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I think this is quite interesting - I must confess I hadn't considered one of the Middle Eastern carriers as a potential purchaser, although they are the only ones with any money these days I suppose.
Does anyone think that Etihad sees potential in Aer Lingus beyond its LHR slots? It would be nice to think they did, possibly in some sort of combination with bmi (and Virgin I guess?!), but it seems a bit fanciful...
Etihad’s approach follows Mr Varadkar’s recent statement that the Government would be willing to sell its stake in Aer Lingus under certain conditions. This included securing the right price for the shares and getting certain commitments on the use of its Heathrow slots.
From the same article it appears that Etihad did not approach Ryanair (yet!) about their 29.8% share - but Etihad would not be allowed to own half the company anyway under existing airline ownership rules.
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Last edited by irishguy28; Oct 18, 11 at 3:22 am..
Ethiad as I understand it and as irishguy28 says,being a non EU based airline can't own more than 49% of an EU airline.
So even if they buy the irish governments holding,they cannot buy all of Ryanair's along with ti and cannot take a controling stake.
Does anyone think that Etihad sees potential in Aer Lingus beyond its LHR slots? It would be nice to think they did, possibly in some sort of combination with bmi (and Virgin I guess?!), but it seems a bit fanciful...
Other than the LHR slots, I see little value in EI. An Irish airline with very virtually no intra-Ireland regional network?
DUB is in one of the worst geographical locations to provide intra-EU connectivity, and EY already operates to JFK and ORD. That really only leaves BOS.
I'm afraid EY is simply slot-fishing, otherwise lets see how much EY is willing to pay for EI minus the LHR slots.
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Other than the LHR slots, I see little value in EI. An Irish airline with very virtually no intra-Ireland regional network?
DUB is in one of the worst geographical locations to provide intra-EU connectivity, and EY already operates to JFK and ORD. That really only leaves BOS.
I'm afraid EY is simply slot-fishing, otherwise lets see how much EY is willing to pay for EI minus the LHR slots.
I beg to differ...
Year to date profits at EI of €67 million and ei are bidding for more heathrow slots at the moment according to todays report [the bmi slots lufthansa have for sale] and thats in a depressed market.
Indeed, but there are a few caveats surrounding that performance:
- Total Full Year Profits will be significantly lower than that, with a loss making scenario developing for Q4, 2011.
- Increased Operating Costs will become a permanent feature from Q4 onwards, particularly in relation to fuel, as the impact of pro-active forward hedging expires towards the end of 2011, into 2012.
- Exceptional items are sure to feature once again, we have to await those and view their impact.
For the full year, EI should report it's best performance in three years, there's no doubting that. Additionally, it is now, once again, a positive, cash generating business. However - the outlook is not as certain, with significant downward pressure on future positive yield trajectory and premium revenue growth as the global economic environment fluctuates from difficult to at times bleak.
Aer Lingus is worth a significant amount, should all of it's assets be disposed of, over time. However, as a collective cash generating unit - the airline is only beginning to turn around after three years. This is reflected in the current Market Capitalisation of EI. Were the pension deficit issue to be resolved however, and global stock markets were to calm - then EUR 1.00 p/share is a reasonable expectation, given the latest performance guidance.
I meant strategic value. There's nothing about EI's longhaul network that would benefit EY, and domestic connections are sparse. The Irish govt would have to be a fool to allow EY to buy EI without conditions on slot usage. Otherwise you can watch EI's LHR ops dwindle to virtually nothing.
Watch how fast the EY proposal dies if the govt imposes provisions.
Quote:
Originally Posted by Earthman
... and ei are bidding for more heathrow slots at the moment according to todays report [the bmi slots lufthansa have for sale] and thats in a depressed market.
Well, thats not going to happen.
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It's been a week since the Gulf News broke the story, but no other news outlet has picked it up, and neither Aer Lingus nor Etihad have commented on it. Very strange!
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In an article in yesterday's Financial Times about Etihad and Qatar looking for airline partners, they stated the following, so perhaps it's not all over just yet:
Etihad is interested in the possibility of buying the Irish government’s 25 per cent stake in Aer Lingus, and Mr Hogan highlighted how the Dublin-based carrier flew “to many parts of Europe that we don’t fly to”.
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According to these lines in an article from Bloomberg that is more generally about IAG's future targets, it appears that perhaps Qatar Airways may be interested in Aer Lingus...
Quote:
Originally Posted by Bloomberg
Vazquez said that IAG isn’t concerned about losing out in Europe to Middle Eastern carriers such as Etihad Airways, which has taken a 29 percent stake in Oneworld recruit Air Berlin, or Qatar Airways Ltd., which said last week it’s examining deals in the region after buying Cargolux International SA in 2010.
Shares of Stockholm-based SAS Group (SAS) gained as much as 7.8 percent Jan. 19 after Qatar Air CEO Akbar Al Baker said he was looking at an unspecified purchase. Ireland’s Aer Lingus Group Plc (AERL), previously linked with a bid from Etihad, rose 9.1 percent.
Qatar is also a likely investor in Barcelona-based Spanair SA, which is controlled by the regional government of Catalonia, Spanish newspaper Expansion said Oct. 27, citing people close to the airline. A deal might consist of cash or planes, it said.
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