be quite damaging to IAG.

EI is also at least twice the size of BMI and has a typical 'flag carrier relationship' with Irish airports and its own hubs. It's not really crossing over with BA at all where as BMI was one of BA's minor competitors.

I wouldn't be surprised though if they come up with some flexibly branded IAG aircraft that could operate for either company.

On top of that, Aer Lingus' branding is pretty much iconic in the industry. It's one of the most stand-out airlines you'll ever see on stand.

Tenger

SpaceTime wrote: »

.......

I wouldn't be surprised though if they come up with some flexibly branded IAG aircraft that could operate for either company.

Each airline in the IAG group operates to their own SOP's and with their own onboard product. I can't see this option happening.

Van.Bosch

L1011 wrote: »

No, they didn't. They continued until the day it was rebranded to BA; even with BA-sold and -marketed "operated by BMI" flights before it was fully finalised.

my mistake - was convinced there was a time it was totally dropped.

Why was there such a noise about BA adding 8 rotations a day etc etc when they did come on? i must be confused.

Thanks

Edit: i think it was the closure of Dublin as a base for BMI which got me thinking they dropped the route altogether. The BA announcement was significant as they added to the remaining BMI flights with extra rotations of their own.

Apologies for the confusion!

Jhcx

SpaceTime wrote: »

BMI's brand was pretty weak and also very similar to BA in the sense that it was "British Midlands" so it made sense to just combine the two.

Combining Aer Lingus into the BA brand would probably just get a lot of negative PR and would be quite damaging to IAG.

EI is also at least twice the size of BMI and has a typical 'flag carrier relationship' with Irish airports and its own hubs. It's not really crossing over with BA at all where as BMI was one of BA's minor competitors.

BMI are gone back to what they actually are ment to be. back to a regional airline. BMI-Regional
think everyone knows it was in best interest like you have pointed out that it wasnt a strong airline. EI is a different machine to the weak oversized unorganized British midlands Int fighting against BA.

elastico

Razor44 wrote: »

I see FF's timmy dooley is opposing the deal....

That's pathethic since the last time the Shannon - LHR flights were abandoned Dimmy Tooley voted in favour of the decision in the Dail.

Stovepipe

In effect, it's a done deal, regardless of political point-scoring or flag waving or leftie agitation. The Company has been leaned down to sellable standard, the pension issue has been sorted enough to sell the company (and the Deferred haven't got any political clout or the legal or financial firepower to fight for their shattered pensions and FG politicians have already made it clear to the Deferred that it's out of their hands/not interested/don't actually give a ****). Shannon and Cork have no say in the issue despite the standard-issue moaning about threats to jobs,etc whenever anyone does anything to either airport. Muller has his new job on the strength of what he has achieved in Lingus. The only potential fly in the ointment is Ryanair and I suspect that MoL and WW have already made their arrangements for the FR shareholding and Enda Kenny will get shot of the Govt holding as soon as he can.
Right now, we in the Company are waiting to see where the axe will fall, as it surely will.

regards
Stovepipe

roundymac

elastico wrote: »

That's pathethic since the last time the Shannon - LHR flights were abandoned Dimmy Tooley voted in favour of the decision in the Dail.

They also had no problem selling the 74.9% shareholding to fund Berties excess's.

Jack1985

Would like to hear people's opinions on what EI may look like after the takeover should it go ahead. I'm guessing the recent agreements with AC, EY and UA would be ended relatively quickly. Existing agreements with B6, RE unchanged. I see the KL agreement continuing unchanged, the feed type there BA doesn't massively compete with anyway (Asia, South/Central America) and its a case of Business 101 by keeping KL metal out. The new feeds from re-entering Oneworld would be welcome as would the synergies of lower fuel bills etc, but there will be job losses.

I'm referring to Back Office functions (IT etc), Ground staff (Maintenance). Or could IAG surprise everyone by relocating to Eire, keeping the above jobs?

fr336

Jack1985 wrote: »

I'm referring to Back Office functions (IT etc), Ground staff (Maintenance). Or could IAG surprise everyone by relocating to Eire, keeping the above jobs?

What would the Spanish side make of that? Genuine question, I'm not too familiar with the mechanics of the initial IAG formation. Isn't it registered in Spain but based in London?

kub

Jack1985 wrote: »

Would like to hear people's opinions on what EI may look like after the takeover should it go ahead. I'm guessing the recent agreements with AC, EY and UA would be ended relatively quickly. Existing agreements with B6, RE unchanged. I see the KL agreement continuing unchanged, the feed type there BA doesn't massively compete with anyway (Asia, South/Central America) and its a case of Business 101 by keeping KL metal out. The new feeds from re-entering Oneworld would be welcome as would the synergies of lower fuel bills etc, but there will be job losses.

I'm referring to Back Office functions (IT etc), Ground staff (Maintenance). Or could IAG surprise everyone by relocating to Eire, keeping the above jobs?

IAG have a business to run, they are throwing over € 1BN at Aer Lingus. They are in this to make money and to grow their business. I would not at all be surprised to see a relocation of their Head Office and plenty of jobs will be won. Perhaps Willie is homesick.

murphaph

IAG could relocate to Ireland any time they like without owning an Irish airline I would have thought. They haven't done so yet, so why would they do it post Aer Lingus deal?

IRLConor

murphaph wrote: »

IAG could relocate to Ireland any time they like without owning an Irish airline I would have thought. They haven't done so yet, so why would they do it post Aer Lingus deal?

Indeed, and if they wanted to take advantage of our tax they don't even have to relocate anybody. Just start a small brass plate company and do it all with paperwork.

Dacian

Jack1985 wrote: »

Would like to hear people's opinions on what EI may look like after the takeover should it go ahead.......
....I'm referring to Back Office functions (IT etc)...

I assume you are referring to the SIPTU statement yesterday. I guess in a worse case scenario IAG could amalgamate the back office functions of EI with another airline in the group.

Personally I can't see this being an immediate issue. Why spend 1.4bn to takeover a successful and profitable company (which has gone through it cost cutting program) to then get tangled up in IR and political issues.

fr336 wrote: »

What would the Spanish side make of that? Genuine question, I'm not too familiar with the mechanics of the initial IAG formation. Isn't it registered in Spain but based in London?

I am of the opinion that the relocation to Spain was an olive branch to the Iberia part of IAG. Which shows that IAG is aware of political/cultural sensitivities.

IRLConor wrote: »

Indeed, and if they wanted to take advantage of our tax they don't even have to relocate anybody. Just start a small brass plate company and do it all with paperwork.

Similar to what a lot of the leasing companies have done.

murphaph

I doubt we're going to see any sort of slash and burn of EI. Walsh knows how hard it was to reform EI into the successful company it is today. He won't risk strike action, when other parts of IAG are likely far less profitable. If anything I'd expect the other companies in the group to be told regularly of EI's performance and to be asked why they can't achieve similar levels.

bk

murphaph wrote: »

IAG could relocate to Ireland any time they like without owning an Irish airline I would have thought. They haven't done so yet, so why would they do it post Aer Lingus deal?

While true, I think it becomes politicly easier if they actually own an airline here in Ireland.

If they moved their HQ here with no actual presence here, then it would look bad back home in the UK. But if they actually own an airline here, it wouldn't look so bad.

I don't believe they would actually move HQ over night or anything like that, but I could certainly imagine them quietly moving parts of their operations over here for tax benefits.

In particular the purchase and leasing of aircraft, something Ireland already excels at and has lots of experienced people in.

That could genearte lots of jobs for accountants, lawyers, office admin people, etc.

Jack1985 wrote: »

I'm referring to Back Office functions (IT etc), Ground staff (Maintenance). Or could IAG surprise everyone by relocating to Eire, keeping the above jobs?

Yes, I think there would be a very good chance of them setting up shared service centers here in Ireland. Ireland is already the leader in Europe in this area, so it makes logical sense. Also Ireland is a leader in multilingual sales and support so an obvious location for those types of jobs for a pan European company like IAG.

However I wouldn't expect these sort of jobs to be with Aer Lingus. Instead they are more likely to set up some sort of shell company to run such operations for tax purposes.

So there could well be job loses at Aer Lingus, but Ireland could actually end up with net increase in jobs at these sort of companies and also operations at DUB and Shannon, if BA funnels UK regionals through those hubs, a very likely thing.

BTW don't worry about the IT staff. Most of them will be queueing up for the redundancy! It is like winning the lotto, you get a big pay off that can go a long way to paying off your mortgage etc. and given the massive demand for IT people in Ireland at the moment, they'll end up with 4 job offers probably paying a higher salary then they are currently getting within a week! So no worries for these folks at least.

man98

bk wrote:

If they moved their HQ here with no actual presence here, then it would look bad back home in the UK. But if they actually own an airline here, it wouldn't look so bad.

Doesn't look bad for Norwegian Long Haul...

bk

man98 wrote: »

Doesn't look bad for Norwegian Long Haul...

Actually highly controversial in Norway, got tons of bad press, political pressure, people calling for boycots, etc.

I'm sure IAG would rather do it quietly and avoid such bad press.

Stovepipe

Lingus has constant trouble getting and retaining IT people.

Long Time Lurker

http://www.irishtimes.com/news/politics/little-appetite-for-sale-of-government-s-aer-lingus-share-1.2081809

bk

Stovepipe wrote: »

Lingus has constant trouble getting and retaining IT people.

Pretty much true of every company in Ireland.

You have to pay well and have lots of nice bonuses.

elastico

Long Time Lurker wrote: »

http://www.irishtimes.com/news/politics/little-appetite-for-sale-of-government-s-aer-lingus-share-1.2081809

What nonsense!

It didn't bother the government of the day too much when slots were moved to Belfast a few years ago.

I suspect there will be lots of window dressing before the government go sale agreed.

I assume if the government can block it then so can Ryanair, who have been quiet on the matter to date (assuming Ryanair are not forced to sell their shareholding)

If the government can block then it becomes a de facto semi state again and the unions will have great leverage again.

donvito99

elastico wrote: »

What nonsense!

It didn't bother the government of the day too much when slots were moved to Belfast a few years ago.

I suspect there will be lots of window dressing before the government go sale agreed.

I assume if the government can block it then so can Ryanair, who have been quiet on the matter to date (assuming Ryanair are not forced to sell their shareholding)

If the government can block then it becomes a de facto semi state again and the unions will have great leverage again.

The Government's weak in the face of the opposition and lacks any genuine leadership, I expect this will be put on the méar fada or sunk all together.