Sep 28, 2016, 2:57 pm
Last edit by: JDiver
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 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
"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
Link to Wikipedia article about Aer Lingus
Aer Lingus IAG take over bid [Master Thread]
Dec 18, 2014, 8:38 am
#1
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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
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
Dec 18, 2014, 9:24 am
#2
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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
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
Dec 18, 2014, 4:53 pm
#3
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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.
Dec 18, 2014, 5:02 pm
#4
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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 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.
Dec 18, 2014, 5:59 pm
#5
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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.
Dec 19, 2014, 2:09 am
#6
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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.
Dec 19, 2014, 2:26 am
#7
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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...
Dec 20, 2014, 8:58 pm
#8
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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.
Dec 20, 2014, 9:00 pm
#9
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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
Dec 20, 2014, 9:09 pm
#10
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Dec 21, 2014, 9:47 am
#11
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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.
Last edited by irishguy28; Dec 21, 2014 at 9:53 am
Dec 25, 2014, 4:42 am
#12
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CAPA analysis
IAG's 18-Dec-2014 announcement that it had offered to buy Aer Lingus four days earlier was a surprise. At no time since the Irish airline's 2006 IPO had anyone other than Ryanair shown interest in acquiring Aer Lingus. Moreover, with only 1% of seats to/from Europe controlled by Aer Lingus, this deal would make little difference to market concentration in the region, where consolidation has lagged North America.
However, Aer Lingus has two key attractions to IAG and its CEO Willie Walsh, an ex-CEO of Aer Lingus: an important holding of slots at London Heathrow, the main hub of IAG's British Airways, and a high growth strategy on the North Atlantic, which is BA's key long haul market.
Probably to the relief of both companies' advisors as the holiday season approached, Aer Lingus rejected the offer on the grounds that it fundamentally undervalues its business. Nevertheless, a convergence of factors makes it likely that IAG will return with another offer. Mr Walsh is an old acquaintance who does not wish to be forgot...
However, Aer Lingus has two key attractions to IAG and its CEO Willie Walsh, an ex-CEO of Aer Lingus: an important holding of slots at London Heathrow, the main hub of IAG's British Airways, and a high growth strategy on the North Atlantic, which is BA's key long haul market.
Probably to the relief of both companies' advisors as the holiday season approached, Aer Lingus rejected the offer on the grounds that it fundamentally undervalues its business. Nevertheless, a convergence of factors makes it likely that IAG will return with another offer. Mr Walsh is an old acquaintance who does not wish to be forgot...
Dec 25, 2014, 7:50 pm
#13
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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.
Dec 26, 2014, 6:29 am
#14
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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?
From a competitive standpoint, would they need to allow another airline slots at LHR to operate DUB-LHR?
Dec 26, 2014, 6:38 am
#15
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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.
Also, US is now in oneworld as well.