Sponsor Message:
Civil Aviation Forum
My Starred Topics | Profile | New Topic | Forum Index | Help | Search 
Ryanair In STN Takeover?!?  
User currently offlineSTNDEICER From United Kingdom, joined Mar 2006, 44 posts, RR: 0
Posted (6 years 4 months 2 weeks 2 days 6 hours ago) and read 7181 times:

Michael O'Leary, chief executive of Ryanair, said the airline is interested in launching a takeover bid for Stansted Airport, The Daily Telegraph reports. He told the newspaper that he was convinced the UK Competition Commission's investigation into Stansted-owner BAA would recommend breaking up the airports operator, which would open the door for a bid of around £2 billion.

Mr O'Leary said he would like to prove to BAA and the regulators that he can run it much better than they can. He would increase passenger numbers from 24 million to 40 million by halving landing fees and building a low cost second runway and terminal, 'instead of the £4bn Taj Mahal BAA's planning - and we could bury Harry Bush [the Civil Aviation Authority's economic regulator] under the concrete on the ramp.’

The 'outspoken Irishman' told the Telegraph that acquiring Stansted was one of his two main ambitions before he bows out as chief executive of the low-fare carrier - the other being the purchase of rival Irish airline Aer Lingus, in which Ryanair holds a 29.8% stake.

Responding to the interview, Goodbody Stockbrokers analyst John Goode said: ‘While we believe the break up of BAA would improve competition and, therefore, benefit airlines, a Ryanair bid would likely come under microscopic scrutiny from a competition perspective, as it is Ryanair's largest base.'

Mr O'Leary also reiterated his decision to remain in his post for ‘two to three years’, adding: ‘I was ready to step down a year ago because it was getting boring, but now everyone says we're in the s--- so I'm definitely staying

20 replies: All unread, jump to last
 
User currently offlineJoeCanuck From Canada, joined Dec 2005, 5478 posts, RR: 31
Reply 1, posted (6 years 4 months 2 weeks 2 days 4 hours ago) and read 7103 times:

Just think how boring the airline business would be without this guy...Love him or hate him; the establishment would get much too complacent without him.


What the...?
User currently offlineMoo From Falkland Islands, joined May 2007, 4089 posts, RR: 4
Reply 2, posted (6 years 4 months 2 weeks 2 days 2 hours ago) and read 6878 times:

I highly doubt the Competition Commission would allow an airline to own an airport in the UK - far too much chance of abuse there for the owning airline verses other airlines using the airport.

User currently offlineJoeCanuck From Canada, joined Dec 2005, 5478 posts, RR: 31
Reply 3, posted (6 years 4 months 2 weeks 2 days 1 hour ago) and read 6804 times:

Not at all like one company having complete control of all London airports. Not a lot of competition there.

If you want some fees, try transiting through LHR T3 shopping center. Their slogan should be, "You're trapped here, we both know it so just quit struggling and take it...".



What the...?
User currently offlineVfw614 From Germany, joined Dec 2001, 4062 posts, RR: 5
Reply 4, posted (6 years 4 months 2 weeks 2 days 1 hour ago) and read 6787 times:

It is always a good idea to check whether the owner of something you want to buy is willing to sell.... Not sure if MOL is sticking to this rule. Me thinks he is not.

Maybe he is now ventilating hot air about airports as he has been silenced by a court injunction in Germany that prevents him from blabbering about another airline being on the brink of insolvency.


User currently offlineBA787 From United Kingdom, joined Jun 2006, 2596 posts, RR: 7
Reply 5, posted (6 years 4 months 2 weeks 2 days 1 hour ago) and read 6738 times:

Well, since we're dreaming here, wouldn't it be nice if BA purchased Heathrow? Big grin

Credit to this guy, he has made this industry interesting. But, I fear, he may have a task to pull FR through the storm that is rising fuel prices. No amount of spin will help him there. But it sounds like he wants a challenge, so I wish him good luck.

BA787


User currently offlineJoost From Netherlands, joined Apr 2005, 3186 posts, RR: 4
Reply 6, posted (6 years 4 months 2 weeks 2 days 1 hour ago) and read 6732 times:



Quoting STNDEICER (Thread starter):

Maybe you should add your source: http://www.telegraph.co.uk/money/mai...ml=/money/2008/08/08/cnryan108.xml

Quoting Swiftski (Reply 7):

Can nothing Ryanair related be discussed properly on this forum? How tiring are these comments about "pay to walk, pay to pee, pay to blink" etc?

 thumbsup 

Quoting Vfw614 (Reply 6):
It is always a good idea to check whether the owner of something you want to buy is willing to sell....

The owner is not willing to sell. However, British anti-trust committees are doing research whether they might oblige the owner (BAA/Ferrovial) to sell off one of the London airports.

Quoting Moo (Reply 3):
I highly doubt the Competition Commission would allow an airline to own an airport in the UK - far too much chance of abuse there for the owning airline verses other airlines using the airport.

True, but the current situation isn't perfect either. The Telegraph article mentions that "the CAA would require undertakings to ensure Ryanair was not given preferential treatment at the expense of rival carriers at the airport, notably Easyjet"; this implies to me that they at least consider O'Leary being serious.

Some thoughts:
* When slot coordination stays with ACL, equal slot distribution is guaranteed
* All airside-activities (baggage handling, fuel, etc) are already under full competition (hence Servisair, Globeground and other companies competing at every airport) and the situation will remain the same.
* A price cap can be defined for landing fees. (difficult though, how will it be capped? a rule like "landings fees cannot be higher than LGW" can still lead to high fees).
* The CAA could oblige the owner to be helpful by leasing out complete (parts of) terminals, to competitors like easyJet
* Would a consortium of Ryanair, easyJet and some retail companies be a good candidate?


User currently offlineVfw614 From Germany, joined Dec 2001, 4062 posts, RR: 5
Reply 7, posted (6 years 4 months 2 weeks 2 days ago) and read 6679 times:



Quoting Joost (Reply 6):
The owner is not willing to sell. However, British anti-trust committees are doing research whether they might oblige the owner (BAA/Ferrovial) to sell off one of the London airports.

Ture, but by all accounts we are talking about LGW here. From an anti-trust perspective that makes much more sense as there is a greater market-overlap between the two.


User currently offlineJoost From Netherlands, joined Apr 2005, 3186 posts, RR: 4
Reply 8, posted (6 years 4 months 2 weeks 2 days ago) and read 6621 times:



Quoting Vfw614 (Reply 7):
Ture, but by all accounts we are talking about LGW here. From an anti-trust perspective that makes much more sense as there is a greater market-overlap between the two.

IIRC, CAA has indicated that they LGW is the preferred airport to sell, implying that STN would be debatable too. I agree with you about the preference for LGW, by the way.

My impression is that LGW is the least attractive of the three airports, as it has practically no growth opportunities. The airport is completely saturated runway-wise and chances for an additional runway are close to zero. STN, on the other hand, has planning permission for a 2nd runway and terminal.


User currently offlineBongodog1964 From United Kingdom, joined Oct 2006, 3684 posts, RR: 3
Reply 9, posted (6 years 4 months 2 weeks 1 day 22 hours ago) and read 6476 times:

If you read the article in the Telegraph carefully, youy can see that Mr O'Learys numbers just don't add up

He states that he thinks STN is worth about £2 billion in its present form. He then says that he could build a 2nd runway and 2nd terminal for £400 million, far below BAA's estimates, because as he says BAA wants to build a "Taj Mahal"

So if he can build a runway and terminal for 16 million passengers/year for £400 million; why would you want to pay £2 billion for the existing single runway and terminal handling 24 million passengers/year ?

The simple truth is that the purchase of the additional land all the infrastructure and the construction of an additional runway and terminal would cost far more than £400 million. Its no good building a runway and terminal if it doesn't have road and rail links, car parks etc.

To give an example the Higways agency is planning to widen 20 odd miles of the A14 in Cambridgeshire at a cost of £1 billion. The main runway alone will have the same area as 5 miles or more of Motorway.


User currently offlineVfw614 From Germany, joined Dec 2001, 4062 posts, RR: 5
Reply 10, posted (6 years 4 months 2 weeks 1 day 19 hours ago) and read 6231 times:

Given that a forced sale of LGW will be much more likely, it would be a more interesting strategy for MOL to buy this airport and then triple fees over there to kill off Easyjet...  gnasher 

User currently offlineAirNZ From , joined Dec 1969, posts, RR:
Reply 11, posted (6 years 4 months 2 weeks 1 day 18 hours ago) and read 5863 times:



Quoting Bongodog1964 (Reply 9):
So if he can build a runway and terminal for 16 million passengers/year for £400 million; why would you want to pay £2 billion for the existing single runway and terminal handling 24 million passengers/year ?

The simple truth is that the purchase of the additional land all the infrastructure and the construction of an additional runway and terminal would cost far more than £400 million. Its no good building a runway and terminal if it doesn't have road and rail links, car parks etc.

Ah!....but an extension of that 'simple truth' (which you omitted to mention) is that it's of no use whatever in being able to build a new runway and terminal for £400 million if you have nowhere to put them!! In other words, he would need to purchase STN as it stands, and if the market value of that is £2 billion then that is what is required to obtain it in the first place.


User currently offlineGilesdavies From United Kingdom, joined Dec 2003, 3053 posts, RR: 2
Reply 12, posted (6 years 4 months 2 weeks 1 day 13 hours ago) and read 4755 times:

LGW is likely to be the airport BAA are forced to sell, and seems to be the airport BAA want to be rid of if they have to sell any of their London airports... MAG (The Manchester Airport Group) have already expressed an interest in the airport and I think this would be the sensible choice...

MAG already have experience of running a similar sized airport - MAN and LGW shares very similar markets. Both with being major Charter baes for the North and South of England respectively and a similar mix of LCC and Full Service airlines to similr destinations...

Ryanair will never be allowed to take over STN, its how airports are operated or owned in the UK... Im not exactly sure it would go down well with the likes of Air Berlin, GermanWings or easyJet for example having to pay their airport fees to Ryanair!

In the early days of easyJet, when their largest hub and only London base was LTN, the council who owned the airport decided to lease the airport out to a consortium with Barclays Capital being one of the owners... Airport fees increased and this infuriated easyJet and started a huge campaign that Barclays were only out to make a quick buck and increase fees, Stelios tried to takeover the airport and was blocked from the word go. He was however right, even though Barclays had insisted they were there for the long run and would see out the 30yr lease, they sold their stake to TBI a few years later making huge profits... During that time they failed to invest in the airport too!


User currently offlineVV701 From United Kingdom, joined Aug 2005, 7737 posts, RR: 17
Reply 13, posted (6 years 4 months 2 weeks 1 day 12 hours ago) and read 4448 times:

This is typical of MOL. It is defence by attack. FR is being sued by BAA for non-payment of landing fees at STN so he threatens to buy them. Clever eh? But will it work?

The BAA case against FR has already been discussed in another thread here on a-net.

The original report on the BAA case can be read at:

http://news.bbc.co.uk/1/hi/business/7543011.stm


User currently offlineSq2ams From , joined Dec 1969, posts, RR:
Reply 14, posted (6 years 4 months 2 weeks 1 day 11 hours ago) and read 4390 times:

Nothing surprises me about O'Leary and Ryanair. I won't fly his airline but I like his moxey. He is not afraid of anyone and would gladly take them on in court to try prove a point. He comes across as a loon but he's got guts. BTW STN is a great airport, I'm not sure what he would do to it if he got a hold of it. I'm sure he would have fee's for everything in the airport.

User currently offlineVV701 From United Kingdom, joined Aug 2005, 7737 posts, RR: 17
Reply 15, posted (6 years 4 months 2 weeks 1 day 10 hours ago) and read 4157 times:



Quoting Gilesdavies (Reply 12):
In the early days of easyJet, when their largest hub and only London base was LTN, the council who owned the airport decided to lease the airport out to a consortium with Barclays Capital being one of the owners... Airport fees increased and this infuriated easyJet and started a huge campaign that Barclays were only out to make a quick buck and increase fees, Stelios tried to takeover the airport and was blocked from the word go. He was however right, even though Barclays had insisted they were there for the long run and would see out the 30yr lease, they sold their stake to TBI a few years later making huge profits... During that time they failed to invest in the airport too!

This is incorrect. The actual history is as follows:

The airport was and still is owned by Luton Borough Council. To remain viable in the mid to late 1980s it required redevelopment. The only way that the council could afford to redevelop it itself would have been to take out a commercial loan that would be financed by its Council Tax Payers. This was unacceptable to the council and to Luton Borough residents.

So to ensure a future for the airport the Council sought a financial company or consortium to buy Luton Airport Ltd. This was a company that the Council had set up and to which they had granted a 30 year management contract while retaining ownership of the airport.

In August 1997 Luton Airport Ltd was bought by the consortium led by Barclays Capital, a subsidiary of Barclays Bank plc.

The consortium financed an £80 million Council planned investment in the airport including the construction of the £40 million new terminal. This investment was completed as early as the autumn of 1999. The increase in charges that you refer to was to cover the financing costs of £80 million for the redevelopment.

The Barclays Capital consortium's job was now done. They had used their expertise in financing to turn the Council's redevelopment plans into reality. But they had no expertise in running an airport. So they sought to sell Luton Airport Ltd to a company that had such expertise.

In March 2001, 18 months after the redevelopment of the airport and the expenditure of £80 million they sold Luton Airport Ltd to a specialist company with airport management expertise, TBI.

So, no, the Barclays Capital consortium was never into Luton Airport Ltd for the long term. They were their to finance the Borough Council's redevelopment plans.

And no, the Barclays Consortium were not out to make a quick buck but increased the airport fees to cover the financing costs (interest payments) of their £80 million expenditure.

And no, by the time the Barclays Capital consortium sold out of Luton Airport Ltd they had not failed to invest in Luton Airport. As we have already seen they had invested £80 million.

And no they did not make a huge profit when they sold Luton Airport Ltd. The difference between their buying and selling price certainly made a profit but it also covered their £80 million expenditure that you have said they never made.

And as for the Barclays Capital consortium insisting they were into Luton Airport Ltd for the long run fortunately (as they had no expertise in running airports) that was wrong too.

If you require further details why not visit the Luton Airport web site, click on 'About Us' and then click on 'History'. It is all there, and more.


User currently offlineAmricanShamrok From Ireland, joined May 2008, 3004 posts, RR: 0
Reply 16, posted (6 years 4 months 2 weeks 1 day 9 hours ago) and read 3970 times:

I hope he wins the bid. The BAA monopoly is bad news...


Shannon-Chicago
User currently offlineVfw614 From Germany, joined Dec 2001, 4062 posts, RR: 5
Reply 17, posted (6 years 4 months 2 weeks 1 day 3 hours ago) and read 3489 times:

Matter closed:

http://www.uk-airport-news.info/stansted-airport-news-090808b.htm

He was not serious...

I really hope that the madia will learn that it is not worth jumping on the band-waggon whenever MOL starts blabbering.


User currently offlineR2rho From Germany, joined Feb 2007, 2776 posts, RR: 1
Reply 18, posted (6 years 4 months 2 weeks 1 day ago) and read 3388 times:

In any case, this cannot (or should not) happen, as an airline owning an airport would be what you call "vertical integration", which has given disastruous effects in the past as far as infrastructures are concerned, and is also very negative for competition.

In any case, BAA is not the real problem. The entire London airport system is flawed in its conception, and there has been and still is a serious lack of strategic vision and planning on the side of the authorities. Changing airport ownership will not solve any of those problems.


User currently offlineStar_world From Ireland, joined Jun 2001, 1234 posts, RR: 0
Reply 19, posted (6 years 4 months 2 weeks 19 hours ago) and read 3221 times:

People are missing the point here slightly. There is no way that Ryanair would either want to, or be allowed to buy Stansted. But what MOL has done, successfully I would say, is to very clearly draw attention to the issue of the landing fees that BAA are charging. It opens up the possibility of another group putting forward a bid to purchase the airport, with a view to finding a more cost effective way of expanding it than what BAA are currently proposing.

You have to realise that everything that MOL does is calculated to get a particular effect from the media - he is one of the best people in the industry at doing this. Hardly what I would call 'blabbering'.


User currently offlineVfw614 From Germany, joined Dec 2001, 4062 posts, RR: 5
Reply 20, posted (6 years 4 months 2 weeks 18 hours ago) and read 3178 times:

Realistically, if somebody forks out 2bn or so to buy an airport like STN, the first thing on his mind would be to recoup the investment. Not sure if halving the fees is exactly what he would do in such a scenario. By all accounts, I cannot remember an airprt sale which resulted in fees being significantly lowered. Did Ferrovial do it when they acquired the BAA?

Runway capacity in the London area is scarce, and as a scarce ressource it comes at a premium. MOL can complain as long as he wants, he will never be able to get deal such as at places like CRL, BGY, HHN - who are more than desperate for clients - at STN.


Top Of Page
Forum Index

This topic is archived and can not be replied to any more.

Printer friendly format

Similar topics:More similar topics...
Ryanair In Talks With ISP To Begin '08 NY Flights posted Thu Sep 27 2007 21:57:05 by Nycfly75
Ryanair In Trouble Over Environmental Claims posted Wed Jul 18 2007 17:42:41 by Revo
Transit In STN posted Wed Apr 25 2007 10:04:12 by Stylo777
MOL: I Think I'll Be Gone From Ryanair In 2-3 Yrs posted Sat Feb 10 2007 12:19:05 by Braybuddy
Ryanair In Talks Re TLV posted Fri Nov 10 2006 15:46:17 by TLVFred
Ryanair In The News Again! posted Mon Nov 28 2005 20:29:20 by Soups
Michael O'Leary To Leave Ryanair In 2008 posted Sun Nov 20 2005 10:09:20 by Gkirk
Ryanair In Talks For New Irish Domestic Routes posted Sun Sep 25 2005 14:45:20 by EI321
Interesting Article Concerning Ryanair In France posted Wed Jun 1 2005 19:49:11 by Beaucaire
Americans, Would You Like A Ryanair In The USA? posted Sun May 15 2005 10:32:18 by F.pier