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Ryanair/Charleroi ruling overturned; options rise for secondary airports

 

Thursday December 18, 2008

European Court of First Instance annulled the European Commission's ruling in the longstanding Ryanair/Charleroi state-aid case because it is "vitiated by an error in law," thus opening the door for other secondary airports to offer incentives to prospective airline tenants.

 

The EC concluded in 2004 that some of the financial incentives and reductions in airport charges and landing fees granted to Ryanair as part of its agreements with the Walloon Region to establish a base at Brussels Charleroi, and with the airport to expand the base, constituted state aid incompatible with the common market. It ordered the Belgian government to recover around €4 million from the LCC, which subsequently challenged the decision.

 

CFI concluded yesterday that the Commission incorrectly refused "to examine together the advantages granted by the Walloon Region and by BSCA and to apply the principle of the private investor in a market economy to the measures adopted by the Walloon Region, in spite of the economic links binding those two entities." The EC has two months to appeal.

 

Ryanair CEO Michael O'Leary said he was "delighted to have obtained justice" and that CRL "has been the model for how small regional and secondary airports around Europe can transform themselves from unused airfields into growing profitable international airports." He also said it is "time for Ryanair and the Commission to stop fighting and we sincerely hope that the CFI ruling can be the catalyst for Ryanair and the EU Commission to work together to put Europe's consumers first."

 

Ryanair called on the EC to drop state aid cases against similar regional and secondary airports (Alghero, Aarhus, Bratislava, Frankfurt Hahn, Hamburg Lubeck, Pau, Berlin Schonefeld and Tampere) and to "focus instead on the real and blatant breaches of the state aid rules by Europe's biggest flag carriers," citing the Italian government's emergency loan to Alitalia and the debt relief granted by the Austrian government to Lufthansa as part of its acquisition of Austrian Airlines.

 

 

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Aer Lingus Opens Gatwick Base

 

December 19, 2008

Irish carrier Aer Lingus opened a new base at London's Gatwick Airport on Friday and rejected criticism from Ryanair about its business forecasts in an increasingly hostile takeover battle.

 

Aer Lingus chief executive Dermot Mannion told reporters he completely rejected Ryanair's accusation that the former Irish state carrier was making "contradictory claims and forecasts".

 

Aer Lingus expects its financial performance to improve in 2009 on the back of a cost-cutting deal with unions and the falling price of oil. It has previously forecast an operating loss for next year and has not yet given specific forecasts for 2009.

 

"The halving of the fuel price dramatically improves the prospects for the entire industry," Mannion said at a news conference in London.

 

He declined to give an estimate for operating performance this year or next.

 

Aer Lingus has come out fighting against Ryanair's EUR750 million euros (USD$1.05 billion) or 1.40 euro a share bid, its second in as many years, with plans to expand its short-haul operations with a new base at London Gatwick airport.

 

The former state airline said it will operate short-haul services to Ireland and European destinations from Gatwick, its first base outside Ireland.

 

The expansion will cost GBP100 million pounds in the first year and 120 new jobs will be created. Four Airbus A320 short-haul aircraft will initially be based at Gatwick and that is expected to grow to eight within a year.

 

"The Gatwick operation will complement our existing services out of London Heathrow, and position Aer Lingus for growth as we roll out new routes and bases in future years," Mannion said.

 

He declined to comment on a report in an Irish newspaper that said Aer Lingus was expected to restore the Shannon-to-Heathrow link it scrapped last year.

 

Ryanair said it was concerned comments made by Aer Lingus about its trading performance and prospects following the launch of its recent takeover offer were much more upbeat than those made in Aer Lingus' November 11 interim management statement.

 

"We, as a large shareholder, are concerned about some of these apparently contradictory claims and forecasts, and their impact upon Aer Lingus' forecast post exceptional net profit (loss) after tax for 2008 and 2009," Ryanair said in a shareholder letter to Aer Lingus.

 

In the letter Ryanair asked Aer Lingus to clarify the impact of increased costs, the loss of revenue arising from the elimination of fuel surcharges and capacity reductions as well as its expected defence fees.

 

Ryanair officially launched its attempt to take over Aer Lingus on Monday by writing to its smaller rival's shareholders, asking its all-cash bid despite the rejection by Aer Lingus board and management.

 

Ryanair, which already owns almost 30 percent of Aer Lingus, has said other investors should vote for the creation of a united Irish airline by January 5.

 

Ryanair, whose previous bid in 2006 was blocked by the European Commission on competition grounds, hopes the recent wave of consolidation in the sector will persuade the EU to allow a takeover this time.

 

(Reuters)

 

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Aer Lingus Rejects Ryanair Bid, Forecasts Profits

 

December 22, 2008

Irish airline Aer Lingus pledged to make a small profit in 2008 and 2009 as it set out its case against the EUR750 million euro (USD$1 billion) takeover bid from Ryanair.

 

Aer Lingus, already nearly 30 percent owned by its low-cost rival, said in a statement on Monday the offer significantly undervalued the group and said it could succeed as an independent carrier.

 

"Despite... extremely challenging conditions, we expect to achieve profit overall in 2008," Chairman Colm Barrington said in an open letter to shareholders, adding that cost cuts and lower fuel prices had boosted the group's prospects.

 

Director of Corporate Affairs Enda Corneille later said the 2008 profit would be small and would not include the cost of restructuring the airline's work force in the autumn.

 

"We will make a small pretax profit in 2008 pre-exceptional costs, with the same again in 2009," he said, without giving the exact cost of the restructuring.

 

Ryanair replied in a statement that it was misleading to forecast a profit when after tax and exceptional items the carrier would in fact make a loss.

 

"The reality is that Aer Lingus has incurred substantial -- as yet undisclosed -- exceptional costs, and companies have to pay tax, so the result will be another year of substantial net losses," Ryanair chief executive Michael O'Leary said in a statement.

 

Aer Lingus shares closed up 4 percent at 1.51 euros, still at a premium to the value of the offer, while Ryanair's shares were down 2.2 percent at 3 euros.

 

Ryanair has bid 1.40 euros a share in cash for the portion of Aer Lingus it does not already own and wrote to shareholders directly last week.

 

The offer values the rump shares at EUR 525 million and the entire airline at EUR750 million -- about half what it offered in an earlier takeover attempt two years ago.

 

That bid was blocked by the European Commission for being anti-competitive and Barrington said he saw no reason why regulators would think any differently this time around.

 

Corneille said Aer Lingus had not received any contact from third parties interested in trumping the Ryanair offer. He said the airline would discuss the approach in detail with the Irish government, a 25 percent shareholder, in the new year.

 

Aer Lingus, which said it had net cash of EUR803 million, is also reviving its route from London's Heathrow to Shannon in the west of Ireland following agreements with staff on work practices.

 

The decision was welcomed by Ireland's Minister for Transport, Noel Dempsey.

 

(Reuters)

 

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Ryanair Rebuffed By Aer Lingus Investors

 

January 6, 2009

Irish airline Ryanair's EUR750 million euro (USD$1 billion) takeover bid for rival Aer Lingus has been comprehensively rejected by investors, increasing pressure on Ryanair to raise its offer.

 

Ryanair said holders of just 22,314 Aer Lingus shares, less than 0.05 percent of the total outstanding, had accepted its 1.40 euros per share offer for the former state airline by an initial January 5 deadline. It set a new closing date of February 13.

 

Collins Stewart analyst Andrew Fitchie said on Tuesday it was not unusual to have such a low uptake initially but the Aer Lingus share price indicated Ryanair would have to raise its offer to woo the main stakeholders.

 

"For this to go ahead they need to substantially increase the offer, sweeten it from the government and unions' perspective, if they stand any chance," he said.

 

"It's quite compelling for Ryanair, so I'm sure they would go the extra mile."

 

Ryanair chief executive Michael O'Leary, who has held talks with the Irish government and Aer Lingus employees -- the carrier's two other major shareholders, said he remained confident the offer would succeed.

 

"Very few people will ever accept during the first acceptance period," O'Leary told Irish radio station Newstalk. "Other shareholders tend not reveal their hand until you get to the end of the process."

 

Ryanair itself owns 29.82 percent of Aer Lingus, a stake it built when making a previous offer in 2006 which was blocked on competition grounds by the European Commission.

 

Ryanair also said it had held talks with Tailwind Nominees, which owns about 2 percent of Aer Lingus on behalf of pilots.

 

The Aer Lingus Employee Share Ownership Trust (ESOT) said last week it had talks with Ryanair but did not comment further at the time. Unions representing workers at Aer Lingus, which are separate from ESOT, have rejected Ryanair's offer.

 

Ryanair has based its offer on the argument that a loss-making Aer Lingus would not survive as an independent airline. However Aer Lingus on Tuesday reiterated it now expected to be profitable in both 2008 and 2009 as fuel has become cheaper.

 

"Aer Lingus now expects significantly higher cash balances resulting from a substantially better performance in 2009 than was anticipated in August," it said.

 

Ryanair said separately it carried 11 percent more passengers in December than a year earlier, with the average flight 79 percent full, unchanged year-on-year. That took its 2008 passenger tally to 57.7 million, up 18 percent.

 

For 2009, Ryanair forecast over 65 million passengers, less than the 67 million to 68 million range it predicted at the time of its half-year earnings presentation in November.

 

(Reuters)

 

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Aer Lingus Meets Ryanair, Rejects Bid Again

 

January 7, 2009

Irish airlines Ryanair and Aer Lingus held talks on Tuesday over Ryanair's EUR750 million euro (USD$1 billion) takeover bid, the two carriers said on Wednesday, and Aer Lingus repeated it was rejecting the offer.

 

"Aer Lingus explained to Ryanair at the meeting how the bid fundamentally undervalues the airline, its robust financial position, ignores the substantial competition issues and is therefore not capable of completion," Aer Lingus said.

 

"Ryanair today confirmed that they held a meeting yesterday with representatives of Aer Lingus," Ryanair said in a statement, without elaborating.

 

There was also minimal acceptance from Aer Lingus investors before an initial January 5 deadline, which Ryanair on Tuesday extended to February 13.

 

(Reuters)

 

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Ryanair Files Complaint Over Aer Lingus Comments

 

January 7, 2009

Irish airline Ryanair said on Wednesday it had lodged a complaint with the regulator over comments made by its rival Aer Lingus which once again rejected the carrier's EUR750 million euros (USD$1.02 billion) bid.

 

The two airlines said on Wednesday they had held talks on Tuesday over Ryanair's bid.

 

"Aer Lingus explained to Ryanair at the meeting how the bid fundamentally undervalues the airline, its robust financial position, ignores the substantial competition issues and is therefore not capable of completion," Aer Lingus said.

 

Ryanair said it had lodged a complaint with Ireland's Takeover Panel over the Aer Lingus comments in the latest spat between the two groups.

 

"The reality is that the new Ryanair offer is capable of completion, and Aer Lingus' claims to the contrary are false and in breach of takeover rules," chief executive Michael O'Leary said in a statement.

 

"As a result, Ryanair has made a formal complaint to the Takeover Panel in relation to these repeated breaches of the takeover rules."

 

There was minimal acceptance from Aer Lingus investors of an initial January 5 offer deadline, which Ryanair on Tuesday extended to February 13.

 

It has offered 1.40 euros a share for Aer Lingus, just half the price of a previous offer in 2006 which was blocked by the European Commission on competition grounds.

 

O'Leary, who has held talks with the Irish government and Aer Lingus employees -- the carrier's two other major shareholders -- has said he remained confident the offer would succeed.

 

Ryanair said separately on Wednesday it had taken advantage of recent falls in fuel prices to cover half of its needs for the first three quarters of its 2009/10 fiscal year at USD$700 per tonne, equivalent to about USD$64 per barrel of crude oil.

 

"This will lock in a 42 percent reduction of our hedged fuel cost per passenger compared to fiscal 2008/09, and will enable Ryanair to continue to grow traffic and reduce fares, during these recessionary times, when most airlines are increasing them," O'Leary said.

 

Aer Lingus said on Tuesday that as of December 31 it had 72 percent of its 2009 fuel needs covered at a price of USD$911 per tonne and 22 percent cover for 2010 at a price of USD$876 per tonne.

 

(Reuters)

 

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Russian Investor Blavatnik Sells Air Berlin Stake

 

January 8, 2009

Germany's Air Berlin said on Thursday that Russian billionaire Len Blavatnik sold his 18.9 percent stake in the carrier, leaving market participants guessing who bought the holding.

 

Recorded trading volumes show that Blavatnik, whose largest company, petrochemicals maker LyondellBasell, has filed for bankruptcy protection, did not sell his Air Berlin stake via the stock market.

 

Abu Dhabi's Etihad Airways, previously thought to be interested in building a stake in the German carrier, said it did not buy Blavatnik's stake.

 

Since the Russian investor bought the Air Berlin stake in the spring of 2008, its market value has halved, falling to about EUR56 million euros (USD$75.91 million), based on Thursday's closing price.

 

(Reuters)

 

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Aer Lingus December Traffic Down As Ryanair Grows

 

January 8, 2009

Irish airline Aer Lingus reported on Thursday a 4.6 percent drop in its December passenger numbers, two days after its Irish rival and predator Ryanair posted double-digit growth.

 

Aer Lingus, which is conducting a robust fight against Ryanair's EUR750 million euro (USD$1.02 billion) hostile bid, said it carried 703,000 passengers last month as the percentage of seats occupied on individual flights also fell.

 

Aer Lingus said its load factor was 69.4 percent in December compared with 70.8 percent a year ago.

 

Ryanair, which has based its bid on the argument that a loss-making Aer Lingus will not survive as an independent carrier amidst sector consolidation, reported on Tuesday an 11 percent rise in December passenger numbers, with its load factor unchanged from a year ago.

 

"Is there any independent expert outside of Aer Lingus who has any faith that your independence strategy will be successful?," Ryanair chief executive Michael O'Leary said in an open letter to Aer Lingus Chairman Colm Barrington on Thursday.

 

Panmure Gordon analyst Gert Zonneveld agreed Aer Lingus was likely to become part of the industry-wide consolidation trend at some point, though he did not want to draw any conclusions from the traffic data alone.

 

"Market conditions are tough and companies respond differently," Zonneveld said. "Some companies respond by cutting capacity and trying to maintain fares or even increasing fares. Others respond by cutting fares and increasing capacity."

 

Aer Lingus said this week it now expects to make a profit in both 2008 and 2009 despite a projected 2008 operating loss of about EUR20 million euros, as it is cutting costs and because fuel has become cheaper.

 

NCB analyst Neil Glynn said he expects the carrier to post an operating loss of EUR22 million for 2008, with revenue growth of 6 percent.

 

"As the Irish economy continues to weaken, we expect total revenues to decline by near to 6 percent at constant currency in full-year 2009," he added.

 

Aer Lingus said passenger traffic, measured in revenue passenger kilometres (RPKs), fell 6 percent last month from the same period of 2007, with drops on both short and long-haul routes.

 

The carrier's full-year passenger tally rose 6.5 percent to 10.4 million.

 

Ryanair, Europe's largest low-cost airline, carried almost 58 million passengers last year and has plans to grow to over 65 million in 2009.

 

Air France-KLM, which is Europe's largest airline overall, said on Thursday its December passenger traffic rose 1.3 percent, with its load factor 0.3 percentage points higher at 78.9 percent.

 

(Reuters)

 

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Vueling December Passenger Traffic Falls 22.5 Percent

 

January 8, 2009

Passenger traffic at budget Spanish airline Vueling fell 22.5 percent in December, the group said on Thursday.

 

Vueling said fleet and cost cuts would mean an improvement in fourth-quarter results from the year-ago period.

 

The airline's passenger load factor rose 7.4 percentage points on a year ago to 71 percent, helped by Vueling cutting flights to cope with an economic downturn hitting Spain's tourism industry.

 

Vueling said it operated eight fewer planes in December compared with the same month last year, cutting its fleet by a third. This would equate to cost savings of between EUR40 million and EUR50 million over the year, the company said.

 

(Reuters)

 

 

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Vueling/Clickair merger expected to pass EC test

Friday January 9, 2009

The European Commission is expected to announce today the outcome of its first-stage review of the proposed merger of Clickair and Vueling Airlines.

 

Shareholders of the two Barcelona-based LCCs agreed on the terms of a merger in July and an initial submission was filed to Spanish competition authority CNC, which in August referred the file to the EU's DG-Competition. The EC has asked the carriers for remedies, mainly slot surrenders at BCN on certain routes (to Seville, for example), in order to address competition issues and possible market dominance, a source close to the discussions said.

 

Insiders expect the EC to approve the merger based on the latest exchange of remedies, which took place Monday, although they noted that the opening of a more in-depth second-stage investigation is possible. The blocking of the merger is regarded as unlikely.

 

Under the terms of the shareholders' agreement, Iberia will own 45% of the merged entity's capital while Inversiones Hemisferio will be the second-largest shareholder at about 13%-14%. Air Nostrum will hold 5%. IH currently is Vueling's largest shareholder while IB holds 20% of Clickair.

 

Clickair will be absorbed into Vueling, which will be the name of the merged entity. The company will remain listed on Madrid's stock exchange. Vueling shareholders will have the right to nominate the nonexecutive chairman and Clickair shareholders will name the new CEO. Although not formally announced, reports indicate Vueling Chairman Josep Pique will retain that title and Clickair CEO Alex Cruz will be CEO.

 

If cleared by the EC, the new Vueling will become Spain's second-largest carrier. Vueling carried 5.9 million passengers last year, down 4.8% from 2007, with an average of 16 aircraft compared to 24 the prior year. Clickair at year end operated 26 A320s and boarded some 6.5 million passengers in 2008, up 41.3% year-over-year.

 

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EU Clears Iberia/Vueling/Clickair Deal

 

January 9, 2009

The European Commission gave conditional clearance on Friday for closer ties between Spanish airlines Iberia, Vueling and Clickair.

 

Vueling and unlisted Clickair, in which Iberia holds an 80 percent stake, announced in July plans for a full merger to create a carrier better equipped to tackle stiff competition and high fuel costs.

 

"The Commission's clearance is conditional upon the parties releasing slots in Barcelona and other European airports to address competition concerns on several Spanish and other European routes," the European Union executive said in a statement.

 

EU Competition Commissioner Neelie Kroes said: "The commitments given by Iberia will permit other airlines to enter new routes or expand their services in competition with the merged company."

 

The parties offered to transfer slots free of charge at several airports, in particular Barcelona and Madrid, the statement said.

 

"These slots cover all routes where competition concerns were identified and would create the conditions for new entrants or existing competitors to operate more than 150 additional roundtrips per week," the statement said.

 

"The Commission considers that these remedies are likely to considerably facilitate entry for competitors, maintain competitive pressure on the merged entity and thereby benefit Spanish and other European passengers on the affected routes."

 

(Reuters)

 

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German State Wants Fraport Stake In Hahn

 

January 12, 2009

The German state of Rhineland-Palatinate wants to buy Fraport's stake in Hahn airport to keep budget airline Ryanair from scaling back flights there, German broadcaster SWR reported on Monday.

 

SWR gave no sources for its report. State officials were unavailable for immediate comment.

 

Ryanair has threatened to reduce the number of flights to Hahn in response to an extra 3 euros per passenger fee Fraport was planning to charge. The company has said it will hold a news conference on Tuesday.

 

A Fraport spokesman said the company was waiting to see how Ryanair and Rhineland-Palatinate proceeded before taking any decisions, and it would enter into open-ended talks with all players. He added that Fraport did not want to exit Hahn, but the airport must become economically sustainable.

 

Fraport holds a 65 percent stake in Hahn -- not Frankfurt's main airport but a remote former US military airfield converted to civilian use after the end of the Cold War. The German states of Hesse and Rhineland-Palatinate each hold a 17.5 percent stake.

 

(Reuters)

 

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Ryanair Holds Talks On Niagara Falls Service

 

January 12, 2009

Europe's biggest budget airline Ryanair has held talks with officials from Niagara Falls airport with a view to launching a transatlantic service from Dublin, the Irish Examiner reported on Monday. The report did not cite sources.

 

"Ryanair meets with lots of airports and at their request we met them," a Ryanair spokeswoman said, without giving further details.

 

The Irish Examiner quoted Gregory Stamm, chairman of the Niagara Frontier Transportation Authority as saying after the meeting there was "a market on both ends for these charters".

 

"It's a matter of how this would fit into Ryanair's expansion plans," Stamm was quoted as saying.

 

NFTA's web site says the body was aiming to attract low fare airlines to the Buffalo Niagara International Airport, which is located close to the Niagara Falls tourist spot and to Canada.

 

Ryanair has said in the past it was interested in setting up a no-frills transatlantic airline, which would be a stand-alone operation.

 

(Reuters)

 

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Ryanair Willing To Raise Aer Lingus Offer

 

January 16, 2009

Ryanair is willing to raise its offer for rival Aer Lingus but will not wage a prolonged battle if shareholders in Ireland's former state airline continue to oppose the deal.

 

Ryanair chief executive Michael O'Leary told reporters on Friday he would be willing to increase his offer price of 1.40 euros a share, equivalent to about EUR750 million euros (USD$995 million).

 

However, in a statement Europe's largest low-cost carrier ruled out raising the price to 2 euros or above. A spokeswoman for Ryanair declined to comment further.

 

Aer Lingus said the offer was "unlikely to be capable of completion" as Ryanair had still not made clear why it would be approved by the European Commission, which blocked an earlier offer by Ryanair on competition grounds.

 

"Aer Lingus continues to believe that the offer is diversionary and fatally flawed," Aer Lingus said, reiterating that it expected to be profitable in 2008 and 2009.

 

Aer Lingus shares closed down 5 percent at 1.52 euros, still a premium to the level of the offer.

 

Ryanair, which has accumulated more than 29 percent of Aer Lingus shares, has been pursuing its competitor at Dublin airport for more than two years and in December made a second bid despite opposition from management and staff at Aer Lingus.

 

"(We are) open to negotiate with all shareholders the possibility of a small increase in price if that were to get the deal over the line," O'Leary said.

 

"If the government were to come to us, for example, and say 'We are interested in selling our stake but not at this price, could we negotiate on price?', I think we would be, within reason, open to negotiating," he added.

 

Ryanair said in an earlier statement on Friday it would pursue its second bid for Aer Lingus with regulators only if Aer Lingus's major shareholders gave their prior backing.

 

Ryanair's first offer, which valued Aer Lingus at twice what is now on offer, was rejected by European Union regulators as well as major shareholders such as the Irish government, which owns about 25 percent, and staff who hold about 14 percent through The Employee Shareholder Ownership Trust (ESOT).

 

Ryanair repeated its offer for Aer Lingus would remain open for acceptance until February 13, adding it expected EU regulators to decide within 25 working days whether to approve any takeover or proceed to a more detailed Phase II review.

 

"Ryanair... does not intend to engage in a lengthy Phase II review process with the EU unless it receives such support from Aer Lingus shareholders, including the acceptance of the offer by either the Irish government or the ESOT," it said.

 

(Reuters)

 

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Ryanair willing to raise EI offer but wants quick resolution

 

Monday January 19, 2009

Ryanair is willing to raise its offer for rival Aer Lingus though it warned it will not engage in a lengthy regulatory clearance process unless it receives significant support from EI shareholders, including acceptance of the offer by either the Irish government or the Employee Shareholder Ownership Trust.

 

Those entities control about 25% and 14% of EI respectively. Ryanair extended its €1.40 per share offer to Feb. 13 after receiving next to no acceptances from other EI shareholders. It holds 29.82%.

 

Ryanair CEO Michael O'Leary argued that the potential benefits of a merger "are compelling" but said, "We don't intend to waste our time or that of the Irish government or EU Commission over the next six months if Aer Lingus shareholders do not want the only merger offer currently available to them to secure Aer Lingus' future."

 

He indicated Ryanair is willing to raise the offer price, yet insisted that no decision has been made and that it has "no intention of increasing our offer to a price of €2 or above. We are not stupid people and will not pay stupid prices."

 

Aer Lingus reiterated its belief that the offer is "diversionary and fatally flawed" and is "unlikely to be capable of completion" because Ryanair "has failed to disclose to Aer Lingus shareholders the nature of any new remedies that it believes will enable it to secure competition approval from the European Commission. We believe this failure is unacceptable in the context of a bid that seeks to overturn a recent prohibition." It asked Ryanair to provide the details of any potential remedies and maintained it has a "vibrant future as an independent airline."

 

 

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EasyJet Sees Better First Half, Shares Rise

 

January 22, 2009

British airline easyJet said on Thursday its first-half revenues were likely to come in better than expected partly due to a rise in business passenger numbers, sending its shares up 11 percent.

 

Chief Executive Andy Harrison said he expected revenue growth per passenger to climb by a mid-single digit percentage over the six months to end March, up from earlier forecasts of low-single digits.

 

"We see a huge amount of economic uncertainty ahead -- we'll see how the business trades over the summer -- but we are currently performing better than expected," the head of the low-cost carrier said.

 

"There has been a clear flight to value and we fly to primary airports, so there has been a significant increase in business passengers," he added.

 

Harrison said the group had taken 10 percent of summer bookings to date, in line with this time last year and at similar prices, but warned it was too early to say what the end result for the crucial period would be due to the economic climate and collapse of the UK currency.

 

"We are cautious about the future -- there is a huge amount of uncertainty... It's too early to be adjusting profit forecasts," he said, reiterating that the airline would be profitable in the year to end September.

 

The news comes in contrast to profit warnings from other airlines. Air France-KLM, Europe's biggest airline, said on Wednesday it would make an operating loss of EUR200 million euros (USD$259.8 million) in its third quarter due to the worsening economy.

 

EasyJet posted first quarter revenues up 32 percent at GBP550 million pounds (USD$762.6 million) during the three months to end December.

 

EasyJet last year became embroiled in a boardroom row with founder and non-executive director Stelios Haji-Iannou over future growth strategy including new plane orders, but on Thursday reiterated plans to grow its fleet as planned.

 

The airline plans to have 197 aircraft by September 2011, up from 165 last September, due to a long-standing order with Airbus.

 

"We have a certain amount of flexibility with the Airbus contract, and we look at the fleet every quarter," Harrison said.

 

"Stelios is very bearish on the global economy, but he can see these numbers as well as we can. EasyJet is not the global economy," he added.

 

Stelios wants the airline to rein in its order of new planes and start paying a dividend to shareholders.

 

(Reuters)

 

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Ryanair Concedes Defeat In Aer Lingus Bid

 

January 22, 2009

Ryanair walked away from its latest bid for rival airline Aer Lingus on Thursday after the Irish government dismissed it on competition and valuation grounds.

 

Shares in Aer Lingus fell 10 percent to 1.25 euros, below the 1.40 euro offer price, after the government, which owns 25 percent of the carrier, rejected the hostile all-cash offer. Ryanair's response came after the close of trade.

 

It was the second time the state repulsed an offer for Aer Lingus from Ryanair after an earlier dismissal in 2006.

 

The latest bid was roughly half the price of its previous offer, which was blocked by the European Union on competition grounds.

 

The government said the latest offer undervalued Aer Lingus, adding that an aviation monopoly would not have been in the best interests of Irish consumers.

 

"Competition was a major consideration," Minister for Transport Noel Dempsey said in a statement.

 

Analysts said the long-term future of Aer Lingus, in which employees hold a 14 percent stake, was unclear.

 

Exane BNP Paribas analyst Geoff Van Klaveren said Aer Lingus has a strong cash position but would find it hard to escape a wave of consolidation from groups led by Air France-KLM, British Airways and Lufthansa.

 

"There is still the question mark what the long term future for Aer Lingus is," Van Klaveren said. "It's a rather small airline in a consolidating market. It's interesting (the government) are not in favour of a strong Irish airline group."

 

"Ryanair will respect and abide by the government's decision, which means that Ryanair's offer will not be successful, since our 90 percent acceptance condition cannot be satisfied," Ryanair said, adding that it could not rule out another offer in the future.

 

Aer Lingus' management has been striving to shrug off Ryanair's EUR748 million euro (USD$970.6 million) bid and prove that it has a profitable future on its own.

 

Aer Lingus chief executive Dermot Mannion said he was maintaining guidance for "some level of profitability at a pre-tax level" in 2009 and similarly for 2008.

 

Earlier on Thursday, Aer Lingus said it would build on a codeshare agreement with United Airlines to launch a new route between Madrid and Washington Dulles, which it later plans to develop into a full joint venture company with at least three long-haul aircraft.

 

Ryanair had based its offer on the argument a loss-making Aer Lingus focused solely on Ireland would not survive on its own in the midst of consolidation across the industry.

 

"Ryanair will now focus all of our energies on continuing to successfully grow and develop Ireland's biggest airline and we will ensure that Ireland will still be home to one of Europe's big four airline groups -- Ryanair, Air France, BA and Lufthansa," it said.

 

(Reuters)

 

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AirTran Quarterly Loss Widens On Fuel Hedges

 

January 28, 2009

"A number of our hedges that were put in place six, eight months ago were in the USD$80 to USD$100 range." -- AirTran chief executive Bob Fornaro.

AirTran Holdings, parent of AirTran Airways, said on Wednesday its quarterly net loss grew as falling oil prices diluted the value of its fuel hedges, but the company expects a profit in the first quarter.

 

AirTran said its first-quarter outlook was strong because of capacity cuts and new fuel hedges better suited to current fuel prices.

 

"We recognise we enter 2009 with a tremendous amount of uncertainty about the strength of the domestic US economy, as well as the future of oil and jet fuel prices," AirTran Chief Financial Officer Arne Haak said.

 

"It is clear to us that we cannot continue to rely upon growth in passenger travel or material improvements in passenger yields to manage through this uncertainty."

 

The the low-cost airline company's results were consistent with those posted by larger rivals, which also are grappling with volatile fuel prices and sagging travel demand.

 

The industry has downsized significantly to bolster fares. AirTran said it would shrink capacity 4 percent in 2009, with a 7 percent capacity reduction in the first quarter.

 

AirTran's fourth-quarter net loss was USD$118.4 million, compared with a loss of USD$2.1 million a year earlier.

 

The company reported a one-time loss of USD$147.7 million related to fuel hedge contracts. Excluding items, AirTran said it earned USD$54.9 million in the quarter.

 

AirTran said that, in the fourth quarter, it unwound about 78 percent of its 2009 fuel hedge contracts to mitigate the potential for more losses on oil price declines.

 

The company has now hedged about 20 percent of its anticipated fuel consumption, capping its price at an equivalent to USD$60 per barrel of oil. AirTran said it dumped old hedges that offered protection near USD$100 per barrel.

 

"A number of our hedges that were put in place six, eight months ago were in the USD$80 to USD$100 range," AirTran chief executive Bob Fornaro said. "We didn't think those hedges were going to protect us. In fact, they were hurting us."

 

AirTran's revenue grew 1 percent to USD$589.4 million and it ended the quarter with USD$340.5 million in unrestricted cash and investments.

 

(Reuters)

 

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Ryanair Deputy CEO Michael Cawley told reporters early February that the LCC is talking with both Boeing and Airbus about placing an order for 300-400 aircraft within the next two years for delivery in 2012-17.

It will sell older aircraft to clear some space but eventually is targeting 200 million passengers per year.

It transported 57.7 million in 2008 and currently operates 181 737-800s.

Cawley said there was no impediment to operating both Boeing and Airbus types; "We're large enough now to run two fleets."

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Ryanair Cuts Winter Flights At Stansted

 

July 21, 2009

Irish airline Ryanair said on Tuesday it would cut winter flights at London's Stansted Airport from October, blaming high taxes and charges.

 

Stansted is the biggest hub for Ryanair, Europe's largest budget airline, with more passenger traffic than in Dublin, the home to its corporate headquarters, where it has also imposed cuts this year.

 

Ryanair will reduce the number of aircraft based at Stansted in the winter to 24 from 40 this summer :blink: . Last year it operated 36 aircraft from Stansted in the summer and 28 in the winter.

 

Ryanair has long criticised British airport operator BAA, a unit of Ferrovial, as well as Irish operator DAA, for their high fees, and the two governments for levying what it calls "tourist taxes".

 

"Ryanair's 40 percent capacity cutback at London Stansted shows just how much Gordon Brown's GBP10 pound (USD$16.4) tourist tax and the BAA monopoly's high airport charges are damaging London and UK tourism and the British economy generally," Ryanair said.

 

(Reuters)

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August 24, 2009

 

Air Berlin reported quarterly operating profit that rose 33 percent to EUR17.6 million euros (USD$25.2 million), slightly better than expectations.

 

Second-quarter revenues fell by 3.8 percent to EUR836.2 million, the company said late on Monday, publishing key earnings one day ahead of schedule.

 

Industry body IATA said last week the slide in passenger numbers in business and first class -- the most lucrative sector for airlines -- was showing signs of stabilising. Many airlines have discounted premium tickets to keep seats filled.

 

Air Berlin said earlier this month its load factor widened for the first time this year in July as it reduced capacity faster than demand for air travel declined.

 

Airlines around the world have been suffering from rising oil prices and weak air travel demand as consumer and businesses rein in their spending. Industry body IATA has said it sees airlines losing USD$9 billion this year.

 

To limit their losses, carriers have cut capacity and grounded planes. Air Berlin in July reduced the number of seats on offer by 3.4 percent.

 

(Reuters)

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Another one bites the dust !!! (not surprisingly)

 

SkyEurope Files For Bankruptcy, Halts Flights

 

September 1, 2009

 

Low-cost airline SkyEurope has filed for bankruptcy and has suspended all flights, the firm said on Tuesday, after struggling to restructure debt and cope with sinking revenues in the economic slump.

 

The small Slovakia-based carrier, which was launched in 2001 and served mainly continental Europe, had obtained a three-month creditor protection in Slovakia in June and was trying to restructure and pay its outstanding debt.

 

However, SkyEurope said a trustee appointed by a Slovak court had assessed that the carrier did not have the funds to carry on in light of reduced passenger bookings and flight revenue.

 

The economic slowdown has hit the airline hard and its financial woes compounded its problems, causing it to lose even more passengers because of concerns it become insolvent. Passenger traffic in July declined by 37 percent year-on-year.

 

"The airline had tried to set up a bridge financing facility to remedy the liquidity shortfall but this facility was not funded at the last moment," the company said in a statement.

 

The Vienna stock exchange said it had suspended trading in SkyEurope shares with immediate effect until further notice.

 

"SkyEurope expresses its utmost regret and apologies to travellers for any inconvenience and assures that until the very end all efforts have been made to carry out all flights," the company said. "An orderly procedure will be set up to minimise discomfort to the travelling public."

 

PLANES GROUNDED

 

Prague airport had said it would bar SkyEurope landings from Tuesday because it had failed to pay outstanding bills. Vienna airport already stopped servicing SkyEurope on August 15 for not paying outstanding invoices by midnight on the previous day.

 

SkyEurope, whose chairman, Jason Bitter, resigned in July, had said also in July that it had won a new investor who was ready to inject EUR16.5 million euros (USD$23.6 million) in fresh equity and also had got a EUR5 million bridge loan.

 

The company posted a net loss of EUR18.9 million in its fiscal year ending September 30, 2008, compared with a EUR15.7 million loss in the previous fiscal year.

 

SkyEurope had a fleet of 14 aircraft with 697 employees serving 38 destinations at the end of 2008. Its flight load factor was 72.7 percent.

 

Its larger competitor, the Irish budget airline Ryanair, trimmed its full-year profit forecast a month ago when it was forced to cut fares to fill aircraft.

 

(Reuters)

 

Didn't you fly them before, Levent ?

Can remember, you were quite satisfied with their service...

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Price hike for luggage on Ryanair flights

 

Ryanair today announced a sharp increase in charges for checked luggage for bookings made from 1 October. The cost of checking in one case, weighing a maximum of 15kg, rises from £20 to £30. For passengers wishing to check in a second 15kg bag, the fee is £70. These charges are halved when booked in advance online – but even then, a family of four taking two bags each for a Mediterranean holiday will pay £400 in fees for the round trip.

 

Stephen McNamara, a Ryanair spokesman, said the increases were intended “to persuade passengers to travel with carry-on bags only”. At present about seven out of 10 Ryanair customers do not check in bags.

 

Ryanair intends to abandon the use of traditional check-in desks from next month. Instead, everyone will check in online and print out their own boarding passes. Travellers with hold baggage will go to a bag-drop desk; those with only carry-on luggage will pass through security and go straight to the departure gate. The airline said: “All passengers can avoid these optional checked-in baggage fees by travelling with carry-on baggage only.”

 

Frances Tuke of Abta, the travel association, said: “It’s another sign of desperation from our friends in the no-frills arena. They’re clearly very keen to make as much money as possible.”

 

Until three years ago, Ryanair and every other major airline gave each passenger a free checked-in bag allowance, usually 20kg. The first airline to break ranks was FlyBe, which in 2006 introduced a £2 charge for baggage – at the same time promising to reduce fares by £1. When rival carriers saw there was little passenger resistance, they followed suit. On easyJet, the fee is £8.

 

When Ryanair introduced charges, the airline said it was not intended as a revenue-raising exercise, but soon revealed it was making a profit of about €1 on each bag. The airline currently charges £10 for the first bag checked in online, and £20 for the second; the two together must not weigh more than 15kg. These fees are doubled if paid at the airport.

 

The airline’s chief executive, Michael O’Leary, has long been obsessive about cutting costs. Ryanair cancelled almost all its flights from Manchester, moving many services to Leeds/Bradford in a row over airport charges. The Irish no-frills airline now carries more than 10 per cent of intra-European air traffic; last month it averaged 222,000 passengers a day. British Airways averages 62,000.

 

BA is reducing its free baggage allowance for many passengers. For decades, transatlantic economy passengers have been able to check in two bags, of 23kg each. But for bookings made from 7 October, only one will be allowed; the second bag will be charged at £40, or £32 if booked in advance online. (The exception is for travellers to Brazil; because of a bilateral air agreement, two bags will be allowed.)

 

 

THOSE RYANAIR CHARGES

 

 

* Online check-in (print own ticket at home): £5

 

* Airport check-in (“Airport Boarding Card Re-issue”): £40

 

* “Payment handling fee”, per |passenger, per one-way flight: £5

 

* Priority boarding fee, per flight: £3

 

* Infant fee (under-2s): £20 per flight

 

* 1st piece of hold baggage (max 15kg), checked in at airport: £30 per flight

 

* 2nd piece of hold baggage (max 15kg): £70 per flight

 

* Excess baggage fee, per kilo: £15

 

* Children’s travel/car seat: £10

 

* Sports equipment, musical instrument: £30 per item, per flight

 

* Flight change fee: £35 per flight

 

* Name change: £100 per passenger

 

* A charge of £1 for the use of |on-board toilets is being explored

 

* A plan to tax heavier passengers was dropped

 

http://www.independent.co.uk/travel/news-and-advice/price-hike-for-luggage-on-ryanair-flights-1781936.html

 

:finger: :o :( :angry: =@

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THOSE RYANAIR CHARGES

 

 

* Online check-in (print own ticket at home): £5

 

* Airport check-in (“Airport Boarding Card Re-issue”): £40

 

* “Payment handling fee”, per |passenger, per one-way flight: £5

 

* Priority boarding fee, per flight: £3

 

* Infant fee (under-2s): £20 per flight

 

* 1st piece of hold baggage (max 15kg), checked in at airport: £30 per flight

 

* 2nd piece of hold baggage (max 15kg): £70 per flight

 

* Excess baggage fee, per kilo: £15

 

* Children’s travel/car seat: £10

 

* Sports equipment, musical instrument: £30 per item, per flight

 

* Flight change fee: £35 per flight

 

* Name change: £100 per passenger

 

* A charge of £1 for the use of on-board toilets is being explored

 

* A plan to tax heavier passengers was dropped

 

http://www.independent.co.uk/travel/news-and-advice/price-hike-for-luggage-on-ryanair-flights-1781936.html

 

:finger: :o :( :angry: =@

 

That's why I avoid them as the pest !!!

 

Their base-rates seem to be 'cheap', but when adding all those extras, you often are paying more than the 'full fare' airlines, like BA, KL or LH :blink:

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Ryanair Will Ultimately Buy Aer Lingus

 

September 6, 2009

 

Ryanair will ultimately succeed in buying Irish rival Aer Lingus, the low-cost airline's chief executive Michael O'Leary told the Sunday Independent newspaper.

 

Ryanair, Europe's biggest low-cost airline, has seen two of its bids for Aer Lingus fail since 2006, due to opposition from Aer Lingus' management and competition concerns voiced by the Irish government and the European Union.

 

However, Aer Lingus last month appeared to tone down its outright opposition to the alliance after announcing record operating losses and a rate of cash burn which it said was unsustainable.

 

"Ultimately, we will be allowed to buy Aer Lingus," said O'Leary, whose airline is the biggest shareholder in the former state carrier at more than 29 percent, surpassing the government's 25 percent stake.

 

"In another 18 months and with more redundancies, they'll have burned their way through the last of the cash they have and will need to be rescued," O'Leary said.

 

Aer Lingus Chief Financial Officer Sean Coyle said last month he did not know if Aer Lingus would resist another approach from Ryanair, though Chairman Colm Barrington maintained it would be difficult to cooperate with O'Leary.

 

(Reuters)

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Air Arabia To Set Up Egyptian Carrier, Third Hub

 

September 9, 2009

 

United Arab Emirates low-cost carrier Air Arabia is launching a new budget airline with an Egyptian partner, enabling it to open its third hub and diversify away from increased pressure in its home market.

 

The Arab world's largest listed airline by market value said on Wednesday it had set up the joint venture firm with Egypt's Travco Group, driving shares almost 4 percent higher on the news.

 

"The new carrier will serve Europe, Middle East and African markets and will represent Air Arabia's third hub after UAE and Morocco," Air Arabia said in a statement.

 

The airline is facing growing competition from local rivals including Kuwait's Jazeera Airways and Dubai-owned flydubai, as well as from fully-fledged carriers such as Emirates, struggling to cope with a sharp drop in international passenger travel.

 

Air Arabia already operates in Morocco, flying from its Casablanca hub from earlier this year, and said in August it planned to set up a new hub between its base at Sharjah, United Arab Emirates and North Africa to diversify its revenues and boost its catchment area.

 

Formed in 2003, it has a fleet of 20 Airbus A320 aircraft and has placed an order for 44 more A320s.

 

"The pressure is in the market because there is a lot of supply at the same time so the way they execute their business is very important... it's perfect in execution as we had Morocco, now Egypt so it shows they are on the right path," Dheeraj Lakhwani, analyst at Dubai-based Prime Emirates said.

 

Group Chief Executive Adel Ali said in an interview in August that the next three to six months would remain difficult for the industry, but said he was confident Air Arabia would be in "good shape" in 2009 and beyond.

 

The airline posted a 10 percent rise in second-quarter net profit to AED90 million dirhams (USD$24.50 million) last month.

 

Prime Emirates' Lakhwani said he expected Egyptian operations to begin within six months.

 

The aviation sector received a strong blow in 2008 first from rising fuel costs, then from the global financial crisis, although low-cost carriers typically perform better in an economic downturn than national carriers, by competing on price.

 

(Reuters)

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Air Baltic seeks to represent the three Baltic states.

 

AirBaltic said it "very much appreciates and welcomes" a meeting between the transport ministers of Latvia, Lithuania and Estonia and their discussions regarding a pan-Baltic flag carrier, while claiming that it already fits that profile. The Riga-based airline plans to expand its Tallinn operation with flights to Turku beginning Oct. 1 and is "prepared to become involved in future negotiations," according to President and CEO Bertolt Flick. "If the airline's capital base is expanded, airBaltic will expand even more rapidly than before in the Baltic states," he said.

 

AirBaltic's two shareholders, the Latvian government (52.6%) and a company owned by Flick (47.2%), are in negotiations to increase the carrier's capital. Latvia reportedly is proposing to boost capital gradually over three years to LVL30 million ($61.9 million), with each shareholder committing LVL2 million this year. Late last month, airBaltic said it remained on track to post a profit of around LVL12 million this year while strongly denying rumors that it was on the verge of bankruptcy following last year's loss. It carried 1.8 million passengers in the first eight months of 2009, up 6% year-over-year. Load factor rose 6 points to 68%.

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Southwest targets Europe, South America with long-haul low-cost model :blink: :blink:

 

Wednesday September 16, 2009

 

Southwest Airlines plans to open international routes to Europe and South America, although so far there is "no timetable" for the move, Director-Network Strategic Planning Lee Lipton said at the World Route Development Forum in Beijing.

 

"Europe and South America are our first choice. . .but currently we are still evaluating our options," Lipton said. Southwest Chairman, President and CEO Gary Kelly said last month that the LCC is "seriously considering" operating international flights to Canada, Mexico and the Caribbean as soon as 2011.

 

Lipton told he is confident that the "low-cost, long-haul" business model can work for the carrier "just as AirAsia X and Jetstar have achieved success," adding, "it could even become a trend for LCCs in the coming days."

 

Interestingly, Spring Airlines, the most successful Chinese LCC, also plans to launch international service. It intends to operate to neighboring Asian countries in time for Shanghai's Expo 2010 starting in May.

 

However, Assn. of Asia Pacific Airlines DG Andrew Herdman expressed reservations about the low-cost long-haul model, saying, "It's too early to tell if it will be a trend for the future."

 

He contrasted the normal low-cost business model--narrowbody aircraft, single-class cabins and online ticket sales--with a typical long-haul operation. "Once the LCCs enter the international market, they have to comply with international rules, which means they have to operate a two-class cabin on widebody aircraft and sell their tickets not only through their website but also by GDS," he said. "All these would make low-cost carriers look like full-service airlines, as they have a lot of convergence with carriers that choose the standard model." Herdman concluded: "I wouldn't say it can't work, but it's quite challenging."

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