Ryanair launches bid for Aer Lingus

[Pieter C. 5]

Would not be comfortable flying with them, given the pitch and high load-factor

 

Ryanair Load Factor 83 Percent For 2006

 

January 4, 2007

Irish low-cost airline Ryanair said on Thursday that it carried 3.36 million passengers in December or 19 percent more than in the same month of 2005 but its planes were not quite as full as the previous year.

 

Europe's biggest budget airline said its load factor was 81 percent last month versus 82 percent in the same month of 2005.

 

For 2006 as a whole, Ryanair said it carried 40.5 million passengers and had an overall load factor of 83 percent.

 

(Reuters)

 

[Pieter C. 5]

EU To Bar Ryanair Bid For Aer Lingus

 

May 30, 2007

The European Commission, in a highly unusual move, is expected to reject Ryanair's proposed purchase of rival Irish airline Aer Lingus, sources familiar with the situation said on Wednesday.

 

The prohibition of Ryanair's unsolicited offer, originally valued at EUR1.48 billion euros (USD$2 billion), will be only the 20th in more than 3,000 cases reviewed by the European Union's executive arm since 1990, and the first since 2004.

 

The competition department prepared a proposed decision to present to the full Commission before a July 4 deadline, after a market test found Ryanair's latest proposed remedies for competition problems were insufficient.

 

Ryanair Chief Executive Michael O'Leary has said he would challenge the Commission in court if the deal were turned down. The decision runs to more than 300 pages in an effort to deal with issues that may end up in court, one of the sources said.

 

Commission competition spokesman Jonathan Todd declined comment on the investigation until a final decision is taken.

 

The EU regulator said in a confidential charge sheet known as a statement of objections in March that it was concerned about the deal's impact on competition, especially at Dublin Airport.

 

It noted Aer Lingus, the Irish flag carrier, and Ryanair, an insurgent no-frills airline, were head-to-head rivals and the number of routes on which they competed had risen to 37 from eight over the past six years, driving prices down 5 to 8 percent.

 

Ryanair, whose bid lapsed automatically when the Commission launched an in-depth investigation of the deal in December, said in a confidential offer it would make space for a new rival to base as many as six planes at Dublin Airport.

 

It also offered to sell Aer Lingus' slots at London's Heathrow and Dublin for flights between the two airports.

 

The Commission considered that would not solve the problem.

 

Even if the Commission had approved the Ryanair deal there would have been problems because the Irish government, which holds 25 percent of Aer Lingus, opposed the transaction. So did several other stockholders.

 

Ryanair's O'Leary has been commenting on the proposed deal throughout the bidding process.

 

At one point he said the company would consider a second bid for Aer Lingus if Ryanair received a favorable outcome from the EU review and the Irish takeover panel. But he had also said he expected the deal to be blocked.

 

Once the deal is blocked, the European Commission may not be finished with Ryanair. It has laid the legal groundwork to force Ryanair to sell some or all of its one-quarter holding in Aer Lingus. O'Leary has said he intends to keep the 25 percent.

 

(Reuters)

 

[Pieter C. 5]

Ryanair Orders 27 More Boeing 737s

 

June 1, 2007

Irish low-cost airline Ryanair said on Thursday it had bought a further 27 Boeing 737-800 planes worth USD$1.9 billion at list prices.

 

Ryanair said the planes were scheduled for delivery between September 2009 and March 2010, and take its 737s flying and on firm order to 308.

 

Discounts are common on aircraft, but Ryanair Chief Financial Officer Howard Millar and Boeing officials declined to say what price the Irish airline would pay for each plane, which carries a sticker price of USD$66 million - USD$75 million.

 

Ryanair is Europe's largest budget airline and a long-standing 737 customer. It has 137 flying and another 171 on order.

 

"There's plenty of headroom for growth in Europe," Ryanair's Millar told reporters when asked about April traffic figures which showed adding new planes had dented its load factor, which fell to 83 percent from 85 for the same month a year earlier.

 

Ryanair, which posts annual results next week, carried 42.5 million passengers in the year which ended on March 31. Millar reiterated that Ryanair expects that figure to rise to 87 million in 2012.

 

Millar said any move into long-range routes such as flights to the United States was "some way off", and would only happen as an independent company for which Ryanair would provide expertise.

 

He also said for Ryanair a move to the 787 airliner set to enter the market in 2008 was not on the cards, but that a replacement for the 737 due around 2015 would be of interest.

 

"What we are interested in is the new carbon fibre technology," Millar said, referring to Boeing's shift to great use of the lighter, fuel-saving material.

 

(Reuters)

 

[Pieter C. 5]

More RYR news:

 

Ryanair Profit Rises 33 Percent

 

June 5, 2007

Ryanair posted a 33 percent jump in annual net profit on Tuesday helped by higher ticket prices but said profit growth would slow as higher UK interest rates prompt thrifty travelers to seek cheaper deals.

 

Europe's biggest low-cost carrier said it expected profit growth of only around 5 percent in the current business year with average ticket prices falling as higher borrowing costs curb consumer spending in Britain, Ryanair's biggest market.

 

Ryanair shares fell more than 7 percent as a warning for investors to be "cautious and conservative" on the year ahead overshadowed news that Ryanair would use its growing cash pile to buy back shares.

 

Once adjusted to exclude one-off items, profit after tax at the airline rose to EUR401.4 million euros (USD$540.4 million) in the 12 months to end March versus EUR301.5 million a year earlier.

 

Ryanair Chief Financial Officer Howard Millar pointed out that, in common with rivals such as EasyJet, its planes were not as full as a year ago.

 

"Interest rate rises in the UK are starting to have an effect on the whole industry, how consumers are spending, they've less money available," he said.

 

The Bank of England has raised rates four times since August. It is expected to hold interest rates at 5.5 percent this month but most economists believe another increase is only a matter of time.

 

Ryanair said an expanding route network would mean a 22 percent increase in the number of passengers it carries to over 52 million in its current business year but cautioned average ticket prices, known as yields, were set to fall 5 percent.

 

"As a result we expect profit growth over the coming year to be more modest and to rise by approximately 5 percent," the company said in a statement. "We believe that the company and our shareholders should remain cautious and conservative."

 

Stronger than expected ticket prices last year forced Ryanair to revise initially cautious guidance but Millar said the company was facing the challenge of "a different environment."

 

"We're generally conservative with our guidance but we think there is something fundamentally changing in the market," Millar said in an interview.

 

"People will say 'look, they said this last year' but nobody expected this time last year that average fares would rise by nearly 7 percent. We're not seeing anything like that."

 

John Sheehan, analyst at NCB Stockbrokers, said the ticket price guidance from Ryanair was worse than the 2 percent decline he had been expecting.

 

"The outlook for Ryanair is cautious," he wrote in a research note. "Summer yields are expected to be soft, primarily driven by a weaker UK environment."

 

(Reuters)

 

[Pieter C. 5]

and.............some good news for Aer Lingus and Airbus:

 

Aer Lingus Orders Airbus Aircraft

 

June 6, 2007

Irish airline Aer Lingus said on Wednesday it is to acquire 12 new Airbus aircraft valued at USD$2.4 billion.

 

The former state carrier said it will take six A330-300E and six A350 XWB planes, with deliveries to start in 2009.

 

Aer Lingus said it will have the option to purchase a further six A350 XWB aircraft for delivery by 2018.

 

Airbus's planned A350 mid-range passenger jet is intended to rival Boeing's 787 Dreamliner. Airbus President Louis Gallois had said on Monday the company would see a new order for the A350 before the Paris air show later this month.

 

"These aircraft are key to our growth ambitions which include new routes to the US," Aer Lingus Chief Executive Dermot Mannion said in a statement.

 

"The aircraft will complement our existing Airbus fleet and enhance our long haul network."

 

Aer Lingus said "substantial discounts off the catalogue prices have been negotiated".

 

The deal was subject to shareholder approval, it added.

 

The planned acquisition will increase Aer Lingus's long-haul fleet to 14 aircraft by 2014 from nine this year, the company said.

 

Ireland's former national carrier has said ever since its privatization last year that it intended to use funds raised by the flotation to expand its current fleet of Airbus aircraft.

 

Aer Lingus, the subject of a long-running hostile takeover bid by larger rival Ryanair, is tapping into resources freed up by its privatization to expand both short and long-haul operations and compete more effectively with Ryanair.

 

(Reuters)

 

[Pieter C. 5]

Ryanair To Sue European Commission Over State Aid

 

July 10, 2007

Ryanair said on Tuesday it would sue the European Commission for not taking action against governments which give aid to national flag carriers that the Irish budget airline believes is illegal.

 

Ryanair, Europe's biggest low-cost airline, said it submitted complaints involving Air France, Lufthansa, Alitalia and Olympic to the Commission over a year ago.

 

"These complaints involved hundreds of millions of euro in illegal state aids being granted by the French, German, Italian and Greek governments," Ryanair said in a statement.

 

"Although Ryanair has called on the Commission several times to investigate these claims, the Commission has failed to do so."

 

Ryanair, whose bid for fellow Irish airline Aer Lingus was blocked last month by the European Commission, accused European regulators of adopting a "twin track approach".

 

It was "more concerned with protecting inefficient flag carrier airlines and hub airports than... with actually promoting competition", the carrier added.

 

The EU executive said it had yet to be informed of any application to the European Court of Justice by Ryanair.

 

"The Commission has been dealing with the cases both fairly and effectively in accordance with our duties and we are confident that when reviewing our actions, the court will confirm it," a spokesman told reporters at a regular briefing.

 

Ryanair said discounting domestic airport fees in France, losses on a new terminal for Munich Airport in Germany and cash injections into Alitalia and Olympic all amounted to "blatant abuses" of state aid rules.

 

By contrast the Dublin-based airline pointed to a past EU ruling that subsidies it received from Charleroi Airport in Belgium were illegal.

 

"Although a rant, the Ryanair statement does underline uncomfortable home truths about national governments blatantly protecting their flags, especially those whose finances are hopeless," said Goodbody analyst Joe Gill.

 

(Reuters)

 

[Jessnor Arif 1]

Why do LCC always complaint about government aid for National Carrier?

 

Ryanair and Olympics, Alitalia, Lufthansa.

AirAsia and Malaysia Airlines.

 

Its not like with the government protection, they 're not making any money...

 

 

[Pieter C. 5]

More (positive) Ryanair news:

 

Ryanair announced the following new routes:

From Bristol to Turin (weekly from Dec. 22);

from Nottingham East Midlands to Belfast City (daily from Oct. 30), Grenoble (weekly from Dec. 22), Poznan (thrice-weekly from Nov. 08), Salzburg (weekly from Dec. 22) and Tenerife (twice-weekly from Oct. 28);

from Liverpool to Belfast City (daily from Oct. 30), Budapest (four-times-weekly from Oct. 31), Bydgoszcz (twice-weekly from Oct. 28), Fuerteventura (thrice-weekly from Oct. 30), Grenoble (weekly from Dec. 22), Lodz (twice-weekly from Oct. 29), Salzburg (weekly from Dec. 22) and Tenerife (thrice-weekly from Oct. 30);

from Glasgow Prestwick to Belfast City (daily from Oct. 30), Budapest (thrice-weekly from Nov. 1), Grenoble (weekly from Dec. 22) and Kaunas (twice-weekly from Oct. 28).

 

Ryanair Q1 Profit Jumps 20 Percent

 

July 31, 2007

Ryanair posted a better than expected 20 percent rise in first quarter net profit on Tuesday, and said it would beat its full-year profit goal by cutting capacity at Britain's Stansted Airport this winter.

 

Europe's biggest low-cost carrier said profit after tax in the three months to the end of June rose to EUR138.9 million euros (USD$189.9 million) from EUR115.7 million in the same period of 2006 after passenger volumes on its growing network rose 18 percent.

 

The Dublin-based carrier said average ticket prices had been flat in the first three months of its business year and that its outlook for yields remained cautious.

 

Ticket prices in the second quarter are expected to be "slightly down" on a year earlier while a drop of 5 to 10 percent is likely in the second half, Ryanair said.

 

"However, the reduction in capacity on non profitable winter routes... will enable us to slightly increase our previous guidance," the airline said in a statement.

 

Net profit for the 12 months to March 2008 is now expected to rise 10 percent versus an earlier forecast of 5 percent.

 

Ryanair, which is engaged in a war of words with the British government over increased duties for airline passengers and has repeatedly criticized airport operator BAA over higher airport charges, said it would cut UK capacity.

 

"We plan to reduce the number of aircraft operated ex Stansted this winter by almost 20 percent from 40 to 33. This will mean reduced frequency or temporary cessation of services on routes which would be loss making."

 

That meant passenger volumes would now rise by 18 percent to 50 million versus the 52 million previously indicated.

 

Ryanair, which now expects unit costs to rise 5 percent this year against an earlier 6 to 7 percent forecast, said the move should keep down costs and help stabilize yields.

 

(Reuters)

 

[Pieter C. 5]

Aer Lingus Says Ryanair Appeal To Fail

 

September 11, 2007

Takeover target Aer Lingus said on Tuesday the appeal filed by Ryanair over its proposed takeover would fail, as the EU Commission concluded that the deal presented monopoly concerns.

 

Ryanair said on Monday it had lodged an appeal with the European Court of First Instance against a decision by the EU Commission authorities to block its bid for its fellow Irish airline.

 

"Aer Lingus is in no doubt that the appeal... will fail and Aer Lingus will assist the Commission in upholding the decision before the court," it said in a statement.

 

(Reuters)

 

[Pieter C. 5]

EU Lets Ryanair Keep Aer Lingus Stake - Report

 

October 10, 2007

The Wall Street Journal has reported that European regulators rejected a bid by Aer Lingus to force Ryanair to sell its stake in the Irish national airline.

 

Philip Lowe, the European Union director general for competition, stated that the European Commission had no power to act on Aer Lingus' request.

 

Lawyers say regulators are squeezed because the Company's stake, about 29.4 percent, doesn't grant Aer Lingus effective control.

 

Ryanair tried to buy Aer Lingus earlier this year, but EU regulators blocked the bid in June, saying such a merger would have led to a quasi-monopoly in the Irish market. Ryanair was allowed to keep its then 25 percent stake in Aer Lingus. It has since increased its stake and attempted to influence Aer Lingus' strategy.

 

Ryanair has also appealed to the European Court of Justice to overturn the commission's decision to block its bid.

 

(Reuters)

 

[Pieter C. 5]

Aer Lingus Says Investors Will Back It Vs Ryanair

 

December 6, 2008

Aer Lingus said on Friday it would present a strategy to fend off a new EUR750 million euro (USD$959 million) bid by rival Irish airline Ryanair, saying investors would back its independence.

 

Aer Lingus chief executive Dermot Mannion told broadcaster Newstalk that the company would defend its independence vigorously.

 

Earlier on Friday, unions representing workers at Aer Lingus rejected guarantees given by Ryanair that it would maintain their representation as part of its bid for the former state airline.

 

Ryanair is trying to appeal directly to the government and employees, which own more than 25 percent and 14 percent of the carrier, respectively, after the Aer Lingus board this week rejected the all-cash offer, for the second time in two years.

 

"The corporate culture of Ryanair is just something that is a complete anathema to our members," said Niall Shanahan, communications officer with the IMPACT union.

 

"An approach from Ryanair, having been through this process already, is something instinctively they would want to reject," said Shanahan.

 

"We already have union recognition in Aer Lingus, so (Ryanair chief executive) Michael O'Leary is not offering anything new or extra," said a SIPTU union spokesman.

 

The Employee Shareholder Ownership Trust (ESOT), which administers Aer Lingus employees' shareholdings and is a separate entity to the unions, is expected to meet on Monday to discuss Ryanair's bid.

 

The Irish government has said it would wait until Ryanair tabled a formal offer before giving its opinion.

 

Ryanair plans to submit the formal offer within the next two weeks, after which it will give Aer Lingus shareholders about 30 to 40 days to decide, Michael O'Leary said.

 

"We hope, with further meetings with the government, the unions, the ESOT, that we will persuade everybody that this is the only future for Aer Lingus," O'Leary told RTE television.

 

Ryanair, Europe's biggest budget airline, already owns nearly 30 percent of Aer Lingus.

 

Ryanair said on Thursday it would recognize trade unions at the airline, in contrast to its own company policy. It said it would give the Irish government control over Aer Lingus's valuable landing slots at London Heathrow Airport and restore the Shannon-Heathrow route.

 

Ryanair tried to buy Aer Lingus for double the price of its current bid in 2006, but it was thwarted by an EU ruling that it would create a near monopoly in European flights out of Dublin.

 

Employees and the government also rebuffed Ryanair's earlier offer for Aer Lingus in 2006 when the airline was privatized.

 

It has made an all-cash offer of 1.40 euros per share this time.

 

Aer Lingus shares closed 12.9 percent higher at 1.53 euros in London, while Ryanair's shares rose 2.4 percent to 3.01 euros.

 

The two unions, IMPACT and SIPTU, represent the majority of workers including pilots, cabin crew and ground staff at Aer Lingus.

 

Aer Lingus said on Friday passenger traffic last month was down 3.6 percent year-on-year due to uncertainty over the threat of industrial action amid its cost cutting plan and continued weakness in its long-haul market in the United States.

 

It later said enough SIPTU members had signed up to cost cuts to deliver the EUR25 million of savings targeted in relevant departments, with further savings to follow elsewhere.

 

Analysts believe a recent spate of airline mergers and the absence of another suitor give Ryanair a better chance of getting this offer past competition authorities in Brussels.

 

"Merger mania doesn't necessarily make that strategy right," Aer Lingus's Mannion said.

 

NCB analyst Neil Glynn said the success of the bid would be largely dependent on the appetite of shareholders, including the government and ESOT to sell their stakes and on Brussels' stance.

 

"We continue to see Ryanair's offer of 1.40 euros per share as undervaluing Aer Lingus's strategic value to it and expect that the offer price will have to be raised," Glynn wrote in a research note.

 

Ryanair's new bid comes amid a wave of mergers and consolidation in the airline sector, as the industry tries to cope with fluctuations in fuel prices and the worldwide economic downturn.

 

Earlier on Friday, Lufthansa signed a deal for the purchase of loss-making Austrian Airlines, in a move that will make it Europe's biggest airline.

 

(Reuters)

 

[Pieter C. 5]

Irish Investor Mulls Aer Lingus Counterbid

 

December 18, 2008

Irish businessman Stuart Pearson is considering a bid for parts or all of Aer Lingus to thwart a hostile bid from rival Irish airline Ryanair, the Irish Independent reported on Thursday.

 

A spokeswoman for Aer Lingus declined to comment and Pearson could not be contacted. The Irish Independent said Pearson declined to make any comment on the Aer Lingus move.

 

The newspaper quoted unnamed sources as saying Pearson, 24, who has amassed millions from property deals, could be "content" with a 20 percent stake in Aer Lingus but an outright bid was "not ruled out".

 

Ryanair officially launched its attempt to take over Aer Lingus on Monday by writing to its rival's shareholders, asking them to accept a EUR750 million euro (USD$1.05 billion) bid despite the rejection by the Aer Lingus board and management.

 

Aer Lingus Chairman Colm Barrington was quoted in a newspaper interview last week as saying he would seek a friendly investor to take a majority stake in the airline, but chief executive Dermot Mannion has said Aer Lingus was not for sale.

 

Ryanair, Europe's biggest low-cost carrier, which already owns almost 30 percent of Aer Lingus after a previous takeover attempt, has said other investors should vote for a creation of a united Irish airline by January 5.

 

(Reuters)