Aer Lingus IAG take over bid [Master Thread]
 

Interesting news !

Shares in Aer Lingus rose by almost 10 per cent in afternoon trading on Thursday after reports that IAG, is considering a takeover offer for the airline.
Quoting people familiar with the situation, the Financial Times said that IAG, the parent company of British Airways, would gain a number of valuable take-off and landing slots at Heathrow if a deal was successful.
Any agreement would need the backing of both the Government, which holds a 25 per cent stake in Aer Lingus and rival Ryanair, which has a 29.9 per cent stake in the airline.

http://www.irishtimes.com/business/t...-bid-1.2042517

IAG did make an approach
http://www.independent.ie/business/i...-30847691.html

Willie Walsh in the past wasn't eager to buy EI, but I imagine EI's grabbing a slice of UK TA business has hit the IAG bottom line

Aer Lingus shares jump after rumoured IAG bid
 

As much sense as this deal might make (and, IMHO, it makes a lot of sense), Ryanair and the Irish government will put the mockers on it, I have no doubt.

My son sat next to an Aer Lingus pilot who was positioning today. He told him to expect an announcement about BA taking over some routes from Aer Lingus tomorrow, hinting at Dublin being part of this. This after we knew Aer Lingus had turned down the IAG bid.

I was thinking ludicrously optimistic thoughts about a further comp to BA Exec having had same with the demise of BMI in 2012! Or maybe just more OneWorld earning opportunities from Ireland. Agree with OWdevotee on potential benefits. Personally I would not want to see the demise of Aer Lingus, but Gold Circle is a very limited reward program.

I can see WW deciding that he'd like to give KLM a run for their money in connecting the British regions to transatlantic flights. And a DUB hub is perfect for that -- you get preclearance, a shorter flight than AMS will give you, and you don't have to clog up Heathrow with a bunch of short flights. Couple that with Brits saying 'it's BA, that's our airline' and he could actually make more money on it. Plus he has a good opportunity to further reduce UK domestic flying and keep more of the slots at LHR for medium/long-haul.

Will they?

The only route on which BA and EI compete in the ROI is DUB-LHR. A far more likely remedy is requiring BA to divest slots on the route.

Aer Lingus shares jump after rumoured IAG bid
 

FR will not be allowed to buy EI. MO'Ls main aim is to get the best value for his shares. For him a BA bid is useful. For BA the main reason for a bid are the slots at Heathrow, although they could do some cool things with DUB T2...

Good point. Had not thought of that move

Not a huge fan of this takeover plan. Finally DUB is getting mixed in with the best BA J sales, but if this goes through, I suspect it will be back to the days where BA treated ex-DUB as Domestic UK. Still better than FR takeover

There goes that idea then! :D

But it would not be BA - it would still be Aer Lingus. Unless you're suggesting that "Brits" currently say: "it's BA, that's our airline" when they step onto Iberia and onto Vueling aircraft.

An Aer Lingus takeover would not result in a further reduction of UK domestic flights. The idea of sending pax from the UK regions to JFK, BOS, ORD, SFO, YYZ, MCO and IAD via DUB may indeed be appealing, but using this as an excuse to reduce connecting opportunities for UK regional pax at LHR wishing to connect to BA's extensive global network would not make much sense.

I'm not sure how "he" (you mean WW?) could "actually make more money on it". If you mean EI fares could be raised just because of the sort-of-BA badge and the attraction of full Avios and TPs, then I think the number of people who may be attracted solely by the IAG connection would in no way compensate for the loss of existing EI customers who would react negatively to a price hike and who currently, clearly, are not guided in their purchases by FFP concerns (because Gold Circle is a terrible FFP!).

I don't see an IAG takeover having any drastic effect on BA's operations at LHR. Of course, there would be a rationalisation of the DUB-LHR BA/EI services. But there would be no resultant rationalisation of BA's domestic network in some bid to funnel BA pax onto EI services at DUB.

Unless they totally transform DUB into a major longhaul (not just USA) hub.

CAPA analysis
 

A BA takeover would probably mean joining OneWorld, wouldn't it? And with that it's inevitable that the current codesharing agreements with non-OW airlines for example KLM in Europe and UA and Jetblue in the U.S. would be toast as well (i.e. onward travel in the U.S. from Aer Lingus flights would be with AA only). And in Europe you wonder how it would affect a flight like ORK-AMS which to some extent lives off Amsterdam's hub capabilities toward the rest of Europe, Asia and Africa. It would probably make sense to cut it then and replace it with an additional flight to LHR.

On an average day EI operate 12 flights each direction on DUB-LHR and BA operate 8 for a total of 20. Between 0700 and 2100 this would be one flight every 42 minutes. Surely they could go to one flight every hour with larger aircraft and free up 6 slots. This would be 14 round trips total, an increase in frequency from both the EI and the BA perspective.

From a competitive standpoint, would they need to allow another airline slots at LHR to operate DUB-LHR?

I doubt it's as inevitable as you think.

Also, US is now in oneworld as well.