Moderators: jsumali2, richierich, ua900, PanAm_DC10, hOMSaR

 
User avatar
lightsaber
Moderator
Posts: 22893
Joined: Wed Jan 19, 2005 10:55 pm

Re: easyJet rejects takeover bid from Wizz

Fri Sep 10, 2021 12:00 pm

I noted EasyJet has cut more seats than the other LCCs. No this doesn't tell us revenue...
https://centreforaviation.com/analysis/ ... ity-573955

The ultra LCC Wizz Air Group has only 30% of the seats of Ryanair Group, but is at 96.4% of 2019 capacity in the week of 6-Sep-2021 (source: CAPA/OAG). It is projected to reach well over 100% at the start of the winter season (126% in the week of 25-Oct-2021 and over 160% in the following week).

The Turkish ultra LCC Pegasus Airlines, one fifth the size of Ryanair by seats, is at 94% and projected to exceed 100% in Nov-2021.

Ryanair – Europe's leading LCC, and leading airline group of any business model by seat capacity – is currently at 91.7% of its 2019 seats. Current schedules project that the ultra LCC will be back over 100% of 2019 levels at the start of the winter season in late Oct-2021.

EasyJet is at 61%
Not all of Europe's LCCs have returned capacity as quickly as Ryanair, Pegasus and Wizz Air.

EasyJet Group, Europe's number two LCC, is at 61% of 2019 seat numbers, below the overall European average of 66%. It is projected to reach 82% by the end of 2021.

LCC subsidiaries: Transavia is at 94%, Vueling at 80% and Eurowings at 52%


I don't know if EasyJet's strategy of minimal offering is helping or not when all the competiton really grew. This is a time for cost control.

Lightsaber
 
User avatar
vhtje
Posts: 1334
Joined: Sat Jan 10, 2009 12:40 pm

Re: easyJet rejects takeover bid from Wizz

Fri Sep 10, 2021 1:00 pm

F27500 wrote:
I still can't get over that ridiculous, undignified, almost vulgar sounding name "Wizz Air" .. come on.


You've never heard the phrase "I'll just wizz over to <destination> to <objective>"? It's quite common in British English. In that sense, the name makes complete sense.

I think use of Wizz for urinating is an Americanism.
 
User avatar
william
Posts: 3527
Joined: Thu Jun 10, 1999 1:31 pm

Re: easyJet rejects takeover bid from Wizz

Fri Sep 10, 2021 1:24 pm

vhtje wrote:
F27500 wrote:
I still can't get over that ridiculous, undignified, almost vulgar sounding name "Wizz Air" .. come on.


You've never heard the phrase "I'll just wizz over to <destination> to <objective>"? It's quite common in British English. In that sense, the name makes complete sense.

I think use of Wizz for urinating is an Americanism.

And Americans do not say that anymore.
 
oschkosch
Posts: 687
Joined: Mon Oct 29, 2018 3:41 pm

Re: easyJet rejects takeover bid from Wizz

Fri Sep 10, 2021 1:33 pm

Well to be honest, many people in Europe do call Wizz Air a bit differently. Most common name is "P*ss Air", (obviously replace the * with an "i"...) simply because it is a horrible airline to fly with, but at the end of the day, you get what you pay for.
 
kxngb
Posts: 61
Joined: Fri Jan 01, 2021 1:22 am

Re: easyJet rejects takeover bid from Wizz

Fri Sep 10, 2021 2:10 pm

Easyjet have high fares and literally no service, they really are shooting themselves at their own feet. Lower your fares, you may get more customers and more money through the door.
 
holczakker
Posts: 213
Joined: Sun May 26, 2019 7:34 pm

Re: easyJet rejects takeover bid from Wizz

Fri Sep 10, 2021 4:05 pm

Galwayman wrote:
Short term operational issues at Wizz are nothing compared to the structural issues at EasyJet …

An airline being unable to crew 75 out of its 140 aircraft is not a short term operational issue but a very structrural one.
 
MCTSET
Posts: 244
Joined: Wed Jan 02, 2019 8:45 pm

Re: easyJet rejects takeover bid from Wizz

Fri Sep 10, 2021 4:09 pm

Why are easy cramping capacity when their rivals are expanding? Have they forgotten that their competition is with Ryanair and Wizz, not chasing Lufthansa and IAG business pax could help them.
 
davidjohnson6
Posts: 1571
Joined: Mon Jun 20, 2016 10:10 pm

Re: easyJet rejects takeover bid from Wizz

Fri Sep 10, 2021 6:02 pm

Are those flights with Wizz and Ryanair generally covering their direct costs (fuel, salaries, air nav charges, Govt taxes, airport charges, etc...), or are they mainly half empty with pax paying an average of 20 euros for a 2 hour flight ?
Easyjet's network is aimed more at connecting big cities instead of pure leisure and more biased towards the UK with its stricter rules on Covid tests before and after air travel. If Easyjet were to operate more flights, would they generally cover direct costs ?

One might argue that Easyjet needs to reshape its network in a post-pandemic era... but overall network strategy is a much bigger thing to change, than deciding whether to operate particular flights or not over the next 3 months
Last edited by davidjohnson6 on Fri Sep 10, 2021 6:24 pm, edited 2 times in total.
 
User avatar
readytotaxi
Posts: 8093
Joined: Mon Dec 11, 2006 2:09 am

Re: easyJet rejects takeover bid from Wizz

Fri Sep 10, 2021 6:10 pm

Wizz, that was a very cheeky offer.
 
runway23
Posts: 2415
Joined: Sat Jan 15, 2005 2:12 am

Re: easyJet rejects takeover bid from Wizz

Fri Sep 10, 2021 7:29 pm

Galwayman wrote:

It’s definitely about belief in the Management vision and effectiveness . Even the shareholders are not impressed by the EasyJet leadership and strategy. And clearly EasyJet cc staffing has become uncompetitive and inflexible - something Wizz can correct easily within the first six months


Cabin crew staffing is the least of priorities for investors in view of a merger.

Scheduling and irrops is the same. If you allocate no buffer in your schedule, have no back up aircraft and poorly planned spare parts then you'll essentially get back the lack of investment. With more investment the problems can easily and quickly be tackled.

easyJet management has a history of deploying their white flag anytime a new or more aggressive airline launches service from one of their bases. Recently (pre-covid) new hubs were basically launched in an effort to increase profitability by having crew based at lower cost destinations (FAO, PMI, AGP) that took over flights from existing bases. From a purely financial point of view it's not a bad idea, from a strategic long-term view easyJet gave up on alternative new bases that would actually grow their network.

Wizzair's network team has been doing pretty much the opposite - overly ambitious during covid, launching new bases, trying to find opportunities and being quick to drop unprofitable flying.

There's probably a fine balance between the two, but the fact remains that easyJet is very slow to adapt to changing market conditions and doesn't try many new things - probably because they try before all to defend their fortress bases (LGW, BER, MXP, GVA) and lose focus on the rest of their bases and strategic planning in the process.
 
User avatar
Revelation
Posts: 26692
Joined: Wed Feb 09, 2005 9:37 pm

Re: easyJet rejects takeover bid from Wizz

Fri Sep 10, 2021 11:57 pm

djpearman wrote:
dutchflyboi wrote:
A merger with Wizz would be very interesting. Although this bid was rejected, I see that mergers are coming in the post COVID 19 world.

I very much agree that there will be a string of mergers in the next few years. Both 9/11 and the financial crisis resulted in a slew of airline mergers and acquisitions as well as groups being formed (IAG, AF-KLM, LH Group, LATAM). It'll be interesting to see what happens. LH CEO Spohr was recently quoted as stating that Europe has too many airlines. In Europe in particular, this effectively results in each airline carving out a monopoly in their niche, hurting proper competition and making each less competitive globally.

Sorry, but if you think fewer competitors means more competition, I think you're going to be disappointed.
 
User avatar
Rajahdhani
Posts: 745
Joined: Wed Sep 28, 2016 3:13 pm

Re: easyJet rejects takeover bid from Wizz

Sat Sep 11, 2021 12:16 am

https://www.reuters.com/business/aerospace-defense/british-airline-easyjet-raise-17-bln-rejected-bid-offer-2021-09-09/
"EasyJet (EZJ.L) has rejected a takeover approach from Wizz Air that would have created a low-cost airline to rival Ryanair, opting instead to raise $1.7 billion from shareholders and go it alone in an industry battling to recover from the pandemic.
EasyJet said the all-share approach fundamentally undervalued its business, and added the potential bidder had since said it was no longer interested in a deal.
EasyJet said the fundraising, its second of the pandemic, would strengthen its balance sheet should the COVID-19 downturn continue and allow it to operate more aggressively once the recovery arrives. It has identified landing slots across Europe it could acquire, including in Paris, Amsterdam and Milan.
"I believe this is really a once in a lifetime opportunity," Lundgren said.
EasyJet, which during the pandemic sunk to its first ever annual loss and cut 4,500 jobs, wants to steal market share from legacy carriers like British Airways owner IAG and Air France-KLM as they retract their short-haul operations."


So, the choice is made to capture marketshare where they are strongest, against the Legacy carriers of the region.
 
LAXLHR
Posts: 486
Joined: Sat Dec 03, 2016 10:07 am

Re: easyJet rejects takeover bid from Wizz

Sat Sep 11, 2021 1:00 am

Wizz has one of the cleanest balance sheets in the business, along with mega backers.

This is not a surprise.

Mergers are NEVER EVER good for customers.
 
User avatar
aemoreira1981
Posts: 3915
Joined: Mon Jan 09, 2017 12:17 am

Re: easyJet rejects takeover bid from Wizz

Sat Sep 11, 2021 5:50 am

How many planes in the W6/W9/5W fleet are actually owned? (I ask because at F9 in the USA, which is similar to W6/W9/5W, only one aircraft is owned, while none of the Y4 fleet is owned.) NK similarly used to have a clean balance sheet because it was entirely leased a few years ago. Now its fleet is about 2/3 owned and financed and 1/3 leased.
 
VolvoBus
Posts: 247
Joined: Fri Sep 30, 2016 5:47 pm

Re: easyJet rejects takeover bid from Wizz

Sat Sep 11, 2021 8:13 am

I did a quick search last night on Wizzair Holdings plc. Yes - plc - it is a British registered company.

This is a double edged sword. An all share takeover of easyJet would save a lot of strain on the balance sheet,but cuts with the other edge. My search produced a report on shareholder dissatisfaction with Varadi's potential compensation package,caused by the small number of EU shareholders allowed to vote.The search showed only one of the top ten or twelve shareholders as obviously EU, and that was Varadi at ~2.8%.Incidentally, Indigo Partners was second largest at 7.8%.The non-EU shareholders were not allowed to vote to maintain EU control. As easyJet is primarily British owned,an all share takeover would magnify this problem ,which raises the question - Would British investors accept Wizzair stock with very little say in the running of the company ?
 
User avatar
dutchflyboi
Topic Author
Posts: 98
Joined: Sat Apr 26, 2008 5:56 pm

Re: easyJet rejects takeover bid from Wizz

Sat Sep 11, 2021 8:47 am

VolvoBus wrote:
I did a quick search last night on Wizzair Holdings plc. Yes - plc - it is a British registered company.

This is a double edged sword. An all share takeover of easyJet would save a lot of strain on the balance sheet,but cuts with the other edge. My search produced a report on shareholder dissatisfaction with Varadi's potential compensation package,caused by the small number of EU shareholders allowed to vote.The search showed only one of the top ten or twelve shareholders as obviously EU, and that was Varadi at ~2.8%.Incidentally, Indigo Partners was second largest at 7.8%.The non-EU shareholders were not allowed to vote to maintain EU control. As easyJet is primarily British owned,an all share takeover would magnify this problem ,which raises the question - Would British investors accept Wizzair stock with very little say in the running of the company ?


This is currently already in place at easyJet. In order for easyJet to continue flying Intra-Europe, this was set up:
You can read this on the corporate section of the easyJet website:
https://corporate.easyjet.com/investors ... -ownership

Non-EU nationals (including UK nationals) would continue to be able to buy easyJet shares, although shares acquired by them may be subject to a suspension of voting rights. Shares most recently acquired by non-EU nationals (including UK nationals) would have their voting rights suspended first as the suspension of voting rights is being applied on a "last in, first out" basis.
 
Galwayman
Posts: 1043
Joined: Fri Mar 10, 2017 10:20 am

Re: easyJet rejects takeover bid from Wizz

Sat Sep 11, 2021 10:27 am

LAXLHR wrote:
Wizz has one of the cleanest balance sheets in the business, along with mega backers.

This is not a surprise.

Mergers are NEVER EVER good for customers.


When it happens it will be a takeover not a merger

If it releases LGW slots to a lower fare airline like Wizz it's an instant win for the consumer
 
Kikko19
Posts: 727
Joined: Sat Apr 22, 2017 4:45 pm

Re: easyJet rejects takeover bid from Wizz

Sat Sep 11, 2021 11:25 am

Galwayman wrote:
LAXLHR wrote:
Wizz has one of the cleanest balance sheets in the business, along with mega backers.

This is not a surprise.

Mergers are NEVER EVER good for customers.


When it happens it will be a takeover not a merger

If it releases LGW slots to a lower fare airline like Wizz it's an instant win for the consumer


it's not, because the airlines if no competition on the same route will raise the prices. how much the slots cost is not relevant.
 
User avatar
eurotrader85
Posts: 273
Joined: Wed Oct 24, 2018 8:45 pm

Re: easyJet rejects takeover bid from Wizz

Sat Sep 11, 2021 11:50 am

Galwayman wrote:
LAXLHR wrote:
Wizz has one of the cleanest balance sheets in the business, along with mega backers.

This is not a surprise.

Mergers are NEVER EVER good for customers.


When it happens it will be a takeover not a merger

If it releases LGW slots to a lower fare airline like Wizz it's an instant win for the consumer


Not really if it means service and leg room decline, while supplementary costs and cancellations rise.
 
Galwayman
Posts: 1043
Joined: Fri Mar 10, 2017 10:20 am

Re: easyJet rejects takeover bid from Wizz

Sat Sep 11, 2021 5:24 pm

O’Leary had spoken . Looks like it’s only a matter of time for EasyJet and Wizz really

https://www.ft.com/content/3c1625ff-c47 ... LRIA%3D%3D
 
VolvoBus
Posts: 247
Joined: Fri Sep 30, 2016 5:47 pm

Re: easyJet rejects takeover bid from Wizz

Sat Sep 11, 2021 6:50 pm

dutchflyboi wrote:
VolvoBus wrote:
I did a quick search last night on Wizzair Holdings plc. Yes - plc - it is a British registered company.

This is a double edged sword. An all share takeover of easyJet would save a lot of strain on the balance sheet,but cuts with the other edge. My search produced a report on shareholder dissatisfaction with Varadi's potential compensation package,caused by the small number of EU shareholders allowed to vote.The search showed only one of the top ten or twelve shareholders as obviously EU, and that was Varadi at ~2.8%.Incidentally, Indigo Partners was second largest at 7.8%.The non-EU shareholders were not allowed to vote to maintain EU control. As easyJet is primarily British owned,an all share takeover would magnify this problem ,which raises the question - Would British investors accept Wizzair stock with very little say in the running of the company ?


This is currently already in place at easyJet. In order for easyJet to continue flying Intra-Europe, this was set up:
You can read this on the corporate section of the easyJet website:
https://corporate.easyjet.com/investors ... -ownership

Non-EU nationals (including UK nationals) would continue to be able to buy easyJet shares, although shares acquired by them may be subject to a suspension of voting rights. Shares most recently acquired by non-EU nationals (including UK nationals) would have their voting rights suspended first as the suspension of voting rights is being applied on a "last in, first out" basis.


Thanks for the clarification re voting rights. I did look a little bit closer at easyJet, mainly because Stelios would pull out his Cypriot passport and as probably the largest EU shareholder in a combined company, the entertainment value could quite high. One thing that struck me was the the LSE quotes one (mid)price for what are de facto voting OR non-voting shares. Any thoughts on how EasyGroup Holdings Ltd, a ~25% shareholder is treated ?
 
holczakker
Posts: 213
Joined: Sun May 26, 2019 7:34 pm

Re: easyJet rejects takeover bid from Wizz

Sat Sep 11, 2021 8:10 pm

aemoreira1981 wrote:
How many planes in the W6/W9/5W fleet are actually owned?

None.
 
djpearman
Posts: 42
Joined: Thu Feb 06, 2020 9:02 pm

Re: easyJet rejects takeover bid from Wizz

Sat Sep 11, 2021 8:36 pm

Revelation wrote:
djpearman wrote:
dutchflyboi wrote:
A merger with Wizz would be very interesting. Although this bid was rejected, I see that mergers are coming in the post COVID 19 world.

I very much agree that there will be a string of mergers in the next few years. Both 9/11 and the financial crisis resulted in a slew of airline mergers and acquisitions as well as groups being formed (IAG, AF-KLM, LH Group, LATAM). It'll be interesting to see what happens. LH CEO Spohr was recently quoted as stating that Europe has too many airlines. In Europe in particular, this effectively results in each airline carving out a monopoly in their niche, hurting proper competition and making each less competitive globally.

Sorry, but if you think fewer competitors means more competition, I think you're going to be disappointed.


I don't think that - I'm not sure where what I said led you to get that impression. What I'm trying to say is that the dominance of airline groups in their respective regions (Lufthansa in Austria, Belgium, Germany and Switzerland, IAG in Ireland, Spain and UK, AF-KLM in France and the Netherlands), despite giving the impression of a large amount of choice due to branding, does not constitute real competition whilst simultaneously, each group is not operating as a unified entity either. So, the end result is a combination of the drawbacks of a lack of competition coupled with the lack of scaling that could be achieved with larger coordinated operations. This hurts their ability to compete effectively on a global stage.

Imagine the clout of a well structured network airline operating throughout Europe (all of it) utilising the available resources fully - I know, wishful thinking what with so many different nations and associated identities and languages. However, LCCs with operations in multiple countries are already the largest European airlines in terms of RPK (Ryanair) and PAX (Ryanair, Easyjet), so at some point, someone is likely to have a stab at it. The COVID pandemic may just turn out to be a catalyst for this.
 
User avatar
Revelation
Posts: 26692
Joined: Wed Feb 09, 2005 9:37 pm

Re: easyJet rejects takeover bid from Wizz

Sat Sep 11, 2021 11:12 pm

djpearman wrote:
Revelation wrote:
djpearman wrote:
LH CEO Spohr was recently quoted as stating that Europe has too many airlines. In Europe in particular, this effectively results in each airline carving out a monopoly in their niche, hurting proper competition and making each less competitive globally.

Sorry, but if you think fewer competitors means more competition, I think you're going to be disappointed.

I don't think that - I'm not sure where what I said led you to get that impression. What I'm trying to say is that the dominance of airline groups in their respective regions (Lufthansa in Austria, Belgium, Germany and Switzerland, IAG in Ireland, Spain and UK, AF-KLM in France and the Netherlands), despite giving the impression of a large amount of choice due to branding, does not constitute real competition whilst simultaneously, each group is not operating as a unified entity either. So, the end result is a combination of the drawbacks of a lack of competition coupled with the lack of scaling that could be achieved with larger coordinated operations. This hurts their ability to compete effectively on a global stage.

Imagine the clout of a well structured network airline operating throughout Europe (all of it) utilising the available resources fully - I know, wishful thinking what with so many different nations and associated identities and languages. However, LCCs with operations in multiple countries are already the largest European airlines in terms of RPK (Ryanair) and PAX (Ryanair, Easyjet), so at some point, someone is likely to have a stab at it. The COVID pandemic may just turn out to be a catalyst for this.

Sorry, I still don't see how the creation of a network Goliath of Europe would create "proper competition", it would create the opposite, IMO.
 
User avatar
eurotrader85
Posts: 273
Joined: Wed Oct 24, 2018 8:45 pm

Re: easyJet rejects takeover bid from Wizz

Sun Sep 12, 2021 9:16 am

Revelation wrote:
djpearman wrote:
Revelation wrote:
Sorry, but if you think fewer competitors means more competition, I think you're going to be disappointed.

I don't think that - I'm not sure where what I said led you to get that impression. What I'm trying to say is that the dominance of airline groups in their respective regions (Lufthansa in Austria, Belgium, Germany and Switzerland, IAG in Ireland, Spain and UK, AF-KLM in France and the Netherlands), despite giving the impression of a large amount of choice due to branding, does not constitute real competition whilst simultaneously, each group is not operating as a unified entity either. So, the end result is a combination of the drawbacks of a lack of competition coupled with the lack of scaling that could be achieved with larger coordinated operations. This hurts their ability to compete effectively on a global stage.

Imagine the clout of a well structured network airline operating throughout Europe (all of it) utilising the available resources fully - I know, wishful thinking what with so many different nations and associated identities and languages. However, LCCs with operations in multiple countries are already the largest European airlines in terms of RPK (Ryanair) and PAX (Ryanair, Easyjet), so at some point, someone is likely to have a stab at it. The COVID pandemic may just turn out to be a catalyst for this.

Sorry, I still don't see how the creation of a network Goliath of Europe would create "proper competition", it would create the opposite, IMO.


Agreed. When Carsten Spohr complains there are too many airlines, he is just annoyed there are too many nipping at the business of LH group. Whether that be larger groups such as TK where they have slashed reciprocal FF awards, FR building at their home base of FRA which caused a heated storm between LH and Fraport for the audacity to allow such a move, lobbying the government to limit German access rights to ME3 or any other small group taking Pax from the group.

The idea that customers flying from LGW to ATH, BUD, AGP or LTN to MXP etc are suddenly going to benefit from lower fairs and better service from an airline group with terrible service and suddenly has less competition on routes is frankly fanciful.
 
djpearman
Posts: 42
Joined: Thu Feb 06, 2020 9:02 pm

Re: easyJet rejects takeover bid from Wizz

Sun Sep 12, 2021 9:41 am

Revelation wrote:
djpearman wrote:
Revelation wrote:
Sorry, but if you think fewer competitors means more competition, I think you're going to be disappointed.

I don't think that - I'm not sure where what I said led you to get that impression. What I'm trying to say is that the dominance of airline groups in their respective regions (Lufthansa in Austria, Belgium, Germany and Switzerland, IAG in Ireland, Spain and UK, AF-KLM in France and the Netherlands), despite giving the impression of a large amount of choice due to branding, does not constitute real competition whilst simultaneously, each group is not operating as a unified entity either. So, the end result is a combination of the drawbacks of a lack of competition coupled with the lack of scaling that could be achieved with larger coordinated operations. This hurts their ability to compete effectively on a global stage.

Imagine the clout of a well structured network airline operating throughout Europe (all of it) utilising the available resources fully - I know, wishful thinking what with so many different nations and associated identities and languages. However, LCCs with operations in multiple countries are already the largest European airlines in terms of RPK (Ryanair) and PAX (Ryanair, Easyjet), so at some point, someone is likely to have a stab at it. The COVID pandemic may just turn out to be a catalyst for this.

Sorry, I still don't see how the creation of a network Goliath of Europe would create "proper competition", it would create the opposite, IMO.


It would compete with existing airlines in the respective markets that these dominate.
 
davidjohnson6
Posts: 1571
Joined: Mon Jun 20, 2016 10:10 pm

Re: easyJet rejects takeover bid from Wizz

Sun Sep 12, 2021 9:53 am

When you have a very small number of large companies in a market, you find that other smaller competitors leave that market or decide not to get involved, because they suspect the larger players may engage in abusive practices, eg price dumping. Compare, for example, prices between Frankfurt to Vienna (2 LH controlled hubs) and between Paris to Vienna. In the absence of real competition, prices quickly go high - there is little reason for Austrian Airlines to charge triple the airfare on widespread dates for a significantly shorter flight

Competition regulators in most countries are usually limited in resources and can investigate only the most serious cases of competition abuse. Govt regulators much prefer the existence of multiple companies competing against each other to ensure against widespread abuse.

It is fanciful to believe that Easyjet and Wizzair could merge without fares rising. If companies can charge their customers higher prices and thus achieve higher profits they will. Investors like companies that achieve fat profits and are always greedy for more. Strong competition between companies is what keeps companies honest and prices low
Last edited by davidjohnson6 on Sun Sep 12, 2021 10:02 am, edited 1 time in total.
 
djpearman
Posts: 42
Joined: Thu Feb 06, 2020 9:02 pm

Re: easyJet rejects takeover bid from Wizz

Sun Sep 12, 2021 10:02 am

eurotrader85 wrote:
Revelation wrote:
djpearman wrote:
I don't think that - I'm not sure where what I said led you to get that impression. What I'm trying to say is that the dominance of airline groups in their respective regions (Lufthansa in Austria, Belgium, Germany and Switzerland, IAG in Ireland, Spain and UK, AF-KLM in France and the Netherlands), despite giving the impression of a large amount of choice due to branding, does not constitute real competition whilst simultaneously, each group is not operating as a unified entity either. So, the end result is a combination of the drawbacks of a lack of competition coupled with the lack of scaling that could be achieved with larger coordinated operations. This hurts their ability to compete effectively on a global stage.

Imagine the clout of a well structured network airline operating throughout Europe (all of it) utilising the available resources fully - I know, wishful thinking what with so many different nations and associated identities and languages. However, LCCs with operations in multiple countries are already the largest European airlines in terms of RPK (Ryanair) and PAX (Ryanair, Easyjet), so at some point, someone is likely to have a stab at it. The COVID pandemic may just turn out to be a catalyst for this.

Sorry, I still don't see how the creation of a network Goliath of Europe would create "proper competition", it would create the opposite, IMO.


Agreed. When Carsten Spohr complains there are too many airlines, he is just annoyed there are too many nipping at the business of LH group. Whether that be larger groups such as TK where they have slashed reciprocal FF awards, FR building at their home base of FRA which caused a heated storm between LH and Fraport for the audacity to allow such a move, lobbying the government to limit German access rights to ME3 or any other small group taking Pax from the group.

The idea that customers flying from LGW to ATH, BUD, AGP or LTN to MXP etc are suddenly going to benefit from lower fairs and better service from an airline group with terrible service and suddenly has less competition on routes is frankly fanciful.


That's what I've been attempting to bring across - there is currently a lack of real competition, in many if not all, European countries because the incumbent 'national flag carriers' (ab)use their status, as you point out. IMO, what's needed is at least one if not more network airlines to go up against the established airline groups (AF-KLM, IAG, LH, SAS, etc), so as to create competition. LCCs such as Easyjet, Ryanair or Wizzair, provide this to a certain extent, but their focus is generally on secondary routes.
 
Galwayman
Posts: 1043
Joined: Fri Mar 10, 2017 10:20 am

Re: easyJet rejects takeover bid from Wizz

Sun Sep 12, 2021 10:08 am

davidjohnson6 wrote:
When you have a very small number of large companies in a market, you find that other smaller competitors leave that market or decide not to get involved, because they suspect the larger players may engage in abusive practices, eg price dumping. Compare, for example, prices between Frankfurt to Vienna (2 LH controlled hubs) and between Paris to Vienna. In the absence of real competition, prices quickly go high - there is little reason for Austrian Airlines to charge triple the airfare on widespread dates for a significantly shorter flight

Competition regulators in most countries are usually limited in resources and can investigate only the most serious cases of competition abuse. Govt regulators much prefer the existence of multiple companies competing against each other to ensure against widespread abuse.

It is fanciful to believe that Easyjet and Wizzair could merge without fares rising. If companies can charge their customers higher prices and thus achieve higher profits they will. Investors like companies that achieve fat profits and are always greedy for more. Strong competition between companies is what keeps companies honest and prices low


The problem with competition at LGW is high cost EasyJet holding onto slots and blocking new entrants . If high cost anti competitive EasyJet is taken out by low cost Wizz, airfares will fall one way or another . It’s a takeover proposition with lots of potential benefits for the consumer .
 
davidjohnson6
Posts: 1571
Joined: Mon Jun 20, 2016 10:10 pm

Re: easyJet rejects takeover bid from Wizz

Sun Sep 12, 2021 10:08 am

The major network airlines have businesses that rely on the network effect - namely large numbers of people transferring between flights at their hubs. They have tried to open separate standalone routes (eg Air France flying London - Los Angeles non stop) or British Airways owning a shorthaul subsidiary in Germany, but these have consistently lost money.

If you want competition on the major routes in Europe, it's going to be the likes of Easyjet, Ryanair, Wizzair, Norwegian and other LCCs. If these merge, competition will disappear quickly

To the claim that Easyjet is being anti-competitive by blocking new entrants at Gatwick.... a combined EasyWizz would (despite fluffy words) do exactly the same at Gatwick AND Luton
 
Delta777Jet
Posts: 1478
Joined: Tue Jun 13, 2000 6:19 am

Re: easyJet rejects takeover bid from Wizz

Mon Sep 20, 2021 1:59 am

The problem at easyJet is the current management. They have no clue whatsoever and bringing easyJet down. The Ryanair guy is like a Trojan horse , I think he will weaken easyJet so much that easyJet indeed becomes a takeover candidate. The same happened to Air Berlin when the Lufthansa Trojan horse arrived , the Airline was done.

There is no reason why easyjet is not flying more of their planes to more Destinations , the planes are all 90%+ booked but the with a very weak schedule.

Also their inflight service on easyJet Europe flight is lacking of most items ( no juices , hardly any snacks available ) - easyjet is shooting it’s own leg - low inflight sales is hurting revenue and that’s all because of poor management .

easyJet needs a new management to survive , otherwise their future is looking really bad !
 
davidjohnson6
Posts: 1571
Joined: Mon Jun 20, 2016 10:10 pm

Re: easyJet rejects takeover bid from Wizz

Mon Sep 20, 2021 5:52 am

Delta777Jet wrote:
There is no reason why easyjet is not flying more of their planes to more Destinations , the planes are all 90%+ booked but the with a very weak schedule.


I flew yesterday from London Gatwick to Verona - Sunday morning and paid the equivalent of 45 euros one way, booking 6 days in advance. The aircraft was an A320 with at least 180 seats but I counted 38 pax on board. Granted there are some no-shows, but based on this and other flights during the summer, I am not sure load factor really is 90%+. I accept Ryanair has a high load factor, but some of their flights are likely sold at below-cost fares
 
FluidFlow
Posts: 1112
Joined: Wed Apr 10, 2019 6:39 am

Re: easyJet rejects takeover bid from Wizz

Mon Sep 20, 2021 6:12 am

davidjohnson6 wrote:
Delta777Jet wrote:
There is no reason why easyjet is not flying more of their planes to more Destinations , the planes are all 90%+ booked but the with a very weak schedule.


I flew yesterday from London Gatwick to Verona - Sunday morning and paid the equivalent of 45 euros one way, booking 6 days in advance. The aircraft was an A320 with at least 180 seats but I counted 38 pax on board. Granted there are some no-shows, but based on this and other flights during the summer, I am not sure load factor really is 90%+. I accept Ryanair has a high load factor, but some of their flights are likely sold at below-cost fares


I wonder what the difference is between intra-EU flights and non EU(GB) flights for Ryanair/Easyjet. At the moment the travel requirements for entering the EU from the UK are very confusing, every member state has different rules and regulations.
 
BealineV953
Posts: 312
Joined: Fri Jul 26, 2019 10:00 am

Re: easyJet rejects takeover bid from Wizz

Tue Sep 21, 2021 11:14 am

In this week’ Sunday Times (19th September) there is a long piece about Luis Gallego, the Chief Executive of IAG.
Asked about talk in the aviation industry of IAG buying or merging with easyJet, Gallego says that easyJet is one of several businesses “on the radar” at IAG, but this did not mean a bid was imminent.
Asked if he had discussed a merger with executives at easyJet, he said "We talk to all airlines that can be interesting to us."
He also said “…in the past we analysed Norwegian and decided not to bid and we analysed Air Europa and are now buying it”.
 
User avatar
william
Posts: 3527
Joined: Thu Jun 10, 1999 1:31 pm

Re: easyJet rejects takeover bid from Wizz

Tue Sep 21, 2021 5:44 pm

EasyJet to Ryanair boss: focus on your own airline

https://www.yahoo.com/finance/news/easy ... 24793.html

"(It is) complete nonsense," easyJet CEO Johan Lundgren told Reuters in an interview. "I would urge anyone who runs an airline to focus on their own business rather than speculate about others, (where) they have no idea about what's going on."

You knew this was coming.

Popular Searches On Airliners.net

Top Photos of Last:   24 Hours  •  48 Hours  •  7 Days  •  30 Days  •  180 Days  •  365 Days  •  All Time

Military Aircraft Every type from fighters to helicopters from air forces around the globe

Classic Airliners Props and jets from the good old days

Flight Decks Views from inside the cockpit

Aircraft Cabins Passenger cabin shots showing seat arrangements as well as cargo aircraft interior

Cargo Aircraft Pictures of great freighter aircraft

Government Aircraft Aircraft flying government officials

Helicopters Our large helicopter section. Both military and civil versions

Blimps / Airships Everything from the Goodyear blimp to the Zeppelin

Night Photos Beautiful shots taken while the sun is below the horizon

Accidents Accident, incident and crash related photos

Air to Air Photos taken by airborne photographers of airborne aircraft

Special Paint Schemes Aircraft painted in beautiful and original liveries

Airport Overviews Airport overviews from the air or ground

Tails and Winglets Tail and Winglet closeups with beautiful airline logos