Hasn't it been discussed here before that it's quite unlikely that slots in Heathrow are not actually a saleable commodity?
Ryanair proposed takeover of Aer Lingus
- Thread starter Humpback
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Hasn't it been discussed here before that it's quite unlikely that slots in Heathrow are not actually a saleable commodity?
To be fair to Martin Cullen, anyone wishing to change the articles of association would need more than 75% of the vote, so as long as the government don't sell up, they still have a significant say in the company. Not saying it can't be done but it is not an easy thing to do. And to be fair, I don't think Ryanair give a damn about selling LHR slots (if they can be sold as you say). They would be quiet happy to let Aer Lingus fly away into the place. It must be profitable considering the hoo ha over it!
Very Dublin based mentality. Other than AerLingus there are no airlines flying ORK-LHR or SNN-LHR
And no one living anywhere near either airport would want to fly via Dublin
On the news at one it said Ryanair are calling this Operation Bargepole 
. Find the talk of a white knight a little surprising, the Gov aren't going to sell their ~30%, Ryanair probably have over 20% by now, so why would a white knight come in for the remaining 35%?
I assume that the ESOT will prefer to let Ryanair become the majority shareholder than sell their shares in mass to any white knight and pay tax on it (as it would be over the 12700 a year limit for ESOTs)
. Find the talk of a white knight a little surprising, the Gov aren't going to sell their ~30%, Ryanair probably have over 20% by now, so why would a white knight come in for the remaining 35%? I assume that the ESOT will prefer to let Ryanair become the majority shareholder than sell their shares in mass to any white knight and pay tax on it (as it would be over the 12700 a year limit for ESOTs)
Initially I'd assumed there was no way this buyout would pass the relevant competition authorities. However, Ryanair don't compete with Aer Lingus on long haul routes, so there may be a creative solution that would satisfy the regulators (e.g. a breakup of Aer Lingus!).
Ryanair [broken link removed]:
Obviously the usual posturing from Ryanair, but if they really believe that, it suggests they are primarily interested in the long-haul routes, as speculated earlier in the thread.
Either way, it seems like a win win for O'Leary. If he gets Aer Lingus he gains a long-haul brand, gets immense bargaining power in Dublin airport, slots in LHR, and significantly weakens the unions in Irish aviation. If the deal falls through, dealing with the hostile takeover distracts the company management from growing the business and competing with Ryanair.
It could all backfire though; there is a third possibility. Aer Lingus is now "in play". Is there another airline with cash on the balance sheet that would benefit from a long-haul brand, and would be more attractive to the unions and the regulators?
Ryanair [broken link removed]:
Obviously the usual posturing from Ryanair, but if they really believe that, it suggests they are primarily interested in the long-haul routes, as speculated earlier in the thread.
Either way, it seems like a win win for O'Leary. If he gets Aer Lingus he gains a long-haul brand, gets immense bargaining power in Dublin airport, slots in LHR, and significantly weakens the unions in Irish aviation. If the deal falls through, dealing with the hostile takeover distracts the company management from growing the business and competing with Ryanair.
It could all backfire though; there is a third possibility. Aer Lingus is now "in play". Is there another airline with cash on the balance sheet that would benefit from a long-haul brand, and would be more attractive to the unions and the regulators?
It would appear that O'Leary is deadly serious about this. Quite a good analysis today in the FT of the whole situation.
Had to laugh this afternoon though as i came across the Sunday Biz Post from the 24th Sept while tidying up. O'Leary is displayed on the Business section on the "last day before the Aer Lingus flotation" talking up the fact that he will expand dramatically from Dublin and go head to head to Aer Lingus (naturally helping to create some negative sentiment about the EI shares).
Most interesting though was his comments about going long-haul. He admited it didn't really fit in with the Ryanair model but that he was very interested in it and was "considering the possibility of a brother or sister airline run seperately from Ryanair to operate long-haul routes".
Had to laugh this afternoon though as i came across the Sunday Biz Post from the 24th Sept while tidying up. O'Leary is displayed on the Business section on the "last day before the Aer Lingus flotation" talking up the fact that he will expand dramatically from Dublin and go head to head to Aer Lingus (naturally helping to create some negative sentiment about the EI shares).
Most interesting though was his comments about going long-haul. He admited it didn't really fit in with the Ryanair model but that he was very interested in it and was "considering the possibility of a brother or sister airline run seperately from Ryanair to operate long-haul routes".
ubiquitous
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Indeed. Another might be an order compelling Ryanair and/or Aer Lingus to sell or concede some of their existing routes to a competitor. A strategy along these lines was used in the UK to permit Morrison supermarkets to buy Safeway. One obvious candidate for any such deal might be Easyjet.
D
daltonr
Guest
Hasn't the government put more than 50% of the airline on the open market. How can they control the situation from here to ensure that a majority of it remains in the hands of Irish Nationals?
Has the government jeopardised the bilateral agreements with the US? Or am I misunderstanding what Minister Cullen has said?
Anyone want to take odds on the Irish government buying Ryan Air's stake in the company at a nice profit for Ryan Air, and a nice loss for the Tax Payer? And the government once again being the majority stake holder, defeating the whole point of the floatation.
-Rd
Precisely zero.
I reckon O'Leary is deadly serious about this whole thing and no matter how it plays out he will profit from it. Buying the shares back would be a complete farce. There's egg on the governments face at this stage and i see only one way for them to play this out and come up smelling of roses.
A 'White Knight' appears on the scene. With Mannions background i reckon there's rather frantic calls to Emirates this weekend (though from rumours i've heard they were interested anyway).
The government agrees to sell them their 28% in return for certain guarantees regarding the brand/staffing/heathrow slots etc. etc.
The esot recommends selling to Emirates too which in the face of working for O'Leary the staff overwhelmingly vote for.
With approx 40% of the airline Emirates can seek the remainder of the shares on the market, O'Leary offers to sell his stake (at a healthy profit) rather than enter a bidding war for the remaining shares.
Bertie et al can happily announce how they not only saved Aer Lingus from the evil Micko but have secured the brand/jobs/slots for the future and made and extra €500+ million for the country into the bargain.
Anything else and we won't see Bertie back in government next year.
D
daltonr
Guest
If Martin Cullen is right (I know a stretch, but stay with me).... If Martin Cullen is correct, then your Emirates plan can't work, because the majority of the company must stay in Irish hands, or the agreement between Ireland and the US is breached.
The only way I can see the majority being guarenteed to stay in Irish hands is if it is owned by the government.
Why the hell did they sell more than half if they knew about this treaty?
-Rd
The only way I can see the majority being guarenteed to stay in Irish hands is if it is owned by the government.
Why the hell did they sell more than half if they knew about this treaty?
-Rd
D
dats_right
Guest
Good thread. Martin Cullen strikes again! How is the man allowed to constantly get away with costing the Irish tax payer so much money? The man has the opposite of the midas touch. If he was employed in any industry the closest he would get to the boardroom would be to clean it! The man has no brains. There is something seriously wrong with this country when he is sitting at the cabinet table.
This Government has time and time again shown its contempt for the Irish people and has increasingly behaved with shocking arrogance. This fiasco involving the 'give-away' of a very valuable state asset i.e. Aer Lingus is just another in the long list of government blunders.
This Government has time and time again shown its contempt for the Irish people and has increasingly behaved with shocking arrogance. This fiasco involving the 'give-away' of a very valuable state asset i.e. Aer Lingus is just another in the long list of government blunders.
Todays Irish Independent claims a few big international Funds (Eton Park among them) have now built up a 25% stake in the firm.
Doing the simply maths:
Ryanair: 20%
Funds: 25%
Gov: 28.3%
ESOT: 9.6%
Others: 17.1%
So Ryanair needs another 30% to hit a majority. The investment funds and other private investors are solely motivated by profit (unlike unions/gov.) and currently hold approx. 42.1%. Basically it looks very possible that O'Leary could aquire the 50+% he needs.
So a deal that looked almost absurd, if not shocking a few days ago could well occur quite soon.
Doing the simply maths:
Ryanair: 20%
Funds: 25%
Gov: 28.3%
ESOT: 9.6%
Others: 17.1%
So Ryanair needs another 30% to hit a majority. The investment funds and other private investors are solely motivated by profit (unlike unions/gov.) and currently hold approx. 42.1%. Basically it looks very possible that O'Leary could aquire the 50+% he needs.
So a deal that looked almost absurd, if not shocking a few days ago could well occur quite soon.
M
Meccano
Guest
To all of you who are betting the Government will block O'Leary by refusing to sell their 28% remaining share-holding - read this: FT.com
Emirates was always tipped to be the future owner of Aer Lingus - among a certain group 'in the know' anyhow.
I reckon that was the reason the whole project was pushed out with such indecent haste in the end, and why Mannion was appointed to do it (ex Emirates guy).
But I guess Emirates were going to take a 'softly softly' approach - so as not to scare the public, de guvmint, or de workers when they made a pass.
Nobody expected O'Leary to come kick the door down before the gentle-folk at Emirates had even put their hand up!
As Eurofan has said, I wouldn't be at all surprised if someone from de guvmint and Aer Lingus isn't crying down the phone at this very moment to Sheik Maktoum, BEGGING for help.
Its hilarious now though, listening to all and sundry boo-hooing about the loss of 'wonderful' Aer Lingus, when it has heretofore been everyones favourite whipping boy. The same 'meeja' hacks who queued up to berate it as a dud are now wistfully praising it as 'an Internationally recognised Global Brand and a symbol of Irish excellence in the aviation business'....puke.
Sic Transit Gloria Mundi.
FF are DEAD in North County Dublin.
PS. 'like JetBlue' - eh??
They don't do international long-haul! Maybe thats your point!?
PPS. Slots - 'why is Dublin - London so important?'
Possibly because its Europes busiest air route, and is arguably THE WORLDS busiest air route !
Since a large number of the punters on the Dublin - London route currently choose LHR, it'll be a pity for them when the slots are either (a) Sold, or way less likely (b) used to set up some kind of Long-Haul cheapo service ex LHR by Ducksy.
Like I said earlier - the Ireland (DUB, SNN and CRK) to LHR punters will soon be getting more familiar with Stansted and the M25 car park.
Oh dear oh dear....this looks to me like Ducksy O'Leary will appeal to the EU Court of Justice to force de guvmint to sell up! Game over!
Emirates was always tipped to be the future owner of Aer Lingus - among a certain group 'in the know' anyhow.
I reckon that was the reason the whole project was pushed out with such indecent haste in the end, and why Mannion was appointed to do it (ex Emirates guy).
But I guess Emirates were going to take a 'softly softly' approach - so as not to scare the public, de guvmint, or de workers when they made a pass.
Nobody expected O'Leary to come kick the door down before the gentle-folk at Emirates had even put their hand up!
As Eurofan has said, I wouldn't be at all surprised if someone from de guvmint and Aer Lingus isn't crying down the phone at this very moment to Sheik Maktoum, BEGGING for help.
Its hilarious now though, listening to all and sundry boo-hooing about the loss of 'wonderful' Aer Lingus, when it has heretofore been everyones favourite whipping boy. The same 'meeja' hacks who queued up to berate it as a dud are now wistfully praising it as 'an Internationally recognised Global Brand and a symbol of Irish excellence in the aviation business'....puke.
Sic Transit Gloria Mundi.
FF are DEAD in North County Dublin.
PS. 'like JetBlue' - eh??
They don't do international long-haul! Maybe thats your point!?
PPS. Slots - 'why is Dublin - London so important?'
Possibly because its Europes busiest air route, and is arguably THE WORLDS busiest air route !
Since a large number of the punters on the Dublin - London route currently choose LHR, it'll be a pity for them when the slots are either (a) Sold, or way less likely (b) used to set up some kind of Long-Haul cheapo service ex LHR by Ducksy.
Like I said earlier - the Ireland (DUB, SNN and CRK) to LHR punters will soon be getting more familiar with Stansted and the M25 car park.
R
rabbit
Guest
Well done and best of luck to all at Ryanair. We were all held hostage by the inefficient, overpaid and underworked people at Aer Lingus for so long in the 70's and 80's etc.
......... do you still therefore believe this to be the case in 2006?
R
rabbit
Guest
No, they are not as inefficient, overpaid and underworked as they were decades ago, thanks to the competition from Ryanair etc and the management of Willie Walsh etc. Remember the days 25 years ago when we paid £££ to fly to London, when money was money ( a reasonable house was £ 15,000 ) ?
In my opinion, Aer Lingus are caught between being a dynamic, efficient low cost operator like Ryanair and being a friendly, premium airline. Comparing the last few times I flew with each, the Ryanair staff were nicer / fliendlier, and the Ryanair flights were more punctual.
You have to hand it to O'Leary and his team. A great Irish success story. They are still expanding their number of hubs abroad etc.
M
Meccano
Guest
I heard a statistic just recently, that the Dublin based Ryanair Cabin Crew have a total of 11 Irish people in their number. The rest are foreign - mainly East Europeans.
While I have no grudge against the foreign workforce you have to ask - where are the Irish? Why have they all left? Do I really need to answer that question for you?
Not that it matters much to anyone getting a cheap ticket I guess - just an observation.
I'm sure those E.European crews are VERY friendly. No doubt they're ecstatic just to have a job in The Rich West.
The young lady who died on a recent Ryanair flight probably found the cabin crew VERY friendly too - right up to the point when she collapsed and they neglected to provide the doctor (who happened to be a passenger on board) with the equipment she needed for her recussitation efforts. Apparently they didn't know it was even there.
R
rabbit
Guest
You or I do not know the full facts of what happened to the lady who died on the flight, so are unable to comment on it. The Ryanair staff are well paid , and even if they were paid 142,000 per annum like the ESB workers at Ringsend the poor lady would still have died.
I very much doubt the statistic you "heard" is true anyway, that there are only 11 Irish Ryanair cabin crew. I have flown with them quite a bit, but then maybe all the foreigners working for Ryanair put on Irish accents ? lol
I very much doubt the statistic you "heard" is true anyway, that there are only 11 Irish Ryanair cabin crew. I have flown with them quite a bit, but then maybe all the foreigners working for Ryanair put on Irish accents ? lol
R
rabbit
Guest
Saw an interesting statistic in the paper today. Ryanair has 3 times more planes than Air Lingus, carries four times more passengers than Air Lingus, but yet Air Lingus has 13% more staff than Ryanair.
OK, I know there are complicating factors eg some Air Lingus flights are long haul etc etc but still ....
A friend travelled Ryanair to England some years ago, and who happened to be the person who checked his boarding card / ticket at the time ? Michael O'Leary himself, who when he had helped check the passengers on to the plane got on it himself to travel to England, and who sat a few seats back. Great company, great leader.
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