What will probably happen to Aer Lingus

Crystal Ball watching:

IAG buy at 2.40 to 2.50 per share.
Pension issues are magiced away.

IAG become only operator between Dublin and Heathrow and fares go up(irony here being that Ryanair weren’t allowed take over Aer Lingus due to competition reasons)

Militant Aer Lingus staff make 60 or 70k each on shares and disappear over the horizon on early retirement schemes with lump sums.

After the existing long-serving militant staff get paid off the ladder is pulled up and the younger staff and contractors enjoy the sort of working conditions and pay that would make Ryanair look cushy.

They’ll re-assign the Heathrow slots to other routes, put a larger A330 on the route which leaves at an earlier inconvenient time slot so that it looks like the same number of passengers are still flying though heathrow but either the passengers have to wait around with nothing to do while waiting for a connection or miss connections completely and don’t travel at all due to poorer service on the dublin-heathrow route. That’s not good for Ireland, for business or the travelling public.

cf.broadsheet.ie/wp-content/uplo … e-352.jpeg

Waterford Crystal has set a massive precedence.

If you can asset strip Aer Lingus and make the protected workers the taxpayers problem, you’re on to a winner.

Yes, free market liberalism; the answer to, and source of, all earth’s problems.

According to the IT the pension issue with DAA is close to resolution. A new increased bid will put Ryanair on the spot. They don’t really need the money, so their holding looks more strategic than economic.

Once sold, Ryanair, will launch price wars on any routes shared with or near routes operated by Aer Lingus.
9.99 and 14.99 euro fares to Britain will be a more regular occurence.

Listen financial services fellow (or whatever it is you claim to do), you’re in no position to be throwing stones…

Denis O’Brien’s impeccable timing of the equity markets strikes again

irishexaminer.com/business/o … 81846.html

rte.ie/news/business/2006/10 … aerlingus/

Au contraire, I’m in the perfect position to throw stones - which is why I do so.
Working at “whatever it is I claim to do :laughing:” has given me great insight into the typical social destruction caused by so-called “financial engineering” - which is usually just * engineering* further wealth away from the masses and into the pockets of the empowered.

My job doesn’t define me, but it does inform me.

Fair enough :smiley:

The claim bit was in reference to me being unclear on what precisely you do!

I think that financial engineering and true free market liberalism is perfectly fine so long as a government takes/steals a big percentage of the gains, and hands them over to the unwashed.

The financial problems are caused almost solely by corrupt or incompetent government decision makers who give free insurance to the financial world, interest free loans to banks, and implicit guarantees to private and semi-sector pension funds, etc etc etc etc.

The papers seem to think this is a done deal, however the share price should be closer to the expected offer price of 2.50 or so if the market was as confident.

It’s interesting that there seems no resistance to this offer. One of the big arguments against Ryanair was they just wanted the Heathrow slots - a national asset seemingly. That’s a much bigger issue with IAG - there’s no way they’ll allocate all those slots to Irish flights, possibly Ryanair even promised they’d keep those Heathrow slots for Irish flights?

Ryanair should manage to get a good deal if they sell their stake, I think they’d heavily written down the investment on their books - even though you’d imagine any attempt to secure some of the Heathrow slots as part of the deal would be stymied by the Irish government, SIPTU, EU commission, UK quango, UN …

I thought the expectation was that Ryanair would sell the LHR slots because they’re on record as saying there are only four airports in Europe they have no intention of ever flying into because of the associated fees, LHR, CDG, FRA, AMS.

A bunch of the EI LHR slots are rented out to United etc atm. But I can’t imagine a single carrier on DUB-LHR that would be back to the old days.

I can’t see it myself (based mainly on competition concerns). Etihad (who hold a minority stake) are a more likely suitor I reckon.

Latest offer for Aer Lingus will probably be accepted.
Are the Government going to use the windfall to buy the next election or pay down debt.

Paying down debt and refinancing of debt could be presented as being prudential and win votes but I don’t think it is in their mindset to do such things.

Last weeks SBP mentioned that Ryanair (who originally bid 2.80 I think) could stand to benefit as IAG+AL may need to free up Heathrow slots for competition reasons. Even ignoring competition RA are in a position to negotiate.

RA despite previous statements are now showing some interest in flying to Heathrow.

Ryanair’s shareholding seems to have proved to be the correct strategy, they get a say in the sale, and may even make a profit on the shares.

It would be amusing if this sale results in RA taking over some of the Ireland to Heathrow routes. A nightmare scenario for la-di-dahs who may need to consider the ferry instead.

The ferry is not the point. Lack of interline agreements is the point.

Just this week Ryanair was talking about becoming a feeder airline for transatlantic services, MO’L was talking about arranging flight times to suit US flights, but they’ll do what it takes to fill flights. I’d expect if RA took over AL routes to London you’d get similar agreements.

Ryanair has to adapt and do things they’ve never considered before, those new planes they’ve arriving over the next few years need filling.

Ryanair are pissing in the wind I reckon. They’re saying they’d operate without interline agreements. That means that if you miss your connection, you are liable, not the delivering airline.

So you’re travelling dub lhr JFK return. The Ryanair flight dub lhr is delayed by ATC. You miss your outbound to JFK. Your return is also cancelled because they’re a pair. You are stuck in London until you buy new flights or wait for your return to dub.

bbc.com/news/business-30967346

The headline is a little misleading, I think. The board cannot accept an offer, they can only recommend acceptance to shareholders, no?

I’m a bit surprised. BA (IAG is BA, whatever the name) has a history of swallowing small airlines and disappearing them. Most recently BMI, but previously Dan Dare, Brymon, and BCal. Still, Aer Lingus doesn’t have ‘British’ in its title, so that might save it…

Benefits - better connectivity through Heathrow; procurement scale; alliance ‘weight’.
Costs - job losses; loss of frequencies for the better connectivity; uncertain long-term future as a separate brand; loss of some existing alliances that don’t fit in with BA’s strategy (e.g. JetBlue, Etihad)?