Aer Lingus rejects IAG offer again

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  • Anonymous
    Guest

    WillieWelsh
    Participant

    It seems that Aer Lingus have very sensibly rejected a higher bid from IAG.

    http://www.bbc.co.uk/news/business-30754237

    I really hope this offer does not ever come to pass, it would be dreadful for IAG to dominate LHR any more than they do already.


    transtraxman
    Participant

    IAG´s bid for Aer Lingus is quite logical, even if not desired by some.

    http://centreforaviation.com/analysis/aer-lingus-rejects-iags-bid-but-an-old-acquaintance-should-not-be-forgot-iag-will-be-back-203062

    The obstacles are quite clear. Would there be a restriction on competition between London and Ireland? On flights from LHR the answer is clear but on city pairings the main competition is between Aer Lingus and BA against Ryanair and Easyjet(Belfast).
    However, since Ryanair already owns 29.9% of Aer Lingus Does not that danger already exist?

    The Irish government would not look kindly on any reduction of Aer Lingus flights into LHR from any of the Republic´s airports (remember the hoohaa created by the reduction of flights to/from Shannon).
    Thus I see that BA would consolidate its position on the routes by reducing its own frequencies or even withdraw from Dublin(as previously) – Belfast might be a step too far politically to withdraw from.

    Little Red´s slots are also up for grabs. Virgin Atlantic closes its routes from March and if there are no takers to substitute Little Red(operated by Aer Lingus) then thay revert to BA.

    http://news.airwise.com/story/view/1412598420.html

    In those two ways BA could increase the number of slots for other destinations.

    The shareholders could be a problem. The Irish government´s 25% share might well be sold under the right conditions, and price, as already stated. Ryanair would probably be glad to sell without losing money on its stake, as it is being forced to do at the momemt. This would enable O´Leary to consider seriously the purchase of Cyprus Airways,(as he stated previously) or at least its assets after its closure.

    http://www.bbc.com/news/business-30754232

    http://www.bbc.com/news/business-28949826

    The unknown element is Etihad which has a 4.9% shareholding. Would it make a serious attempt to take over Aer Lingus(to a maximum permitted 49%) to consolidate into its alliance or would it accept the inevitable if the Irish Government and Ryanair jumped ship?

    In my view IAG will win through. Dublin will be promoted as a gateway to the USA and Canada, especially from the UK regions to protect BA from the transatlantic flights from Paris, Brussels, and Amsterdam. After all BA would just be looking after its own back yard.

    Edited: 17-1-15
    http://trans-trax.blogspot.com.es/2015/01/more-on-ba-iag-s-way.html


    BAGoldcard
    Participant

    Thanks transtraxman.

    An informative and interesting post.

    As long as the acquisition of EI is a benefit to the IAG shareholders and UK/ Irish passengers, to whom IAG will need to win over, I will be happy if IAG succeeds ultimately.


    AMcWhirter
    Participant

    According to telegraph.co.uk IAG may have to offer as much as Euros 1.6 billion for Aer Lingus.

    http://www.telegraph.co.uk/finance/newsbysector/transport/11337250/IAG-may-have-to-pay-as-much-as-1.6bn-for-Aer-Lingus-says-activist.html


    ImissConcorde
    Participant

    Interesting in that Telegraph article to see mention of US-DUB-SE Asia routings. Anything that frees up space for more point to point traffic ex LHR, with increased revenues, can only be a good thing.


    SimonS1
    Participant

    It does have quite compelling logic. A second hub which could bring the regions back into play for IAG.


    AMcWhirter
    Participant

    Agreed. And especially for transatlantic services.


    AMcWhirter
    Participant

    Ryanair says it expects a renewed IAG bid for EI this week.

    http://www.reuters.com/article/2015/01/13/uk-aerlingus-m-a-aig-ryanair-idUSKBN0KM12L20150113


    PeterCoultas
    Participant

    it was bad enough when BMI were gobbled – loss of both little red and EI will be a disaster – maybe in europe BA are not too bad but world wide????


    MrMichael
    Participant

    As I said in another thread, I actually think an IAG takeover of Aer Lingus would be good for those not travelling from the LHR catchment area. It will as Alex says be good for those travelling west and will give BA an excellent springboard to allow not only flights from the regions in to the USA via Dublin but also from LHR as they will have the pre-clearance at Dublin. As I live in SW London it will probably not effect me a great deal (although the pre clearance may make it attractive if connections are good like LCY/Shannon) but from Birmingham, Manchester, Glasgow, Edinburgh and a few other places BA will be able to offer an excellent service with decent returns. Makes IAG a buy in my view. Wonder if they will keep the Aer Lingus brand???


    transtraxman
    Participant

    Aer Lingus will stay as a seperate company just as BA, Iberia and Vueling are seperate within IAG. It is Irish in origin and Irish it will remain since that is what it plays upon with its IrishAmerican customers
    The synergies will come backstage with aircraft and services procurement.

    I am sure a lot of passengers from the regions, especially Scotland, will be most satisfied to fly Aer Lingus rather than BA and especially since they would enjoy US Border clearance in Dublin (or Shannon).
    Look at the “where we fly” map covering the UK and you see so many destinations to/from Dublin, 18 if my counting is correct, quite a few of which do not have flights to LHR.

    It is a win-win solution in my view.

    “Ryanair looking to offload Aer Lingus stake”
    (Travel Weekly 14-01-15)

    http://www.travelweekly.co.uk/Articles/2015/01/14/51802/ryanair+looking+to+offload+aer+lingus+stake.html


    canucklad
    Participant

    If I was an Irish citizen/resident I’d be wanting to know what the long term plans for Aer Lingus. And for that matter, how an EI takeover impacts how BA provides services to us in the UK.

    For example, if I was an Irish customer my primary concern would be the loss of frequency on Dublin to North American routes, unless EI was allowed to join the “cartel arrangements” with AA & BA, because if I was Willie Welsh I would be awfully tempted to drive premium long haul traffic through LHR regardless of whether its eastbound ,southbound or ironically westbound.

    I’d also be tempted to gradually dissolve the BA European & domestic operation, and replace those routes with the cheaper EI version replicating their LGW model. at LHR minus the point to point aspect of that operation..

    And if I was representing the Irish government I’d be seeking assurances of EI’s continued presence in the US., and importantly those slots at LHR, particularly …the regional Irish slots. I would definitely seek assurances that BA isn’t going to be made stronger at the expense of EI


    SimonS1
    Participant

    I don’t see it that way – I think it would offer IAG an alternative hub for the US. For example people would be able to fly from Birmingham to the US via Dublin, with pre-clearance a possibility as well. Right now I would prefer Dublin any day to the grim experience of transit in T5.

    The most compelling logic is that it will clearly take years if not decades to deliver extra runway capacity in the London area, so clearly if the airline is to continue to grow it needs a second hub. I could see this opening up more long haul routes from Dublin, not less.

    It may be that the EI model for short haul will come into play, then again BA is steadily downgrading its own proposition (hence CE cuts) and will get there eventually. If it isn’t EI model it will be Vueling model or something else.

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