Ryanair's Aer Lingus takeover BLOCKED !

Beautifully put Andy!

He should have said “big feckin eejit” though !
😀

Oh look 10,000 posts !!! 😮

Based on reports elsewhere, sounds like the Tinkers have changed their interests and are now looking at Air Berlin rather than Aer Lingus!

Personally I think that Ryanair are a cancer that is dangerously infesting the airline industry, and I’d be only too pleased to see the Eejit blocked on this potential new takeover too.

Andy

Beautifully put Andy!

Based on reports elsewhere, sounds like the Tinkers have changed their interests and are now looking at Air Berlin rather than Aer Lingus!

Personally I think that Ryanair are a cancer that is dangerously infesting the airline industry, and I’d be only too pleased to see the Eejit blocked on this potential new takeover too.

Andy

But can there be guarantees that the same long-haul routes will continue to be operated? A bigger company (say, BA for the sake of argument) buys out that part of the company (getting the slots and a few A330s and whatever else) – what if they decide to shuttle people from Dublin to Heathrow, then long-haul them?

Just checking, and Aer Lingus do daily flights from Dublin to LA, New York, Boston & Chicago, probably more.

Thats 4 convention cities in the US – I reckon there would be a detrimental impact on the Irish economy if those flights were lost.

It would not be a point that the EU could consider. They are looking directly at consumer issues related to the markets in which FR and EI may be perceived to compete, that is to say the short haul European market. The fact is, if EI was just a long haul airline then this woudl never have got this far, it would have been rubber stamped long ago.

In actual fact there is no guarantee that these routes will continue to be served, but then there is no guarentee that EI will continue to serve the routes themselves, with or without FR as their owners (although we can assume they have no reason to drop them, but the point is that the airline could drop them if they wished, they would not need any approval to do so from their Government or the EU, and therefore it is a mute point). If BA or similar wanted to buy the long haul arm of EI then they would have to go through the same process that FR is going through at the moment, so the potential purchase would go firstly to domestic competition regulators, and then possibly (depending on the domestic views) to the EU to determine whether that would be an anti-competitve purchase. In actual fact, it would be unlikely to be determined as anti-competitive though because closure of the EI long haul routes from DUB would, by the nature of the airline market, allow new route introductions by other carriers, assuming that there are no barriers to entry, mainly regarding slots.

The EU are looking at the FR/EI merger because there could be a lack of scope for new entrants into the Dublin-Europe markets because FR/EI hold the lucrative slots. Mergers will often be allowed on the basis of ‘Remedies’, that is solutions to overcome the anti-competitive nature of a merger/acquistion. So for example, KLM/Air France had to give up 658 weekly slots at their combined airports, to allow entry onto routes on which they had previosuly been competitors. Lufthansa/Swiss had to give up 854 combined slots etc etc. The problem is that the remedy for FR/EI is probably too great to make the merger viable.

Well, no, it doesn’t make sense really. The EU would struggle to object on this point, because FR and EI do not compete in the LH market, and therefore by buying out EI, there would be no loss in the number of competitor choices available to consumers when selecting a long haul service. The fact that FR may choose to sell the LH product menas that there will still be the same number of competing airlines before and after the acquisition on the LH markets.

But can there be guarantees that the same long-haul routes will continue to be operated? A bigger company (say, BA for the sake of argument) buys out that part of the company (getting the slots and a few A330s and whatever else) – what if they decide to shuttle people from Dublin to Heathrow, then long-haul them?

Just checking, and Aer Lingus do daily flights from Dublin to LA, New York, Boston & Chicago, probably more.

Thats 4 convention cities in the US – I reckon there would be a detrimental impact on the Irish economy if those flights were lost.

Surley, this is one of the major reasons for the EU’s objections…as this would have a huge impact on Ireland as a country in itself and its economy, as this would mean that people would have to connect via London or another European hub, which surely would not go down well with the ‘time is money’ business traveller or even a tourist for that matter. Not sure about anyone else, but if I was visiting Ireland from a far-away country (take USA for example!) I would much prefer a direct/non-stop service to the country that I am travelling to, rather than having the hassle of connecting via airport and possibly another plane if the first plane was not doing the second leg of the journey!

Hope this makes sense?!

Do you not feel the same?

Well, no, it doesn’t make sense really. The EU would struggle to object on this point, because FR and EI do not compete in the LH market, and therefore by buying out EI, there would be no loss in the number of competitor choices available to consumers when selecting a long haul service. The fact that FR may choose to sell the LH product menas that there will still be the same number of competing airlines before and after the acquisition on the LH markets.

As for the benefit of LH direct services. In actual fact, to the business traveller, this is less of an issue, and is something I’m looking closely at for forecasting at the moment for some work I’m doing. The frequency of service needed to attract a high level of business travellers is quite high, suggesting that frequency is more important than a direct servcie, and therefore the benefits of frequency can be obtained through hubbing. That isn’t to say that direct services are not beneficial, but MAY be overstated in some cases, with too much reliance put on them. Its more of an issue for leisure travellers I think.

I have to confess to knowing quite a bit about the merger. The idea is that FR and EI will remain SEPERATE airlines. Ryanair view them as having distinctly seperate markets, and providing different things to different people, and therefore do not want to merge EI into their own ops.

They do however, feel that there is further scope for cost cutting at EI, without eroding the product (or making it the same as FR), and that this will benefit the Irish economy overall by providing a stronger carrier with which to serve the interests of business travellers to and from the country.

The long haul element of EI will be SOLD if the acquisition was succesful, as it does not fit the core market that FR beleive EI should be strengthened in.

Is that any help?

Thanks rdc1000, that does help…all but one bit.

The long haul element of EI will be SOLD if the acquisition was succesful, as it does not fit the core market that FR beleive EI should be strengthened in.

Surley, this is one of the major reasons for the EU’s objections…as this would have a huge impact on Ireland as a country in itself and its economy, as this would mean that people would have to connect via London or another European hub, which surely would not go down well with the ‘time is money’ business traveller or even a tourist for that matter. Not sure about anyone else, but if I was visiting Ireland from a far-away country (take USA for example!) I would much prefer a direct/non-stop service to the country that I am travelling to, rather than having the hassle of connecting via airport and possibly another plane if the first plane was not doing the second leg of the journey!

At present, I think EI has quite a strong long-haul product, although I have never flown on it, people who have used it must think it is a benefit to them when travelling?

Hope this makes sense?!

Do you not feel the same?

If he was ever successful in his attempt, can anyone tell whether he would run the company seperate to FR or would he merge the two together?

I have to confess to knowing quite a bit about the merger. The idea is that FR and EI will remain SEPERATE airlines. Ryanair view them as having distinctly seperate markets, and providing different things to different people, and therefore do not want to merge EI into their own ops.

They do however, feel that there is further scope for cost cutting at EI, without eroding the product (or making it the same as FR), and that this will benefit the Irish economy overall by providing a stronger carrier with which to serve the interests of business travellers to and from the country.

The long haul element of EI will be SOLD if the acquisition was succesful, as it does not fit the core market that FR beleive EI should be strengthened in.

Is that any help?

WHy cant that stupid Irishman accept that he cant take over aer lingus

Here here,i could not have put that better myself:D

I dont understand why he is trying to takeover Aer Lingus. Although I have never flown with them, I dont think that it would be a good thing for Aer Lingus to be taken over as that would mean lots of changes and possible job losses, which could upset alot of people!

If he was ever successful in his attempt, can anyone tell whether he would run the company seperate to FR or would he merge the two together?

Firstly I’m biased against so called low cost carriers anyway so no surprise that I would not like to see this happen. That aside would this ‘merger’ be in the best interest of the Irish consumer? Would it not simply lead to an ‘Irish Aeroflot’ monopolistic operation? The very same thing that MOL used to rail against at news conferences and paint on his jets. Aer Lingus has a well deserved and sound reputation around the globe…..if I were Irish I’d want to keep it that way, I’m with the EU on this one.

WHy cant that stupid Irishman accept that he cant take over aer lingus unless he has about 60-80% shares in the company

LOL, you clearly do not understand the process taking place here. RYR are seeking EU Competition Clearance to purchase a majority stake. As one of the best businessmen and accountants (his background) around, I think he understands how to buy a business, do you honestly think the company do not undestand this??:dev2:

It is not as simple as just buying as many shares as possible, because they would just have to sell them again if the purchase was viewed as anti-compeititve. The EU CC are going to struggle I think on an appeal in the courts and RYR will make them pay heavily. Just need to look at mergers such as TAP/Potugalia (which was approved domestically without the EU CC getting involved) to realise that there are more anti-competitive mergers that have been approved.

I’d reckon Bertie Adhern wouldn’t let them take-over anyway.

It’d be something similar to the Guinness thing – when they were took over, Dellagio were going to move Guinness production from St. James’ to Belgium or somewhere – Bertie put the boot down then, I’d expect him to do the same here.

WHy cant that stupid Irishman accept that he cant take over aer lingus unless he has about 60-80% shares in the company

It sounds nicer… Andrewm