This amused us a lot–from the free British e-newsletter from Airline Fleet Management.
Pesky pursuer Ryanair claims Aer Lingus is a done deal
Ah, Ryanair. It’s like the Granny no one wants a sloppy kiss from, or the colleague no one wants to sit next to at the Christmas dinner. In fact, many of its hardened customers don’t really like it that much. Bottom of the friends list though is Aer Lingus.
To Aer Lingus, Ryanair is a sleazy old man with relentless ambition and bad intentions. Despite continuous rebuttals, it keeps trying to woo, or win Aer Lingus by force.
Ryanair now says it is “confident” that its €700m takeover bid for Aer Lingus will gain approval from the European Commission, despite the regulator recently sending the airline a list of objections based on rules governing competition.
The carrier said it has devised a number of remedies, including: “new airline bases in Dublin, new entrant competitors on over 40 routes to/from Dublin, Cork and Shannon, as well as specific competition solutions that guarantee increased price competition”.
It has until December 31 to finalise these plans before the watchdog makes its final decision.
Ryanair already owns 30 per cent of Aer Lingus and has had two failed attempts at a takeover. In 2007, the Commission turned down a bid for completion issues and in 2009, Ryanair dropped its second bid.
Poor Aer Lingus, when is it going to convince Ryanair that ‘no means no’?
Mary-Anne Baldwin, Editor, Airline Fleet Management
Very good description of things 😀
Living in Ireland and relying quite heavily on a) healthy competition on routes to/from this island and b) airlines not treating their passengers like foolish kettle I do hope that this merger does not go through.
Nothing new in Ryanair’s proposed remedies, either.
As far as I understand, the EU competition commission didn’t even bother to talk to the airlines Ryanair allegedly approached about this, which indicated that even *if* (big if) there are enough airlines willing to take that plunge, it wouldn’t really satisfy regulatory requirements anyway.
Furthermore, as Aer Lingus’ CEO Christoph Mueller recently said: “Let’s do a reality check […] Who on earth would voluntarily enter the market to compete with Ryanair? You need to have a cost position which is at least on the same level in order to compete on price. Ryanair is the cost leader in Europe.”
I might add two points:
1) Any airlines that feel they want to compete on Aer Lingus/Ryanair routes surely wouldn’t need an invitation from Ryanair to do so. Much less so an invitation with intentions that primarily serve Ryanair’s interests.
2) There is no guarantee that any airline that is invited to compete with Ryanair would actually do so for too long. Witness the bloody nose Easyjet got – followed by a swift retreat – when they tried to take on Ryanair on routes to/from Ireland. So this approach isn’t really a remedy for competition concerns.
3) Given that last point, I can’t see any concessions on Ryanair’s part going through that do not consist of legally binding commitments to reduce their own capacity on certain routes in order to effectively give competition some breathing space. Which Ryanair will not commit to.
Summary: Ryanair has already – as they always do – drummed up a lot of PR noise about their “revolutionary”, “unprecedented” etc. measures to address competition concerns. The EU competition commission will still reject the takeover bid unless Ryanair commits to something a lot more substantial – which Ryanair are not going to do. Cue some more PR noise about being treated unfairly.
Just look at how they responded to the previous rejection of the merger, Aer Lingus not giving up Hangar 6 at DUB, and Boeing not wanting to accept the conditions Ryanair demanded for new planes. It’s always a big song and dance, and it’s always exclusively the other party’s fault, not Ryanair’s. Keeps them in the news, I suppose…
An additional note: “specific competition solutions that guarantee increased price competition”
*Price* competition, mind you. As if that was the only type or level of competition there is.
Say what you want about MOL but at the end of the day, he’s shrewd and he’s made FR a very profitable carrier-and that’s the bottom line.
Never mind that even that is debatable, as Ryanair arguably profits heavily from the heavy subsidies given to the small airports they primarily fly to.
But in any case, what has all that to do with competition concerns regarding a proposed takeover of Aer Lingus by Ryanair?
In spite of everything, people want to travel on Ryanair, which I guess is what competition is all about. In my experience,Ryanair is a well run airline. More so, probably, than Aer Lingus. I do have a sentimental regard for that airline, which is something you could never have for Ryanair. With Ryanair it’s hate/hate, not love/hate, but we fly with them anyway.
Of course, they offer a low fare. Ryanair works when everything goes as planned, and you don’t intend to buy extra stuff, or expect more than a bare minimum of service with out having to pay extra. However, all you need is one bad happenstance and your minibreak to Ibiza is completely ruined.
I don’t think that Ryanair is necessarily a much better-run airline than Aer Lingus. Not just in terms of how they treat their staff and staff in turn treats passengers.
Also in terms of Aer Lingus being profitable despite
* being a pretty small airline
* operating out of a pretty small country
* having pretty fierce competition (namely Ryanair)
* having a much higher cost base than its main competitor
That’s a pretty impressive track record, actually.
Personally, I don’t fly with them.
I also somehow can’t see my company (or others) inviting customers to come over to Ireland on Ryanair.