BA acquires right to buy 85% of Aer Lingus's LHR slots
It appears that as part of Ryanair's commitments to secure regulatory approval to acquire Aer Lingus, BA will take over Aer Lingus's services to Ireland for a period of at least three years and in doing so acquire the right to purchase the slots belonging to Aer Lingus.
There's no certainty that the European Commission will clear Ryanair's takeover but if it did and BA acquired Aer Lingus's slots (currently 3.3% of LHR slots), it could take BA's share of LHR slots near to 56% (and cause more terminal planning problems!).
The UK flag carrier, the largest airline at Heathrow, has struck a deal with Ryanair to purchase more than 85 per cent of Aer Lingus’s slots at the airport, which are currently used to provide services to Dublin, Shannon and Cork, said three people familiar with the agreement between Ryanair and British Airways.
[...]
Ryanair is trying to secure regulatory approval for its third takeover bid for the Irish flag carrier.
Last month, the European Commission objected to Ryanair’s bid on competition grounds. The commission prohibited Ryanair’s first bid for Aer Lingus in 2007, and Brussels has never cleared a merger that it previously rejected.
British Airways is offering to take responsibility for many of Aer Lingus’s services out of Heathrow for at least three years.
With British Airways operating these services, Ryanair is privately saying that a combined Ryanair-Aer Lingus would not be dominant on those routes, said people familiar with the Irish budget carrier’s stance.
However, British Airways would run these services in place of Aer Lingus for between three and five years – after that it would have the right to buy the Irish flag carrier’s Heathrow slots and reallocate them to different destinations, such as New York.
.....on the condition a deal none of the rest of EI shareholders nor the EU actually have given any indication they will support years after it was first raised, goes through.
Somewhat ironic in the week BA cut DUB services after another false dawn.
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Somewhat misleading title, perhaps, as the slot acquisition is contingent on FR's takeover going through.
However, with LON-ORK for me being like LON-NQY to cornishsimon, I would be quite happy to see BA on the route. Much as I like EI (the only airline to make me cry with an announcement on landing), it's not in oneworld and DUB is an awful faff when I want to go to ORK.
Somewhat misleading title, perhaps, as the slot acquisition is contingent on FR's takeover going through.
However, with LON-ORK for me being like LON-NQY to cornishsimon, I would be quite happy to see BA on the route. Much as I like EI (the only airline to make me cry with an announcement on landing), it's not in oneworld and DUB is an awful faff when I want to go to ORK.
And they forgot BHD.
What makes you think ORK will stay? The slot can be used for Wuhan, or Riga
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Quote:
Originally Posted by ian001
It appears that as part of Ryanair's commitments to secure regulatory approval to acquire Aer Lingus, BA will take over Aer Lingus's services to Ireland for a period of at least three years and in doing so acquire the right to purchase the slots belonging to Aer Lingus.
There's no certainty that the European Commission will clear Ryanair's takeover but if it did and BA acquired Aer Lingus's slots (currently 3.3% of LHR slots), it could take BA's share of LHR slots near to 56% (and cause more terminal planning problems!).
Which simply goes to prove that both FR and BA still have quite a way to go when it comes to understanding the concept of fair and open competition. Moving from two airlines to one serving the largest ex-Ireland air route (DUB-LHR) is not typically seen as better competition by normal human beings (as opposed to all airline CEOs)
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Coming back from a very longhaul trip with an overnight in a Bath Road hotel, on landing from an LHR-DUB on EI at around 1000 whilst jet lagged and generally hating the world, the purser announced "Ladies and gentlemen, for those of you visiting, you are most welcome to Dublin, and to those returning, welcome home".
I gather there was a large group of people marked as connecting on his manifest.
Which simply goes to prove that both FR and BA still have quite a way to go when it comes to understanding the concept of fair and open competition. Moving from two airlines to one serving the largest ex-Ireland air route (DUB-LHR) is not typically seen as better competition by normal human beings (as opposed to all airline CEOs)
I'm not sure the deal would be good, but I think your analysis is a touch naive. It's clear that Ryanair would have to open up the LON-DUB route if it has any chance of taking over EI. FR have also said that they would not operate out of LHR. So BA know there is a prospect of of EI LHR's slots coming on to the market. It will make business sense for BA to do what it can to get those slots, as its business is constrained by the size of its operation at LHR.
In terms of competition, I think until the day where we have businessmen saying 'too much profit for me', there will always be an important role for government in ensuring competition. I am doubtful this will come off. But in defence of Ryanair it has brought more competition to the market than most other European airlines.
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Quote:
Originally Posted by Dan72
I'm not sure the deal would be good, but I think your analysis is a touch naive. It's clear that Ryanair would have to open up the LON-DUB route if it has any chance of taking over EI. FR have also said that they would not operate out of LHR. So BA know there is a prospect of of EI LHR's slots coming on to the market. It will make business sense for BA to do what it can to get those slots, as its business is constrained by the size of its operation at LHR.
With due respect, I don't think my analysis was naive: what I was saying was that when competition authorities say that a certain deal will be blocked if a take over results in a dominant position for an airline on a certain route, this will not be solved by selling the purchased airline's slots on this route to an alternative airline which would as a result of the sale become the monopolistic operator on this particular route. The very fact that it would make perfect business sense for BA to be the recipient of the route (specifically because it would consequently become the sole operator on LHR-DUB) is precisely what would undoubtedly make such a deal an unacceptable "solution" for competition authorities. The route has always operated as at least a duopoly in the past (BD and EI, now BA and EI) and downgrading it to a monopoly would lead to the same responses that we made to BA on the LHR-Scotland routes after it purchased BMI. The only realistic solution if FR wants to reassure competition authorities would be to sell the slots to alternative airlines which are currently not operating the routes in question (VS is the obvious candidate unless BE or U2 came as -currently unexpected - surprise candidates) to ensure that offer diversity is maintained once EI disappears.
with joy on landing safely? With terror? Details please 
