Despite the EI Board's rejection, I am worried that the Taoiseach has not come out in time honoured fashion and poo-pooed the proposal on strategic and competitive grounds; strangely non-committal answers yesterday... I wonder if the Government is under censure from the German three-legged pox-bottle? (That's not you, starflyergold, BTW! )
I still doubt that such a deal could go through, considering FR's stranglehold on the DUB/ORK/SNN to UK markets.
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Quote:
Originally Posted by GoldCircle
Despite the EI Board's rejection, I am worried that the Taoiseach has not come out in time honoured fashion and poo-pooed the proposal on strategic and competitive grounds; strangely non-committal answers yesterday... I wonder if the Government is under censure from the German three-legged pox-bottle? (That's not you, starflyergold, BTW! )
As both Shane Ross and Denis Desmond have noted, it could just be an attempt for Ryanair to flush out other potential buyers - perhaps forcing Etihad's hand - thereby helping Ryanair to finally exit their shareholding at a much higher price (EI stock jumped quite a bit on yesterday's news).
We shall see!
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As both Shane Ross and Denis Desmond have noted, it could just be an attempt for Ryanair to flush out other potential buyers - perhaps forcing Etihad's hand - thereby helping Ryanair to finally exit their shareholding at a much higher price (EI stock jumped quite a bit on yesterday's news).
This thought occurred to me too. Do Etihad have the money to do this? I'm not entirely familiar with the situation, but they seem to have endless cash. Their processes and systems seem terrible though.
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Etihad do seemingly have deep pockets and have made no secret of the fact that they're out shopping for airlines. I don't think money would be the problem - it's just a case of whether it suits Etihad's agenda to increase their holding (as they are thinking of doing anyway).
Etihad cannot take full control of Aer Lingus - EU rules prevent non-European entities from controlling any EU airline. So the most they could hold is 49.99% - meaning that they cannot buy both Ryanair's full holding (~29%) and the government's full holding (~25%). Perhaps they will come to some agreement with MOL to buy Ryanair's stake - that would probably meet the government's approval, as they then would probably be able to sell their holding more easily (on the market perhaps, rather than in a single transaction) and get a higher price, too, although other airline investors who would have shunned investing while having Ryanair as a back-seat driver would only be less displeased at having a different airline - Etihad - having such a large holding.
But then again, there may be other things far more appealing to Etihad coming on the market very soon - such as the 14% stake in IAG that Bankia will have to offload - I can imagine that both Qatar and Etihad would be interested in taking that holding. BA and Qatar have been cosying up together for a while, but Etihad might also want to pull the rug out from under their neighbours, and it could change the dynamics of Etihad's future growth, as well - with relatively large holdings in 3 of OneWorld's European airlines (the 14% of BA and IB, and their 29% of AB) they would be drawn ever closer to joining the OneWorld alliance. But note also that LOT and TAP are up for sale too - so perhaps now isn't the time for EY to be thinking about sinking more money into Aer Lingus.
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My understanding of the previous offers is that they were dismissed as uncompetitive on the grounds that too big a concentration of flights in and out of Ireland would be held by the one airline. This time around, were the transaction to proceed, this concentration would be even higher - therefore Ryanair's potential of Aer Lingus would create an even more uncompetitive market now than it would have previously...so there's hope for a better take over for us unfortunates on EI Gold Circle!
My understanding of the previous offers is that they were dismissed as uncompetitive on the grounds that too big a concentration of flights in and out of Ireland would be held by the one airline. This time around, were the transaction to proceed, this concentration would be even higher - therefore Ryanair's potential of Aer Lingus would create an even more uncompetitive market now than it would have previously...so there's hope for a better take over for us unfortunates on EI Gold Circle!
I get the argument but surely there are even higher concentrations in other places where takeovers were allowed? Lufthansa Group in Vienna after the takeover of Austrian, ZRH/GVA with the takeover of Swiss, etc.
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Perhaps. But FR and EI together would be the only operator between Ireland and a range of countries.
Apparently, they account for over 80% of the Ireland-UK market (and I thought it would be far higher than that, given that the only other airlines operating between Ireland and the UK are BA/bmi (LHR-DUB, 4 times a day I think), CityJet (LCY-DUB), Flybe (Exeter & Southampton to DUB; Birmingham to WAT; Glasgow to CFN; Edinburgh, Leeds/Bradford and Manchester to NOC), Jet2 (Newcastle to ORK) - which hardly seems enough to make up 20% of the cross-channel market)
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Virgin "crucial" to Ryanair's bid
From The Sunday Times:
O'Leary targets British carrier for Heathrow flights to facilitate Aer Lingus takeover, writes Mark Paul
VIRGIN ATLANTIC is poised to play a crucial role in Ryanair's planned takeover of Aer Lingus by taking over routes between Ireland and Heathrow airport.
Talks between Ryanair and Virgin Atlantic have intensified in recent weeks, as the Irish airline moves to allay competition fears surrounding its E1.30-a-share bid.
Ryanair has held talks with a number of big European airlines, including Virgin and British Airways (BA) to take over several of Aer Lingus's routes, as it looks for ways to allay competition concerns about its bid in the European Commission.
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And VS have just announced they're going to become a short-haul operator.
They've announced that from March, they will run 3 daily MAN-LHR services, operated (at least initially) on wet leased A319s. They're obviously missing the connecting traffic at LHR that used to be fed to them by bmi and say that it "signals the start of a new network providing us with regional feed for our long-haul network".
So perhaps being able to completely take over EI's DUB-LHR operations (and who knows, maybe EI's entire LHR operation) would be very attractive to them.
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