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Aer Lingus IAG take over bid [Master Thread]

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Old Sep 28, 2016, 2:57 pm
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Aer Lingus takeover by IAG

Executive summary: Rumours of IAG (International Consolidated Airlines Group, British Airways, IAG Cargo, Iberia and Vueling - Link to Wikipedia article) interest in acquiring EI strengthened in December 2014, with refusals and objections by then 29% owner Ryanair, EI Board of Directors and some Irish government leaders (a 25% stake was held by the Irish government).

Aer Lingus, currently headed by CEO Stephen Kavanagh, was acquired by IAG for €1.36bn in 2015; IAG took full control of Aer Lingus on 02 Sep 2015.

Aer Lingus is working to join the oneworld airline alliance and plans to expand service to the U.S. later this year and next, CEO Stephen Kavanagh said Wednesday.

...Aer Lingus will strive to join the oneworld alliance that counts British Airways and American Airlines among its founding members.

“There are some advantages to joining the big-boys’ club,” Kavanagh said. While Avios will be a competitive tool, “ultimately, we believe that will result in our joining again oneworld,” he said.

Link
to USA Today article - 18 May 2016
Aer Lingus is on target to join the OneWorld alliance next year (2017), when it should also be able to benefit from BA's joint venture with American Airlines.

"The next big integration issue will be Aer Lingus coming into the joint business on the transatlantic. That will require some systems changes," said (IAG CEO) Mr Walsh.

Link to article in Independent - 30 Apr 2016
On 26 May 2015, after months of negotiations on a possible IAG takeover, the Irish government agreed to sell its 25% stake in the company. Ryanair retained a 30% stake in Aer Lingus which it agreed to sell to IAG on 10 July 2015 for €2.55 per share. In August 2015, Aer Lingus' shareholders officially accepted IAG's takeover offer. IAG subsequently assumed control of Aer Lingus on 2 September 2015.

Link to Wikipedia article about Aer Lingus
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Aer Lingus IAG take over bid [Master Thread]

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Old Apr 16, 2015, 10:52 am
  #196  
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From a consumer's standpoint, is it really such a good idea to have the IAG cartel absorbing yet another TATL airline? Right now, Aer Lingus represents a reasonable alternative to BA because they are both geographically positioned in the northwestern part of Europe and it allows travellers to avoid Heathrow and about €400 in unreasonable "surcharges" on each TATL sector. BA charges this amount no matter what class you fly. At least LH had the sensibility to lower theirs based on the class of travel, then again, FRA/MUC are not as strategically located as LHR. If BA took over the Irish national carrier, they will completely dominate (read: monopolize) the British isles, arguably, strategically the prime real estate for TATL flights and with that, fares for the convenient flights will go up (e.g.JFK-LHR) and the surcharges will go up as well. You better believe whatever monetary concession that the IAG makes to the Irish government will be passed on to consumers in the form of increased fares and surcharges.

I see benefits for Aer Lingus to be part of Oneworld again but to do so at the cost of losing its independence and as a result, higher fares and surcharges not just on Aer Lingus but TATL flights in the region -- this seems like a very bad outcome for travellers who do not own stocks in IAG or Aer Lingus.
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Old Apr 16, 2015, 2:49 pm
  #197  
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Originally Posted by Guava
If BA took over the Irish national carrier, they will completely dominate (read: monopolize) the British isles, arguably, strategically the prime real estate for TATL flights and with that, fares for the convenient flights will go up (e.g.JFK-LHR) and the surcharges will go up as well.
Ryanair, Easyjet, KLM, the Gulf carriers, Delta/Virgin, United, etc, carry considerable numbers of passengers from the UK and Ireland.

IAG would "dominate" only a small number of city pairs; together with, for example, the Dublin-Heathrow route.

Originally Posted by Guava
You better believe whatever monetary concession that the IAG makes to the Irish government will be passed on to consumers in the form of increased fares and surcharges.
Unless you mean that IAG will increase their offer - which would benefit ALL shareholders, not just the Minister for Transport/Irish Government, that can't, and won't, happen.

IAG is also very unlikely to increase the offer.
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Old Apr 16, 2015, 3:15 pm
  #198  
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Originally Posted by irishguy28
Ryanair, Easyjet, KLM, the Gulf carriers, Delta/Virgin, United, etc, carry considerable numbers of passengers from the UK and Ireland.

IAG would "dominate" only a small number of city pairs; together with, for example, the Dublin-Heathrow route.
A small number of city pairs indeed,but a red herring nonetheless. The most popular ones and principally JFK-LHR, the most travelled TATL route by any measures will be firmly in IAG's hands. Let's just say not many business travellers would be willing to fly JFK-LHR on Ryanair, not to mention they don't even fly that route or for that matter having to connect in continental Europe and backtracking back to LHR, adding hours to their journey.

By selling Aer Lingus (Dublin) to the IAG, the latter would quasi-monopolize all convenient traffics to/from UK since Virgin alone does not provide enough of volume to counter-balance the IAG cartel, therefore, IAG will get to set the price for JFK-LHR, which on its own account for more than half of the TATL business traffic from the heavily populated northeastern United States. No wonder Virgin is opposed to this sale of Aer Lingus to IAG because they will be crowded out by IAG.

Last edited by Guava; Apr 16, 2015 at 5:47 pm Reason: swap out an expression that can be viewed as insensitive
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Old Apr 16, 2015, 4:20 pm
  #199  
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Originally Posted by Guava
A small number of city pairs indeed,but a red herring nonetheless. The most popular ones and principally JFK-LHR, the most travelled TATL route by any measures will be firmly in IAG's hands.
JFK-LHR is already "firmly in IAG's hands".

EI is not a big player in that market, and adding EI to IAG would not appreciably alter the dynamics of the LHR-JFK market.

Originally Posted by Guava
] Let's just say not many business travellers would be willing to fly JFK-LHR on Ryanair, not to mention they don't even fly that route or for that matter having to connect in continental Europe and backtracking back to LHR, adding hours to their journey.
As you say, Ryanair doesn't fly from Heathrow; and doesn't fly across the Atlantic. But the budget-conscious traveller has Norwegian flying from London to New York.

The business traveller can already choose from Virgin/Delta, United, and the fellow oneworld JV partners AA/US when flying from London to New York. If a flyer doesn't want to add hours to their journey by connecting, they were unlikely to have wanted to connect in Dublin on EI, either.

Originally Posted by Guava
By selling Aer Lingus (Dublin) to the IAG, the latter would quasi-monopolize all convenient traffics to/from British Isles since Virgin alone does not provide enough of volume to counter-balance the IAG cartel, therefore, IAG will get to set the price for JFK-LHR, which on its own account for more than half of the TATL business traffic from the heavily populated northeastern United States. No wonder Virgin is opposed to this sale of Aer Lingus to IAG because they will be crowded out by IAG.
Aer Lingus predominantly attracts transfers from the British regions, and from the continent, onto its TATL services. As you say, the London region is more than adequately served by a range of direct TATL services on a range of carriers from all alliances.

Aer Lingus' network is complementary to that of IAG - the only routes that overlap are Dublin-London; Belfast-London; Dublin-Madrid and Dublin-Barcelona. So to focus on transatlantic issues is a bit of a red herring, too.

Looking at overall traffic across the Atlantic, EI is a small (but growing) player. Don't forget that each of the 3 main alliances also run dorect services from Dublin and Shannon to the US and Canada. IAG is unlikely to encounter any resistance to the proposed takeover on the basis of its transatlantic offering. The UK and Ireland are adequately served by a range of carriers across the Atlantic even outside the IAG fold. Given the tie-ups of recent years between the likes of United and Continental, Virgin and Delta [I suspect that you are unaware that Delta owns 49% of Virgin and is increasingly focusing on deploying Virgin capacity on new routes across the Atlantic and reducing VS's footprint in the rest of the world), and American and US - all of whom consolidated their transatlantic operations - then it appears unlikely that the level of "dominance" you suggest would be a cause for concern to the relevant competition authorities whose approval would be required for the deal to happen.

Virgin's intervention is also a red herring. They have never previously shown any interest in the Irish market or in the Irish consumer; their intervention is self-serving. Old Beardy has a hate-hate relationship with BA. If he truly was so concerned at the lot of the travelling public, and the diminishing of competition, then he perhaps should not have paired up with Delta.

By the way, the term "British Isles" is a term that does not find favour with Irish audiences.

Last edited by irishguy28; Apr 16, 2015 at 4:33 pm
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Old Apr 16, 2015, 5:50 pm
  #200  
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Originally Posted by irishguy28
JFK-LHR is already "firmly in IAG's hands".

EI is not a big player in that market, and adding EI to IAG would not appreciably alter the dynamics of the LHR-JFK market.

[..]

Virgin's intervention is also a red herring. They have never previously shown any interest in the Irish market or in the Irish consumer; their intervention is self-serving. Old Beardy has a hate-hate relationship with BA. If he truly was so concerned at the lot of the travelling public, and the diminishing of competition, then he perhaps should not have paired up with Delta.
Well argued, IAG should hire you as one of their lobbyists to the Irish Government.

By the way, the term "British Isles" is a term that does not find favour with Irish audiences.
My apologies, I removed it in my earlier post.
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Old Apr 16, 2015, 7:52 pm
  #201  
 
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Dublin Airport confirmed on Wednesday that Ethiopian Airlines is moving its European hub there from next month.
The African carrier has already announced plans to launch a service linking Addis Ababa and Los Angeles through the Irish capital in June.
A deal with the Government means that it has the right to pick up passengers at Dublin on both the outward and return legs of its Addis Ababa-to-Los Angeles service
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Old Apr 16, 2015, 8:06 pm
  #202  
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Today's news is about a technical stop for Toronto amd Washington flights at DUB (no passengers can join, or leave, these flights at DUB) from next month.

These flights currently stop in Rome for refuelling on the westbound leg; from May 10 they will instead refuel in DUB

By the way; it's probably going a bit far to say that ET is "moving its European hub" to Dublin. It does not have a hub...it flies from Vienna onwards to Stockholm and Addis Ababs; this continues even after they start flying from Dublin to LAX and ADD from mid June. DUB and VIE are just stopovers really...and DUB won't be able to board pax for Toronto or DC.

Last edited by irishguy28; Apr 16, 2015 at 8:21 pm
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Old Apr 17, 2015, 2:46 am
  #203  
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Aer Lingus takeover deal not sealed ye

Originally Posted by The Irish Independent
Transport Minister Paschal Donohoe has insisted that a deal hasn't yet been struck which would enable the Government to approve IAG's €1.4bn takeover of Aer Lingus.


Shares in Aer Lingus soared over 5pc at one point yesterday, as speculation mounted that the IAG and the Government had all but cemented an agreement to sell the State's 25.1pc stake in the airline to IAG.

But the share gains were pared back soon afterwards, as Mr Donohoe said that no accord had been reached yet and that it could still be weeks before the Government made a decision.

A very likely scenario now is that the Cabinet will make a decision at its meeting on April 28. Aer Lingus holds its annual general meeting on May 1, and would almost certainly have hoped the Government would have acted on the steering group report by that date.
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Old Apr 17, 2015, 6:29 pm
  #204  
 
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Originally Posted by irishguy28
By the way, the term "British Isles" is a term that does not find favour with Irish audiences.
Bit of a blanket assertion there.

It's certainly not employed by DFA or other government departments in an official capacity, but I'd wager it's still the most commonly used term when folks go about describing the islands of Great Britain, Ireland and the 5000 or so satellite islands that make up the archipelago.
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Old Apr 18, 2015, 4:48 am
  #205  
 
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Originally Posted by ZorbaTheGeek
Bit of a blanket assertion there.

It's certainly not employed by DFA or other government departments in an official capacity, but I'd wager it's still the most commonly used term when folks go about describing the islands of Great Britain, Ireland and the 5000 or so satellite islands that make up the archipelago.
How much would you like to wager? 😉
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Old Apr 18, 2015, 6:13 am
  #206  
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Originally Posted by ZorbaTheGeek
Bit of a blanket assertion there.

It's certainly not employed by DFA or other government departments in an official capacity, but I'd wager it's still the most commonly used term when folks go about describing the islands of Great Britain, Ireland and the 5000 or so satellite islands that make up the archipelago.
You won't find the term used much in Ireland, as you seem to acknowledge - that it is commonly-used elsewhere only adds to the antipathy that some feel towards the term.

It's almost as cringeworthy as when people - invariably British, in my experience! - refer to Ireland as "Eire".
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Old Apr 19, 2015, 12:46 pm
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British Isles is almost a guarantee to wind up quite a few Irish people, though sometimes you get a sense there is a bit of a "I'm meant to be upset by this, right?" to it. Like it's basically a cliche that Irish people hate any connection to Britain so sometimes some people feel obliged to live up to it in the most banal contexts.

I thought it was funny though when Neil Lennon described Scotland v Ireland in the Euro qualifier as a "very British game" a while back given the context around the Scottish referendum as well.
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Old Apr 21, 2015, 1:17 am
  #208  
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Aer Lingus report has still not gone to Paschal Donohoe

Originally Posted by The Irish Independent
Transport Minister Paschal Donohoe is still awaiting a report by the Government's working group into the potential sale of the State's stake in Aer Lingus.

<snip>

"Aer Lingus alone carries 40pc of the passengers in and out of our three main airports. It is one of the largest employers in our country," he added.
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Old Apr 21, 2015, 11:14 am
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Originally Posted by irishguy28
It's almost as cringeworthy as when people - invariably British, in my experience! - refer to Ireland as "Eire".
Well you can't blame us seeing as you put "Eire" on the coins, stamps and passports!
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Old Apr 26, 2015, 5:48 am
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.... & all the "Eire" signs that remain from WWII around the coastline.

http://eiremarkings.org
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