Comments on: AAAaaaagh

By: Gerry

Gerry — Fri, 06 Oct 2006 11:36:28 +0000

the point is Sarah that they re not going anywhere – they are not Aer Lingus’ to sell. If you want them you can buy the airline but if you choose not to operate them then you can’t just go, oi American, how much for the slots? Theoretically they would simply return to the control of BAA and get reassigned, with no money for AL. So they are only AL’s great asset should you choose to operate them, but operating into heathrow does not suit Ryanair’s current model.They could change it of course They cannot, contrary to rumour, strip them out and flog them on.

By: Tony Allwright

Tony Allwright — Fri, 06 Oct 2006 10:59:44 +0000

I loved loved this morning’s Irish Times piece which included this …

“In a conference call for US investors yesterday, Mr O’Leary was questioned about the wisdom of the takeover approach for an airline whose cost base is significantly greater than that of Ryanair.”
(http://www.ireland.com/newspaper/finance/2006/1006/1158591432871.html)

That ignorant question highlights the glorious thing about O’Leary’s brash takeover bid. He knows how to run an airline at minimum cost. Aer Lingus’s unit costs are multiples of Ryanair’s. So once he gains control (ie 51%), he can make a fortune simply by slashing Aer Lingus’s costs and pocketing the difference. And he still has the option of expanding intercontinentally or of simply selling Aer Lingus at a profit that thanks to his cost-cutting will be very substantial.

Of course it’s not going to be so much fun for Aer Lingus management, unions and perhaps staff, having to face up to true market realities.

By: leon

leon — Fri, 06 Oct 2006 10:44:11 +0000

I don’t see the problem, it is just one company buying another and at a good premium. If the Aer Lingus board don’t accept it they should be sacked.

By: Andrew

Andrew — Thu, 05 Oct 2006 18:18:04 +0000

Gee, this privatisation thing is going well! What we need now is another national asset we can give away…but where to look?
I’ve got it! This morning I went to work on a clean, new, punctual Dublin Bus, with a (reasonably) well-paid driver and one of the lowest levels of taxpayer subsidy of any European capital.
Clearly it’s a chance to:
a. Sell this national asset to a few ‘investors’, at a knockdown price.
b. Square the current cohort of employees with a big shareholding.
c. Throw up our hands in wonder when, in a couple of years, I’m waiting for a rustbucket, driven by a demoralised, deunionised contracted driver on my unprofitable route – and some grinning plutocrat is being slapped on the back by the business correspondents for spotting ‘value’ and stripping it outI.
‘ll be happy to wait, of course, because any other attitude would be begrudgery or, worse, socialism.

By: Sarah

Sarah — Thu, 05 Oct 2006 16:07:38 +0000

well Gerry, personally I don’t give a shit whether or not the landing spots at Heathrow make Aer Lingus profitable or not. I just want them there so I can a) get to London city in 15 minutes on the Express and b) change conveniently for international flights. I’m not trekking from bloody Stanstead to Heathrow to make a flight.

By: Gerry

Gerry — Thu, 05 Oct 2006 15:27:25 +0000

re: landing spots at heathrow – many many airlines losing millions of millions of pounds have landing spots at heathrow. If I hear one more person going on about heathrow landing spots as if they were the the holy grail I’ll go spare. It doesn’t suit Ryanair’s business model to have landing slots at heathrow.

Anyway this all seems ill-conceived. It could be blocked by a mergers committee for one which is presumably why O’Leary is saying:”This offer – if successful – means both companies will continue to operate separately and compete vigorously in the small number of routes on which we both operate” Yeah that’s right Michael, that alway happens, two ferocious competitors with the same owners.

But it is worth a shot, all he’s done is transfer some flush fund money into a specific stock and put the wind up a competitor. He might even win and we can all go back to paying 1985 prices for our trips to london sans benefit of the Aer Lingus brekkie, whcih was delicious.

By: fmk

fmk — Thu, 05 Oct 2006 14:50:16 +0000

there was a valid reason for pricing toward the low end of the range, and that was to stop speculative hedge funds getting on board and crashing the share price. the price was set based on demand at that price.

for sure, the govt missed the notion that a take-over bid could be launched so soon. but then … point to one journalist or blogger who suggested that a takeover would be launched with such speed.

By: Sarah

Sarah — Thu, 05 Oct 2006 14:48:42 +0000

I was proudly anti-privatisation

By: P O'Neill

P O'Neill — Thu, 05 Oct 2006 14:37:00 +0000

The poor government. They overpriced Eircom and burned the general public. They underpriced Aer Lingus and burned themselves, if not the the investors who got to buy in at the IPO price.

By: Donagh

Donagh — Thu, 05 Oct 2006 14:27:48 +0000

I was laughing too, at the audacity and kicked myself that I didn’t see it happening. In hindsight it makes perfect sense. All O’Leary needs is 51%, and has said that he’s perfectly happy for the government to hold on to it’s paltry 21%. Considering the EU competitions rules some major airline was alway going to buy it, but this also tells us what a lie we are all living thinking that we’re free citizens with an equal voice in a democratic society. We’re just powerless consumers with an ever reducing number of choices. That said, I don’t blame Ryanair for a second.