busewils
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IAG Really Wants Aer Lingus

Thu Jan 15, 2015 6:55 pm

BA's and IB's parent IAG is planning to make a higher bid for the takeover of Aer Lingus. Ryanair and the Irish government want to sell their shares. It looks like this would bring them back as a oneworld-member. Opinions?

Article:
http://www.bloomberg.com/news/2015-0...lan-higher-bid-for-aer-lingus.html

Article (in Dutch):
http://www.flightlevel.be/42028/iag-...lingus/comment-page-1#comment-5703
 
rj777
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RE: IAG Really Wants Aer Lingus

Thu Jan 15, 2015 6:57 pm

Hey.... if they can make Aer Lingus profitable, more power to em.
 
jfk777
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RE: IAG Really Wants Aer Lingus

Thu Jan 15, 2015 7:11 pm

Dublin will be a reliever hub for IAG and BA. British Airways has the feed that can allow the Dublin hub to expand to a level Aer Lingus can not achieve itself. BA can expand the schedule beyond the east coast concentration AER Lingus has long operated. Miami, DFW and LAX are just 3 cities for expansion from Ireland.
 
tortugamon
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RE: IAG Really Wants Aer Lingus

Thu Jan 15, 2015 7:12 pm

Of course they want them. Right now they are bidding essentially their asset value plus the LHR rights and nothing else! Zero risk so far. And there is certainly upside with reducing the LHR/DUB redundancies and funneling traffic to BA at times when it makes sense to the make the hub more profitable. Price will need to go higher as their is no float to the stock being so tightly controlled.

tortugamon
 
shamrock321
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RE: IAG Really Wants Aer Lingus

Thu Jan 15, 2015 7:23 pm

Quoting rj777 (Reply 1):
Quoting rj777 (Reply 1):

Aer Lingus are profitable!
 
MIflyer12
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RE: IAG Really Wants Aer Lingus

Thu Jan 15, 2015 7:35 pm

Quoting jfk777 (Reply 2):
Dublin will be a reliever hub for IAG and BA.

That's a concept with repeated failures. Ask the people of STL (ORD/DFW), MEM (ATL), or CLE (ORD/EWR). Passengers who are indifferent to where they connect and who are already served by multiple hubs will search hard by price - and generally won't be worth chasing, at least by carriers with capacity discipline.
 
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OA260
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RE: IAG Really Wants Aer Lingus

Thu Jan 15, 2015 7:37 pm

Quoting busewils (Thread starter):
It looks like this would bring them back as a oneworld-member.

Yes they really want them and to be honest as discussed on the Irish threads I believe it will be a good thing for all concerned. Lets hope it happens sooner rather than later.
 
Bongodog1964
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RE: IAG Really Wants Aer Lingus

Thu Jan 15, 2015 9:42 pm

Quoting rj777 (Reply 1):
Hey.... if they can make Aer Lingus profitable, more power to em.

I'm sure it is profitable, if it isn't IAG have just the person who will make it so, he's already done it once.

Quoting MIflyer12 (Reply 5):
Quoting jfk777 (Reply 2):
Dublin will be a reliever hub for IAG and BA.

That's a concept with repeated failures. Ask the people of STL (ORD/DFW), MEM (ATL), or CLE (ORD/EWR). Passengers who are indifferent to where they connect and who are already served by multiple hubs will search hard by price - and generally won't be worth chasing, at least by carriers with capacity discipline.

The difference is that Dublin is ideally placed for transfer passengers on Transatlantic routes, its geographical position minimises backtracking.
 
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TedToToe
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RE: IAG Really Wants Aer Lingus

Thu Jan 15, 2015 9:57 pm

Quoting jfk777 (Reply 2):

Dublin will be a reliever hub for IAG and BA. British Airways has the feed that can allow the Dublin hub to expand to a level Aer Lingus can not achieve itself.

Secondary cities in Europe (which BA cannot serve from LHR due to slot availability) linking primary cities/OneWorld hubs in the US. Plus rationalise LHR - DUB/BHD services to free up slots. WW knows what he is doing, I think.
 
Wingtips56
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RE: IAG Really Wants Aer Lingus

Thu Jan 15, 2015 10:04 pm

DUB can offer preclearance for the U.S.-bound flights, which would be attractive. If EI were to rejoin Oneworld as a result, then they could capture some flow from AA and BA frequent flyers who would be able to connect over Ireland and skip the crawl through Heathrow.

As to the LHR routes, BA and EI would be able to consolidate what are currently competing schedules, which could free up some LHR slots for other destinations, without really bleeding EI. Fewer flights on larger aircraft could keep the capacity up.
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Egerton
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RE: IAG Really Wants Aer Lingus

Thu Jan 15, 2015 10:04 pm

The 1st bid of £2.30 was kept secret for a month or two until leaked on 18th December 2015. The 2nd bid of £2.40 was leaked on 29th December. If the media reports today suggesting a 3rd bid prove correct, that is the third leak. It would be very surprising if the source of the leaks is IAG, as the London Stock Exchange regulatory authorities take a dim view of disorderly markets involving share traded in London.

Aer Lingus is doing very well just now, indeed a purple patch for them. But there are negatives:

1. IAG can do without Aer Lingus.
2. The excellent Aeg Lingus CEO is leaving to try to perform the same magic at Malaysian.
3. Ryanair seem to be obliged by the EU competition authorities to sell their shares soonish?
4. The Aer Lingus fleet will all need replacing with new tech stuff, can the existing shareholders fund this capex?
5. No other bidder has shown his hand, and you might think they would have by now?
6. When the boom-bust pendulum swings back (it always does), Aer Lingus may be cheaper and beeter value for IAG?

So if the current media speculation turns out to have been yet another leak, then IAG may wish to insist that their 3rd bid receives a strong recommendation for acceptance from the Aer Lingus Board of Directors, else IAG may walk away from folk who cannot button their lips.
 
bennett123
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RE: IAG Really Wants Aer Lingus

Thu Jan 15, 2015 10:18 pm

I assume you mean 18 December 2014.
 
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winterlight
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RE: IAG Really Wants Aer Lingus

Thu Jan 15, 2015 10:29 pm

Quoting Egerton (Reply 10):
£2.30

I could buy them at that price!
Question everything. Trust no-one.
 
steve6666
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RE: IAG Really Wants Aer Lingus

Thu Jan 15, 2015 10:42 pm

Quoting Egerton (Reply 10):
The 1st bid of £2.30 was kept secret for a month or two until leaked on 18th December 2015. The 2nd bid of £2.40 was leaked on 29th December. If the media reports today suggesting a 3rd bid prove correct, that is the third leak. It would be very surprising if the source of the leaks is IAG, as the London Stock Exchange regulatory authorities take a dim view of disorderly markets involving share traded in London.

It is still up to Aer Lingus ultimately to ask the Takeover Panel to require IAG to Put Up or Shut Up, after which IAG will have 28 days to issue a formal Offer Document, or announce that it has no further intention to make an offer.
If the deal then goes friendly, ie, recommended by the Board of Aer Lingus, then it gets a lot easier.
But my take is it needs the Aer Lingus Chairman to agree a price with WW and this will get sorted pdq. The synergy value to IAG is quite high and I suspect there is a lot of room to play with price.
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Wingtips56
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RE: IAG Really Wants Aer Lingus

Thu Jan 15, 2015 10:51 pm

How big a factor is the FR stake in EI? If they hold out, are there enough votes/leverage for IAG to prevail anyway?
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steve6666
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RE: IAG Really Wants Aer Lingus

Thu Jan 15, 2015 10:56 pm

Well. you can bet that getting FR onside will be a big plus in any eventual offer, but FR owns less than 30% of the share capital (at that level they are required to make an offer for the remainder) - so with 70.1% IAG would be in control. The government shares are more important - if there are any golden shares that could allow the Irish government to block IAG decisions.
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commavia
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RE: IAG Really Wants Aer Lingus

Fri Jan 16, 2015 12:25 am

Quoting MIflyer12 (Reply 5):
That's a concept with repeated failures. Ask the people of STL (ORD/DFW), MEM (ATL), or CLE (ORD/EWR).

I don't think the situations are really comparable - the dynamics between DUB and LHR are, in my view, quite different than those between STL and ORD, MEM and ATL, PIT and PHL, etc.

Fundamentally, I actually don't even think the characterization of DUB's role in any hypothetical merged IAG context as a "reliever" to LHR is even accurate, as there seem - at least to me - to be roles that DUB can fill as a hub that LHR genuinely cannot, at least not without more runways. That is not really true with the I-agree-failed "reliever hub" concept in the U.S. context, where most such "reliever hubs" really served no true network purpose that larger nearby hubs couldn't themselves fill.

Quoting Wingtips56 (Reply 9):
DUB can offer preclearance for the U.S.-bound flights, which would be attractive. If EI were to rejoin Oneworld as a result, then they could capture some flow from AA and BA frequent flyers who would be able to connect over Ireland and skip the crawl through Heathrow.

  

As discussed at length in several previous threads, the attractiveness of Aer Lingus in general and DUB as a hub specifically to IAG seem self-evident.

Quoting steve6666 (Reply 13):
But my take is it needs the Aer Lingus Chairman to agree a price with WW and this will get sorted pdq. The synergy value to IAG is quite high and I suspect there is a lot of room to play with price.

I generally agree - it seems like there is upside here for both sides.
 
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OzarkD9S
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RE: IAG Really Wants Aer Lingus

Fri Jan 16, 2015 2:10 am

Quoting MIflyer12 (Reply 5):


That's a concept with repeated failures. Ask the people of STL (ORD/DFW), MEM (ATL), or CLE (ORD/EWR).

Ah, but LHR is slot controlled, virtually out of slots of any worth, DUB ideally located to serve the UK Regions to North America, and lest you forget....LGW is already a reliever hub for LHR for BA. A pretty dramatic paradigm shift is in the cards for LHR/LGW and DUB should the acquisition go through. BA can't wait 30 years for something to be done at LHR (or LGW, for that matter).
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bluesky73
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RE: IAG Really Wants Aer Lingus

Fri Jan 16, 2015 6:04 am

IAG purchase of EI makes perfect sense and sure it will eventually happen.

Once A359s arrive the A330s could be reconfigured for domestic use for EI/BA.
 
blueflyer
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RE: IAG Really Wants Aer Lingus

Fri Jan 16, 2015 8:29 am

Quoting Egerton (Reply 10):
When the boom-bust pendulum swings back (it always does), Aer Lingus may be cheaper and beeter value for IAG?

How does IAG intend to pay for their acquisition? If they're going to markets, Aer Lingus may be cheaper in the next downturn, but money may not be.
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AirbusA6
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RE: IAG Really Wants Aer Lingus

Fri Jan 16, 2015 9:39 am

How convenient is DUB for connecting passengers? Would people from the UK regions potentially prefer connecting there to, say AMS?
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S75752
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RE: IAG Really Wants Aer Lingus

Fri Jan 16, 2015 9:45 am

I do wonder, if this goes through, how might this effect their interesting relationship with UA, and routes to non-oneworld hubs like SFO?
 
EIDL
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RE: IAG Really Wants Aer Lingus

Fri Jan 16, 2015 9:59 am

Quoting AirbusA6 (Reply 20):

How convenient is DUB for connecting passengers?

Not hugely, but the convenience of landing in the US as a domestic passenger means that (when accomodated properly by the airport at the other end) you've got standard US domestic connections - just walk/bus to the other gate. Or just walk out if its your final destination.

[Edited 2015-01-16 01:59:52]
 
bennett123
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RE: IAG Really Wants Aer Lingus

Fri Jan 16, 2015 10:12 am

If you are flying to the US, going West via DUB rather than dog leg via AMS makes a lot of sense.
 
Max Q
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RE: IAG Really Wants Aer Lingus

Fri Jan 16, 2015 10:13 am

Another smart move by W.Walsh who is coming full circle back to buy Aer Lingus where he started as a Pilot.
The best contribution to safety is a competent Pilot.


GGg
 
jfk777
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RE: IAG Really Wants Aer Lingus

Fri Jan 16, 2015 12:56 pm

Quoting MIflyer12 (Reply 5):
That's a concept with repeated failures. Ask the people of STL (ORD/DFW), MEM (ATL), or CLE (ORD/EWR). Passengers who are indifferent to where they connect and who are already served by multiple hubs will search hard by price - and generally won't be worth chasing, at least by carriers with capacity discipline.

LHR is clogged no more slots and a new runway is years away if ever. Airlines have paid fifty million dollars for high demand slot times. All the comparisons you have are domestic, the airlines of the world are not flying to Memphis or St. Louis. Any airline wanting to fly to the cities you mention can and would be welcome with open arms.
 
a380787
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RE: IAG Really Wants Aer Lingus

Fri Jan 16, 2015 1:04 pm

Quoting S75752 (Reply 21):

Very weakened, and most likely pressured by LH to have them canned. They would be reduced yet another air Berlin type of network.
 
Kiwirob
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RE: IAG Really Wants Aer Lingus

Fri Jan 16, 2015 1:14 pm

Quoting bluesky73 (Reply 18):
Once A359s arrive the A330s could be reconfigured for domestic use for EI/BA.

Really widebodies on UK domestic flights, don't think that is going to happen anytime soon.
 
mwhcvt
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RE: IAG Really Wants Aer Lingus

Fri Jan 16, 2015 1:17 pm

Quoting KiwiRob (Reply 27):

I wouldn't be so sure 767 did get used on regular domestic service on a scheduled basis on LHR-Scotland I seem to remember it was one of the evening flights and that was as I remember either last year or 2013
Must think up a new one soon, slow moving brain trying to get into gear ;)
 
vv701
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RE: IAG Really Wants Aer Lingus

Fri Jan 16, 2015 1:32 pm

Quoting Wingtips56 (Reply 14):
How big a factor is the FR stake in EI?

29.8 per cent or approximately 159 million of the 534.04 million outstanding EI shares.

Quoting Wingtips56 (Reply 14):
If they hold out, are there enough votes/leverage for IAG to prevail anyway?

The average price FR paid for its EI shares has been reported as €2.40. If FR were to block an IAG bid then the EI share price, currently €2.43 but around €1.50 before the IAG opening bid, could fall back to somewhere near where it started. If FR block the bid then to meet EC requirements they would need to sell most of their shares in the market perhaps at around €1.50 or a little lower. At €1.50 the FR loss would be about €0.90 a share or a total of approximately €143 million. On the other hand if they were to accept an offer of €2.50 they would walk away with a small profit of almost €16 million.

I believe that FR's reluctance to comply with the EC's requirements is because of the loss they would have had to take after their bid was blocked and, as a result, the EI share price fell back. The IAG bid has changed everything. An accepted IAG bid above €2.40 would leave FR with a profit not the significant loss they can otherwise expect.
 
r2rho
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RE: IAG Really Wants Aer Lingus

Fri Jan 16, 2015 1:36 pm

I can see the logic of this for BA (LHR slots + reliever hub + elimination of a competitor), but I have strong doubts about its benefit for consumers, and of its approval by the competition authorities. It would leave FR and U2 as the only ones to guarantee competition for EU routes, and a backtrack to CDG or AMS for competition on TATL routes.

UK & Ireland deserve IMO a special consideration in terms of competition rules because they are, well, islands, and air travel is their only viable connection to the outer world (except London with Eurostar). And competition on that lifeline should be protected.
 
gzbja
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RE: IAG Really Wants Aer Lingus

Fri Jan 16, 2015 1:37 pm



Quoting KiwiRob (Reply 27):

Already happens on the EDI route. (767)

[Edited 2015-01-16 05:39:28]

[Edited 2015-01-16 05:40:44]
 
edina
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RE: IAG Really Wants Aer Lingus

Fri Jan 16, 2015 2:10 pm

Quoting GZBJA (Reply 31):

And GLA..........

Currently the BA1492 LHR-GLA 1800 peak evening service, and BA1497 return. EDI has a 767 nightstopping to operate the first LHR shuttle in the morning at 0705 and another late morning.

[Edited 2015-01-16 06:30:10]
Worked on - Caravelle Mercure A300 A320 F27 SD3-60 BAe146 747-100/200/400 DC10-30 767 777 737-400 757 A319 A321
 
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par13del
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RE: IAG Really Wants Aer Lingus

Fri Jan 16, 2015 2:21 pm

Quoting VV701 (Reply 29):
I believe that FR's reluctance to comply with the EC's requirements

I must admit, I still find this all "suspicious", the EU does not find that their holdings is a "threat" but the UK competition commission does. I suspect courts would have to rule who is the ultimate authority.

http://www.stibbe.com/en/news/2013/s...on-law-newsletter---september-2013
 
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vhtje
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RE: IAG Really Wants Aer Lingus

Fri Jan 16, 2015 2:57 pm

Quoting jfk777 (Reply 2):
Dublin will be a reliever hub for IAG and BA

But why go to all the trouble and risk of buying EI for that?

Why not have BA use BHX and/or MAN as a reliever hub to LHR? Wouldn't that be cheaper, easier, and pose less of a risk for IAG than buying EI?

Presumably, the prize for IAG is EI's LHR slots. But competition authorities will presumably heavily shackle IAG's ability to move them from EI to BA's wider network by insisting the slots be used for flights to Ireland?
I only turn left when boarding aircraft. Well, mostly. All right, sometimes. OH OKAY - rarely.
 
bluesky73
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RE: IAG Really Wants Aer Lingus

Fri Jan 16, 2015 3:09 pm

Quoting BA.+%0D%0A%0D%0AReally+widebodies+on+UK+domestic+flights%2C+don%27t+think+that+is+going+to+happen+anytime+soon.%0D%0A" class="quote" target="_blank">KiwiRob,reply=27Quoting bluesky73 (Reply 18):
Once A359s arrive the A330s could be reconfigured for domestic use for EI/BA.

Really widebodies on UK domestic flights, don't think that is going to happen anytime soon.
:

There are 7 763s that frequently fly the domestic shuttles and European flights.

All 7 aircraft below are configured to CY259 and will be last 767s to leave BA fleet.

G-BNWA
G-BNWB
G-BNWX
G-BNWZ
G-BZHA
G-BZHB
G-BZHC

If you look at G-BNWA for example on TheBASource website below there are numerous domestic fights from London to Glasgow and Edinburgh.
http://www.thebasource.com/jettracker.html
 
nu
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RE: IAG Really Wants Aer Lingus

Fri Jan 16, 2015 3:19 pm

Quoting Egerton (Reply 10):
The 1st bid of £2.30 was kept secret for a month or two until leaked on 18th December 2015. The 2nd bid of £2.40 was leaked on 29th December. If the media reports today suggesting a 3rd bid prove correct, that is the third leak. It would be very surprising if the source of the leaks is IAG, as the London Stock Exchange regulatory authorities take a dim view of disorderly markets involving share traded in London.

Absolutely, how could the source be IAG as they are quoted on the exchange that takes "dim views" of leaks? Lucky that Aer Lingus is quoted on the Irish Stock Exchange as they quite obviously don't give a stuff if the lads tell each other what's happening down the pub at night.

Don't let the fact that Aer Lingus is also quoted on the London Exchange get in the way of ill informed posting.

Also ignore the fact that if there is a further approach it would not be to the Exchange but to the company until it is formally notified to the exchange for onward transmission.

Finally and presumably, your keyboard does not have a € symbol?
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speedbored
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RE: IAG Really Wants Aer Lingus

Fri Jan 16, 2015 3:45 pm

Quoting Egerton (Reply 10):
The 1st bid of £2.30 was kept secret for a month or two until leaked on 18th December 2015. The 2nd bid of £2.40 was leaked on 29th December. If the media reports today suggesting a 3rd bid prove correct, that is the third leak.

All of these so called "leaks" were actually public statements from either Aer Lingus or IAG. They are not trying to hide anything and it would not be legal for them to do so.
 
YouGeeElWhy
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RE: IAG Really Wants Aer Lingus

Fri Jan 16, 2015 3:47 pm

Hope EI would not adopt the BA YQ charge scheme on reward flights. If they do not then it will be great for Oneworld customers flying TATL.

Quoting jfk777 (Reply 2):
Miami, DFW and LAX are just 3 cities for expansion from Ireland.

Sadly it feels like AA would jump on the DFW-DUB flight.

Quoting vhtje (Reply 34):
Why not have BA use BHX and/or MAN as a reliever hub to LHR? Wouldn't that be cheaper, easier, and pose less of a risk for IAG than buying EI?
IAG needs planes and people to operate that reliever hub. They get all of that with the EI buy. Plus I am sure there is some tax reason to have a hub out of the UK.

Quoting vhtje (Reply 34):
Presumably, the prize for IAG is EI's LHR slots. But competition authorities will presumably heavily shackle IAG's ability to move them from EI to BA's wider network by insisting the slots be used for flights to Ireland?

I think it would be more likely that DUB would see more flights form UK airports like GLA/EDI/ABZ/MAN/NCL/LBA as BA could reduce those flights to LHR thereby freeing up LHR slots. Same could be said for major EU airports (like FRA/CDG/FCO/AMS) where EI already has service. The only route I could see the competition authorities getting antsy over is DUB-LHR.

[Edited 2015-01-16 07:50:09]
 
ckfred
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RE: IAG Really Wants Aer Lingus

Fri Jan 16, 2015 3:51 pm

Quoting MIflyer12 (Reply 5):
That's a concept with repeated failures. Ask the people of STL (ORD/DFW), MEM (ATL), or CLE (ORD/EWR). Passengers who are indifferent to where they connect and who are already served by multiple hubs will search hard by price - and generally won't be worth chasing, at least by carriers with capacity discipline.

Remember one thing. LHR is slot controlled. If an airline needs to add arrivals and/or departures at any given time, it probably needs to buy or lease slots.

STL made sense for AA at the time of the merger, because congestion at ORD had reached nightmare proportions. The summer of 2000 was one of the stormiest that I remember going back to the 1970s. The slot restrictions had been dropped. Both AA and UA had ramped up operations that needed perfect weather to work. On a clear day, if the winds required a runway configuration that didn't maximize operations, the delays kicked in, badly.

So, for someone in Chicago who want to travel to Belfast or Edinburgh, it would make a lot of sense to fly to DUB, rather than LHR. AI and AA could then coordinate their ORD-DUB schedules, just as AA has done with BA on ORD-LHR. By the same token, if a person was scheduled to fly VIE-LHR-ORD and a delay cropped up, then DUB becomes an option, in additon to MAD.

DUB isn't going away. Ireland is and will continue to be a popular tourist destination. The business media keeps reporting that Ireland has many advantages, when it comes to laws which are of interest to manufacturing companies, including taxes and intellectual property. The downside has been that it is easier to fly to other European business centers, such as London, Paris, and Frankfurt.
 
BrianDromey
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RE: IAG Really Wants Aer Lingus

Fri Jan 16, 2015 3:52 pm

Quoting vhtje (Reply 34):
Why not have BA use BHX and/or MAN as a reliever hub to LHR? Wouldn't that be cheaper, easier, and pose less of a risk for IAG than buying EI?

Because they have no operation there, it would cost a lot of money and which routes do they choose? EI gives them significant share in the Irish market, although a formidable competitor in the form of FR. EI already have scale and routes can be added to the current Dublin operation.

I've previously posted on the Irish threads on the subject, which I will repeat here.

The important thing to remember - a point that is frequently lost - is that it is NOT BA that is making offers for EI, it is International Consolidated Airlines Group "IAG", holding company of BA, IB, VY and IAG Cargo. I don't think taking the last airline IAG purchased is a reliable extrapolation of what is likely to happen to EI. BD was, for many years, starved of capital and asset stripped by its owners. It had a limited short haul network and much capacity was sold to 'partners' for very little. It was not viable, LH pumped something close to £1 Billion into BD over the decade they were involved. VS have found that simply offering short haul connectors is not a viable business - even with the carrot of LHR slots. Those slots are about to go back to IAG. It seems clear to me that IAG don't particularly need LHR slots presently, but they do need to be able to grow over the North Atlantic. MAD is not a great choice for the North Atlantic, but DUB is. It is a perfect opportunity for a 'reliever' hub to allow IAG to continue to grow over the North Atlantic while the UK politicians fumble with the inevitable issue of a third LHR runway. Similarly, AY would be highly complementary into Asia, particularly China where IAG remains problematically weak. I don't think IAG will ever be able to compete for intra-European traffic with LH and AF-KL, their hubs are on the periphery, but given the pricing power held by FR and U2 in that market, it is probably best left to them, unless specific markets make sense for VY.

The benefits for IAG, oneworld and the IAG/AA joint venture are clear. For customers, it is less clear, but Irish consumers should be able to avail of Avios, a 'proper' frequent flyer programme and more routes into North America.
 
vv701
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RE: IAG Really Wants Aer Lingus

Fri Jan 16, 2015 4:38 pm

Quoting vhtje (Reply 34):
But why go to all the trouble and risk of buying EI for that?

Why not have BA use BHX and/or MAN as a reliever hub to LHR? Wouldn't that be cheaper, easier, and pose less of a risk for IAG than buying EI?


No feed. Not large enough catchment areas to support much O&D travel resulting in high local costs per passenger carried. More importantly EI operate between DUB and not only the six provincial domestic airports BA does fly to from LHR but to seven that BA does not serve from LHR. They are BHX, BRS, CWL, EMA, IOM, JER and NQY. Trans-Atlantic traffic from the catchment area of these airports, much of which might currently be transiting AMS, could be offered the opportunity to transit DUB instead. This could save both time and money.

Quoting bluesky73 (Reply 35):
If you look at G-BNWA for example on TheBASource website below there are numerous domestic fights from London to Glasgow and Edinburgh.


There are two daily BA 763 flights from LHR to EDI and two to GLA . So when the seven short-haul configured BA 763s are retired there is a definite question about what will replace them on these domestic routes and on the flights that this small fleet currently operates to seven international European destinations (AMS. ARN, ATH, FRA, IST, LCA and MAD.).

It is also worth noting that EI will soon need to find a profitable use for their small fleet of 320s currently on wet lease to Little Red. Expanded feeder flights to DUB might fit the bill.
 
Eagleboy
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RE: IAG Really Wants Aer Lingus

Fri Jan 16, 2015 4:48 pm

Quoting rj777 (Reply 1):
Hey.... if they can make Aer Lingus profitable, more power to em

2014 will be their 4th consecutive year in profit. They have costbase equal to EasyJet and were the 3rd most profitable airline in Europe in 2013.

Quoting Egerton (Reply 10):
The Aer Lingus fleet will all need replacing with new tech stuff, can the existing shareholders fund this capex?

A350 is already fully funded...in addition EI have approx Eur 450M in net cash. (Eur 1,1Bn in gross cash)

Quoting Wingtips56 (Reply 14):
How big a factor is the FR stake in EI? If they hold out, are there enough votes/leverage for IAG to prevail anyway?

FR are being forced to dispose of all but 5% under competition authority instructions. Case decided that the are interfering with a competitor.

Quoting bluesky73 (Reply 18):
Once A359s arrive the A330s could be reconfigured for domestic use for EI/BA

A350's are to replace the A330's

Quoting AirbusA6 (Reply 20):

How convenient is DUB for connecting passengers? Would people from the UK regions potentially prefer connecting there to, say AMS?

Why go UK-AMS-USA? In addition DUB has US pre-clearance so you land in the US as a domestic pax.
 
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ClassicLover
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RE: IAG Really Wants Aer Lingus

Fri Jan 16, 2015 4:57 pm

Quoting r2rho (Reply 30):
I can see the logic of this for BA (LHR slots + reliever hub + elimination of a competitor), but I have strong doubts about its benefit for consumers, and of its approval by the competition authorities.

Already something like 25% of Aer Lingus' trans Atlantic seats are from connecting passengers in Europe.

The US immigration pre-clearance plus a competitively priced product along with easy transfers in Dublin have made this a great success. Long haul at EI is currently having flat beds installed on the A330 fleet, and long haul is expanding rapidly and quite profitable.

Having DUB as a reliever hub and putting the connecting traffic from the UK regions through there may result in BA being able to use some of their domestic slots to EDI, GLA, MAN and so on for other flights as the passengers going to the USA can go via DUB instead of LHR.

Everything about IAG making offers for EI makes perfect sense for all parties concerned. It was mentioned in an article that EI has been lucky as there has been no capital expenditure on fleet over the past few years which has been great for them. However it's coming up to time where they're going to have to look at replacements for their European A320 fleet, plus the A350s are due in the next couple of years also. All of that requires money. While EI is profitable, this could well be difficult, so having the financial muscle of IAG coupled with the discounts that can be obtained by ordering for all the airlines in the group, the synergies are very beneficial.

I hope this succeeds!
I do enjoy a spot of flying, especially when it's not in economy!
 
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Miami
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RE: IAG Really Wants Aer Lingus

Fri Jan 16, 2015 5:09 pm

I personally think this would be a good idea for Aer Lingus. If BA can help them out. I say do it.

Quoting jfk777 (Reply 2):
Dublin will be a reliever hub for IAG and BA

  

Quoting jfk777 (Reply 2):
British Airways has the feed that can allow the Dublin hub to expand to a level Aer Lingus can not achieve itself.

  

Quoting jfk777 (Reply 2):
Miami, DFW and LAX are just 3 cities for expansion from Ireland.

  

[Edited 2015-01-16 09:09:40]
Aviation is proof that given, the will, we have the capacity to achieve the impossible. - Eddie Rickenbacker
 
kaitak
Posts: 9783
Joined: Wed Aug 18, 1999 5:49 am

RE: IAG Really Wants Aer Lingus

Fri Jan 16, 2015 6:55 pm

Quoting YouGeeElWhy (Reply 38):
Sadly it feels like AA would jump on the DFW-DUB flight.

No "sadly" about it ... bring 'em in!

Quoting YouGeeElWhy (Reply 38):
Quoting vhtje (Reply 34):Why not have BA use BHX and/or MAN as a reliever hub to LHR? Wouldn't that be cheaper, easier, and pose less of a risk for IAG than buying EI? IAG needs planes and people to operate that reliever hub. They get all of that with the EI buy. Plus I am sure there is some tax reason to have a hub out of the UK.

There are actually more UK cities served from DUB than there are from any UK regional hub, including any London airport. There will be scope to increase the feed; the local O&D traffic, plus the connecting feed, should help. Years ago, Aer Lingus Commuter used to serve more cities than they do now, but many have been cut (though some, like LBA, are making a return). With no EI shareholding to worry about, the gloves will be off at FR, so it's going to be pretty fierce competition on DUB-UK routes in the coming years!

Quoting Eagleboy (Reply 42):
Hey.... if they can make Aer Lingus profitable, more power to em
2014 will be their 4th consecutive year in profit. They have costbase equal to EasyJet and were the 3rd most profitable airline in Europe in 2013.

Don't forget that EI has had FR on its doorstep for many years; it's about 21 years now (I use the introduction of the 732s as the "turnaround" marker) since FR began its transformation from being a directionless no-hoper to a low cost carrier and ever since, the competition has become fiercer and fiercer. And even despite 9/11, industry downturns, our own national economic crisis and Christoph Mueller's predecessor, who was a bit of a disaster, EI has survived and thrived, so they should be seen as a very attractive prospect. They have a lot to offer. And with the support of IAG, they can grow faster and build a more effective hub at DUB. (The DubHub?).
 
blink182
Posts: 5370
Joined: Mon Oct 18, 1999 3:09 am

RE: IAG Really Wants Aer Lingus

Fri Jan 16, 2015 8:21 pm

Quoting kaitak (Reply 45):
with the support of IAG, they can grow faster and build a more effective hub at DUB. (The DubHub?).
Quoting Wingtips56 (Reply 9):

DUB can offer preclearance for the U.S.-bound flights, which would be attractive. If EI were to rejoin Oneworld as a result, then they could capture some flow from AA and BA frequent flyers who would be able to connect over Ireland and skip the crawl through Heathrow.

As to the LHR routes, BA and EI would be able to consolidate what are currently competing schedules, which could free up some LHR slots for other destinations, without really bleeding EI. Fewer flights on larger aircraft could keep the capacity up.

IIRC, BA didn't serve DUB until after EI withdrew from oneworld, and LHR has always operated at capacity. US preclearance at DUB is hardly new. Why are EI and IAG such a better match for each other now? How would this be any different from when EI was in oneworld?

I haven't examined EI's financials, but I think IAG wants EI more for the carrier's financial performance after what appears to be a successful turnaround and business model. BA covers similar territory as EI albeit at a much larger scale, and BA and IB have a much larger transatlantic presence. Sure, some optimization between MAD, BCN, LHR, and DUB might occur, but I'm not sure this is about route network.
Give me a break, I created this username when I was a kid...
 
Armodeen
Posts: 1233
Joined: Wed Aug 28, 2013 10:17 am

RE: IAG Really Wants Aer Lingus

Fri Jan 16, 2015 9:31 pm

Quoting VV701 (Reply 41):

No feed. Not large enough catchment areas to support much O&D travel resulting in high local costs per passenger carried. More importantly EI operate between DUB and not only the six provincial domestic airports BA does fly to from LHR but to seven that BA does not serve from LHR. They are BHX, BRS, CWL, EMA, IOM, JER and NQY. Trans-Atlantic traffic from the catchment area of these airports, much of which might currently be transiting AMS, could be offered the opportunity to transit DUB instead. This could save both time and money.


Devils advocate here...

Manchester in particular has huge local demand, and has the largest domestic network of any airport in the UK (I'm not too sure how it matches up to DUB in that sense tbh). If IAG were to buy FlyBE instead of EI they would have that massive domestic feed into MAN all to themselves.

The pax numbers between DUB - USA and MAN - USA are very comparable, and for the rest of the world slanted in Manchester's favour. I'm not saying it's as simple as that in the real world, but it's not so outlandish as to be totally nuts.

*edit* formatting went crazy.

[Edited 2015-01-16 13:38:31]
 
kaitak
Posts: 9783
Joined: Wed Aug 18, 1999 5:49 am

RE: IAG Really Wants Aer Lingus

Fri Jan 16, 2015 9:51 pm

Quoting Armodeen (Reply 47):
If IAG were to buy FlyBE instead of EI they would have that massive domestic feed into MAN all to themselves.

The pax numbers between DUB - USA and MAN - USA are very comparable, and for the rest of the world slanted in Manchester's favour

Fair points, but how many of those MAN-USA (or Canada) flights are operated by OW carriers - BA doesn't fly from MAN to the US anymore and AA has just JFK and ORD. Using EI, there would be much better feed through DUB. As for looking east, yes, MAN has the advantage here, but DUB is about looking west.
 
spectre242
Posts: 135
Joined: Wed Jan 03, 2001 10:46 am

RE: IAG Really Wants Aer Lingus

Fri Jan 16, 2015 10:07 pm

Are there advantages to IAG or OW for having an Irish-based operator in their portfolio from a cost/tax/regulation viewpoint? I know several leasing companies register aircraft in Ireland. Norwegian's controversial transatlantic startup is supposedly to be register in Ireland too. What are the specifics behind those, and can IAG take similar advantages through EI?

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