tonystan
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Irish Gov Says NO To Ryanairs EI Merger

Tue Dec 18, 2012 7:13 pm

http://www.rte.ie/news/2012/1218/gov...ll-its-25-al-stake-to-ryanair.html


Well thank goodness for that! I can sleep again.
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Viscount724
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RE: Irish Gov Says NO To Ryanairs EI Merger

Tue Dec 18, 2012 10:11 pm

Quoting tonystan (Thread starter):
Well thank goodness for that! I can sleep again.

Why does the Irish government seem to think that a small country with a population of about 4.5 million, smaller than many medium-size cities, needs two major international airlines?
 
FWAERJ
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RE: Irish Gov Says NO To Ryanairs EI Merger

Tue Dec 18, 2012 10:15 pm

Will the Irish government also force FR to divest its EI shares?
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IndianicWorld
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RE: Irish Gov Says NO To Ryanairs EI Merger

Tue Dec 18, 2012 10:25 pm

Quoting Viscount724 (Reply 1):
Why does the Irish government seem to think that a small country with a population of about 4.5 million, smaller than many medium-size cities, needs two major international airlines?

It is probably the same thing that many smaller countries think they can do. It seems great to have 2 airlines based in a country, driving competition, but whether or not it is truly needed is another story.

In the case of Ireland, there is very little in the way of domestic flying, especially with competition, and international routes have a significant amount of other players on the routes into the country.
 
strandedinbgm
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RE: Irish Gov Says NO To Ryanairs EI Merger

Tue Dec 18, 2012 10:26 pm

Quoting Viscount724 (Reply 1):
Why does the Irish government seem to think that a small country with a population of about 4.5 million, smaller than many medium-size cities, needs two major international airlines?

Jobs & competition. They have an obligation to their people.
It's 737s, 747s and 380s. Not 737's, 747's and 380's. Learn to use the apostrophe for crying out loud.
 
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yyz717
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RE: Irish Gov Says NO To Ryanairs EI Merger

Tue Dec 18, 2012 10:27 pm

Why can't the Irish government mind its own business and keep out of the (for profit and competitive) airline industry?

Irish consumers do not benefit from this government interference in the marketplace.
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kaitak
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RE: Irish Gov Says NO To Ryanairs EI Merger

Tue Dec 18, 2012 10:48 pm

Quoting yyz717 (Reply 5):
Why can't the Irish government mind its own business and keep out of the (for profit and competitive) airline industry?

Irish consumers do not benefit from this government interference in the marketplace.

It's not interference as such; it has a shareholding and it is proposing to sell that shareholding. Like any other shareholder, it has a choice as to how best to do that. Furthermore, as the government, it has a responsibility to do that in a manner which does more than just bring it revenue. It has to do so in a way which advances national economic interests. These are absolutely not served by allowing a carrier like FR to have a monopoly on key short haul routes. FR has its corporate strategies and its method of behaving; the government has its national economic strategies, which it has a right (and an obligation) to have. The government needs to ensure that there is competition; allowing FR to take over EI would be catastrophic.

The government has done the right thing.

Quoting FWAERJ (Reply 2):
Will the Irish government also force FR to divest its EI shares?

It does not have the power to do this. However, the British competition authority is conducting its own investigation into FR's shareholding in Aer Lingus and this could potentially result in FR being required to sell its shareholding.

However, I believe that when the EU Commission finally decides, in about March, to veto Ryanair's proposal, it (FR) will decide to sell it for as good a profit as it can get. Etihad is interested and my hope is that they will acquire the shareholding. However, FR being FR, I think they will make make things difficult.
 
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yyz717
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RE: Irish Gov Says NO To Ryanairs EI Merger

Tue Dec 18, 2012 10:54 pm

Quoting kaitak (Reply 6):
It has to do so in a way which advances national economic interests.

The Irish government's only national economic interest are (or should be) non-interference in any competitive industry. In this regard, the Irish govt has failed.

Quoting kaitak (Reply 6):
These are absolutely not served by allowing a carrier like FR to have a monopoly on key short haul routes.

That's for the market place to decide, not the Irish government. There is nothing stopping a new carrier from competing againsts FR.

Quoting kaitak (Reply 6):
The government needs to ensure that there is competition; allowing FR to take over EI would be catastrophic.

Let the market place decide. By propping up a money-losing EI, the Irish government is hurting competition, not helping it.
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al2637
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RE: Irish Gov Says NO To Ryanairs EI Merger

Tue Dec 18, 2012 11:12 pm

Quoting yyz717 (Reply 7):
By propping up a money-losing EI

Care to explain that one?

As a shareholder the government 100% has a right to determine EI's future... in addition to any national strategic interest.
 
TeamintheSky
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RE: Irish Gov Says NO To Ryanairs EI Merger

Tue Dec 18, 2012 11:33 pm

Quoting yyz717 (Reply 7):
By propping up a money-losing EI, the Irish government is hurting competition, not helping it.

Not only that, but I believe EI has had stable revenue and a net profit for two years.

I would be the first to admit that FR stirs strong emotions in the flying community. I, myself, have had three flights with FR and refuse to fly them. And typically, I agree with those saying that the government has no business determining the market.

However, in this case, I would absolutely hate for EI, who has been perfectly pleasant on every flight I have taken with them, to be taken over by the corrosive culture that FR has stemming from the top of their organization. I understand that FR is wildly popular and makes a profit, but I have taken LLC's such as U2 and AK, and both also make money and are pleasant to fly.

Kind Regards,

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shamrock350
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RE: Irish Gov Says NO To Ryanairs EI Merger

Tue Dec 18, 2012 11:43 pm

These threads always end up the same, a bit of research wouldn't hurt before commenting.

A few myths that crop up whenever this is mentioned;

Ireland is apparently too small for two carriers - If that were the case one or both of them would be loss making, this isn't the case. Aer Lingus is profitable and growing within its core Irish market and while Ryanair doesn't go into detail about what parts of its network is profitable I think we can safely assume they are profitable in Ireland. Neither airline needs the other in order to be profitable.

Aer Lingus is small, loss making, going nowhere ect. - Aer Lingus is a relatively small airline, that much is true but within its core Irish market they are huge, possibly even larger than Ryanair on the island of Ireland! Aer Lingus is profitable, reported an operating profit of EUR49.1 million in 2011 in a very challenging home market. Going nowhere? Aer Lingus plan to connect Ireland with the world, either with the their own metal or through partnerships which has seen them sign code share agreements with Etihad who have also expressed interest in purchasing a higher stake in the airline after acquiring 3% earlier this year. Aer Lingus also works with Aer Arann who now operate solely as Aer Lingus Regional under a franchise deal connecting regional points across the UK and Ireland to the Aer Lingus transatlantic network from Dublin. Not the plans of an airline with no direction.

The Irish airports - We have seen many occasions where Ryanair has a spat with an airport operator about costs and fees, this usually results in Ryanair pulling out, leaving the airport with very little business usually after investing a lot into Ryanair's services. Michael O'Leary has had a number of very public disagreements with the Irish government and its airports, it all but pulled out of Shannon a few years ago after a spat so a merged Ryanair/Aer Lingus would give this airline a complete stranglehold on the main airports with more than 80% of the traffic in some cases.

Other airlines could compete - Which airline in their right mind would want to compete with a combined Ryanair/Aer Lingus in their home market? As part of the remedies package proposed by Ryanair they offered FlyBe the option, they declined. British Airways was also an option but they've made no secret in the fact they only want the LHR slots and their lack of commitment to the current DUB route proves it, going from a much hyped 8 daily to 5/4 daily next summer, their cost base can't even compete with Aer Lingus from LHR let alone Ryanair from DUB. No other airline in Europe has the experience in fighting Ryanair head to head and no other airline has done it as successfully as Aer Lingus, allowing the two to merge removes that competition and still doesn't guarantee that another airline would be happy to enter the market. DUB has a chance at seeing new airlines but airports such as Cork, Shannon and Knock are much smaller markets and have little hope of fresh competition should a take over happen.

The government should keep its nose out - Well as a 25% shareholder it has every right to keep its nose exactly where it is!

A take over would be "bye bye Aer Lingus" and although Ryanair still claims that the two airlines would remain sperate, as recently as this week it was revealed that Ryanair has signed a MOU with BA/IAG to sell 80% of Aer Lingus LHR slots, LHR being one of the strongest routes in their network with valuable onward connections for Ireland. I'm sure slots at JFK, FRA, ORD, BOS, CDG and MAD were also up for grabs so Ryanair has pretty much revealed it's plans for Aer Lingus, closure. Ryanair gets a monopoly in Ireland, can stick two fingers up at the government and all the airlines everywhere ele get their hands on slots at hub airports.

Shamrock350
 
vv701
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RE: Irish Gov Says NO To Ryanairs EI Merger

Wed Dec 19, 2012 12:21 am

Quoting al2637 (Reply 8):
As a shareholder the government 100% has a right to determine EI's future...

But FR owns 29.4 per cent of EI and the Irish government "only" 25.4 per cent. If my math is correct that means that if the government has a right to determine EI's future, FR has an even bigger right to do the same. However both have only a minority shareholding. So clearly they each need to convince the owners of the other 45.2 per cent of EI's capital of the merits of their case. Just saying "No" is undemocratic.
 
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shamrock604
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RE: Irish Gov Says NO To Ryanairs EI Merger

Wed Dec 19, 2012 12:32 am

Quoting Viscount724 (Reply 1):
Quoting yyz717 (Reply 5):

Oh dear.

EI is not loss making, nor is it going nowhere.

Ireland evidently IS a large enough market to support two carriers - its been doing so for quite a while and they are both profitable.

The Irish people dont want this merger.

Our government has for once acted in our interests.
 
EI564
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RE: Irish Gov Says NO To Ryanairs EI Merger

Wed Dec 19, 2012 12:38 am

Quoting VV701 (Reply 11):
Just saying "No" is undemocratic.

I don't think "undemocractic" is the right word to use. We are talking shareholdings in a company and not an election by the people.

The government has said that it wouldn't sell its stake to Ryanair. Ryanair can still try to buy the stakes from the other shareholders. Until the EU says forbids it.
 
AeroWesty
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RE: Irish Gov Says NO To Ryanairs EI Merger

Wed Dec 19, 2012 12:46 am

Quoting yyz717 (Reply 5):
Irish consumers do not benefit from this government interference in the marketplace.

I generally agree with you on this, which is one reason why I don't understand the reluctance of the Canadian gov't to allow more rights by UAE carriers to serve Canada. (I say this not understanding every nuance of the situation, just having skimmed some of the arguments.) Being from the States, I pretty much support open skies with 5th and 6th freedom authorities granted along any natural route, e.g. the difference between granting a carrier such as SQ 5th's to the U.S. via Asia, but not via Australia. (But I don't want to turn this into a UAE-Canada debate, nor an SQ-Australia debate, I'm just using those to explain my thought process.)

I do have to wonder though, if the Irish gov't considered the economic impact from the possibility of FR possibly eliminating long-haul flights from Ireland in their decision-making process, even though they only cited anti-competitive reasons in their denial.

Has MOL ever make any statements regarding maintaining/eliminating/expanding long-haul international flights from Ireland as part of the bid for EI?
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waly777
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RE: Irish Gov Says NO To Ryanairs EI Merger

Wed Dec 19, 2012 1:04 am

Wonderful news indeed!

Both carriers are profitable and cater to different markets, I feel the government was right to deny Ryanair's proposal because the government is obligated to keep the market competitive. Saying yes to Ryanair would have given them a monopoly which I'm sure any smart government would not allow considering how they treat airports by cancelling routes or substantially downsizing service when they don't get their way.

The Irish public certainly deserves a choice and government did just that by keeping competition alive.
The test of first-rate intelligence is the ability to hold 2 opposed ideas in the mind concurrently, and still function
 
vv701
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RE: Irish Gov Says NO To Ryanairs EI Merger

Wed Dec 19, 2012 3:05 am

Quoting EI564 (Reply 13):
I don't think "undemocractic" is the right word to use. We are talking shareholdings in a company and not an election by the people.

We are talking of the votes of shareholders to determine the future of a company (unless the competition authorities - in this case the EC - intervene).

The Irish government holds 24.5 per cent of EI's shares and therefore controls 24.5 per cent of the votes that will determine EI's future. This clearly is not sufficient to even guarantee a majority, particularly as FR's holding is bigger. However it is suggested in Reply 8 that the Irish government's shareholding is large enough for it to be able to determine the future of EI "100%".

If this were the case the Irish government would need to disenfranchise other shareholders. Taking away their voting rights to further its own objectives surely cannot be regarded as democratic can it?
 
NWADTWE16
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RE: Irish Gov Says NO To Ryanairs EI Merger

Wed Dec 19, 2012 3:58 am

THis is great news! Long live the SHAMROCK~
 
cofannyc
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RE: Irish Gov Says NO To Ryanairs EI Merger

Wed Dec 19, 2012 4:11 am

Quoting VV701 (Reply 16):
However it is suggested in Reply 8 that the Irish government's shareholding is large enough for it to be able to determine the future of EI "100%".

I think you're putting the 100% in the wrong place in that reply. I don't think they meant that the Government of Ireland was the only entity that had a say in EI's future. I read it as they were defending the Government's right to have a say against a poster who believes they should stay silent and let whatever happens happen.
 
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SKAirbus
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RE: Irish Gov Says NO To Ryanairs EI Merger

Wed Dec 19, 2012 9:22 am

I don't understand how Aer Lingus and Ryanair can compete effectively and independently of each other when Ryanair has a relatively large share in Aer Lingus.
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al2637
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RE: Irish Gov Says NO To Ryanairs EI Merger

Wed Dec 19, 2012 9:32 am

Quoting al2637 (Reply 8):
the government 100% has a right to determine EI's future

To clarify, I meant the government totally has a right to determine *it's* shareholding.

Given they own 25.1%, that is enough to block a takeover under stock exchange rules.
 
Fabo
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RE: Irish Gov Says NO To Ryanairs EI Merger

Wed Dec 19, 2012 11:57 am

Quoting yyz717 (Reply 7):
The Irish government's only national economic interest are (or should be) non-interference in any competitive industry.

Seriously, do you know what a monopoly is, what it means for the end customer, and why it is generally frowned upon?

Hint 1: When there is a monopoly, it is no more a competitive industry.
Hint 2: Monopoly is big enough to be able to block any newcomers who dont play by its rules, or try to get threateningly big. Especially so in this case, where FR could cover losses from DUB from other operations all around Europe.
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Jambost
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RE: Irish Gov Says NO To Ryanairs EI Merger

Wed Dec 19, 2012 2:08 pm

Great news, In my own opinion:

Supply and demand supports both carriers unaided. Plus who would want FR as their national flag carrier!?

I am proud of what FR have achieved to become a major cheap European airline but I am also pleased that they have failed to wipe out the national carrier that motivated them to become the success they are now. EI struggled at times but restructured to fight out the FR expansion, with great results EI continue to succeed to serve Ireland as any national carrier would aim to do.

Quoting Viscount724 (Reply 1):

EI and FR serve the Republic and Northern Ireland. Population served can be increased to an estimated 6 million.

Plus U2, BE, LS, also have bases on the Island in Northern Ireland, so at least 5 airlines basing operations to serve Ireland. Not including the cargo operators.

Can you also explain why Iceland can support 2 airlines with a population of 319,000 ?
1APR14 Ireland Direct, 3 A380-9LR,Equiped Irish Bar & Casino. All Y+ seating. Serving DUB-PER-SYD/MEL
 
ual747den
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RE: Irish Gov Says NO To Ryanairs EI Merger

Wed Dec 19, 2012 7:11 pm

Quoting yyz717 (Reply 5):

Why can't the Irish government mind its own business and keep out of the (for profit and competitive) airline industry?

Irish consumers do not benefit from this government interference in the marketplace.

You seem to be very confused, it is the business of any government to keep industries competitive and block monopolies. Your government does the same thing within the airline industry just like it should. Irish consumers do benefit from the government protecting consumer interests and doing whatever it can to keep the industry competitive by blocking sales and mergers that would create a monopoly. This is exactly what the government should be doing even if they were not a major shareholder.
/// UNITED AIRLINES
 
Viscount724
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RE: Irish Gov Says NO To Ryanairs EI Merger

Wed Dec 19, 2012 10:54 pm

Quoting Jambost (Reply 22):
Can you also explain why Iceland can support 2 airlines with a population of 319,000 ?

But as far as I know the Icelandic government isn't interfering as they seem to be doing in Ireland. I have no problem with any number of airlines anywhere as it's a free market (at least in the EU), but why should governments still have any ownership share in airlines (or any other business?)
 
Eagleboy
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RE: Irish Gov Says NO To Ryanairs EI Merger

Thu Dec 20, 2012 2:56 am

Quoting yyz717 (Reply 7):
There is nothing stopping a new carrier from competing against FR.

Well FR is a pretty big obstacle from the start.

Quoting yyz717 (Reply 7):
By propping up a money-losing EI, the Irish government is hurting competition, not helping it.

EI are 1 of only 3 currently profitable shorthaul operation in Europe. How exactly is keeping options for the public open deemed to be 'hurting competition'?

Quoting waly777 (Reply 15):
Both carriers are profitable and cater to different markets,

Hence both being profitable at present, which is the worst economic downturn in Irish history........

Quoting SKAirbus (Reply 19):
I don't understand how Aer Lingus and Ryanair can compete effectively and independently of each other when Ryanair has a relatively large share in Aer Lingus.

FR have no control over EI operations. They are merely a large shareholder,no board representative.

Quoting Viscount724 (Reply 24):
But as far as I know the Icelandic government isn't interfering as they seem to be doing in Ireland.

The Irish Govt are not interfering.........as a 25.1% shareholder they were made an business offer by FR, they have declined this offer. Its a decision by a shareholder. How is this 'interfering'?
 
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Jambost
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RE: Irish Gov Says NO To Ryanairs EI Merger

Thu Dec 20, 2012 11:36 am

Thread title is a little misleading, "Shareholders Says NO To Ryanairs EI Merger" would be more accurate.

Quoting EagleBoy (Reply 25):
The Irish Govt are not interfering.........as a 25.1% shareholder they were made an business offer by FR, they have declined this offer. Its a decision by a shareholder. How is this 'interfering'?


        
1APR14 Ireland Direct, 3 A380-9LR,Equiped Irish Bar & Casino. All Y+ seating. Serving DUB-PER-SYD/MEL
 
Pe@rson
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RE: Irish Gov Says NO To Ryanairs EI Merger

Thu Dec 20, 2012 12:04 pm

This was as unsurprising as MOL thinking up something else to say.
"Everyone writing for the Telegraph knows that the way to grab eyeballs is with Ryanair and/or sex."

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