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Ryanair to put Ireland on the map
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Hey, great news today. Ryanair are going to buy Aer Lingus. Now, I know most people like Joe Higgins think that anyone who makes money by hard work and talent is more evil than Martha Stewart, and that people being poor is far more noble than people not being poor, but me, I don’t. I am a big fan of O’Leary. He has shown that a company based in Ireland can take on and beat the rest of the world. And he pays millions in tax, unlike some of these people who sponsor GAA teams for a few grand and people love them.
Ryanair, unlike Aer Lingus, fly into and support the small regional airports. Kerry, Shannon, Knock, and Derry have more Ryanair flights then Aer Lingus do. Any talk of this sale causing fewer flights to Ireland is highly doubtful. Also, Ryanair are an Irish airline and, due to their size, are unlikely to be bought out by any foreign airline, certainly less likely to be bought out than Aer Lingus. This insures the Aer Lingus will remain in Irish hands.
When talking, O’Leary seems to be aiming to use Aer Lingus to take on BA and Lufthansa . I am guessing he plans to have Aer Lingus to be the long haul arm of Ryanair to take on the big players. Wait for flights to Australia from Ryanair and for Ryanair to start getting some of those large Airbus aircraft to apply the low fairs “pack them in” technique to the long haul market. Wait till you see low cost flights to America. Wait till Shannon comes a massive transatlantic hub with people flying from all over Europe to Shannon to get cheap flights to New York. Not only will Ryanair’s purchase of Aer Lingus revolutionise Irish air travel, it will also create more jobs and more tax take. But, of course, people like Joe Higgins will go on about “oh the poor workers” without realising that:
- This will make their jobs more secure
- This will create more jobs
- This will create more flights out of Ireland
- This will allow more working class people to enjoy the benefits of world travel that only is enjoyed by the well off at the moment
As for competition in the Irish market, Ryanair does not compete on the transatlantic, so the competition will not change there. On the routes that Aer Lingus and Ryanair compete on, they are competeing with other airlines already such as BA, Easyjet, Aer Arran, Iberia, and so on. There is already a lot of competition on these routes. One of the big things for Ryanair is getting people to travel that wouldn’t otherwise. Their low prices mean that people will travel. People don’t have to travel to Milan, but the fact that Ryanair will fly them there for a tenner means that people will do it. Ryanair are not going to change that. If they up their prices, people just will not fly and another airline will challenge them on the route. Prices will remain low. Aer Lingus will continue to fly to Heathrow as the market for that is still there.
The begrudgery in Ireland against Michael O’Leary is sicking. In any other country, a guy who can build a great business, creating thousands of jobs, and who keeps it in his own country and pays his taxes in full would be loved. But no, in this country we hate him for that. If you want to know why we lack people starting business in Ireland, it is this: we hate people who do what we cannot.
Also is it funny that Labour’s spokesperson on Transport is Shortall. 
More than 70% of the flights in and out of Ireland, and almost all the air cargo, will be controlled by one company. Hardly an ideal competition scenario.
It’ll be interesting to see whether the government had any contingency plan for this scenario, which was always a possibility once the company was floated. Also, as Keith’s comment highlights, the impact of several state privatizations will have been reduce competition, not increase it. Consider Eircom.
Simon, let’s remember that Ryanair get government subsidies all over the place.
It’s a stunt, nothing more.
I agree it’s probably a stunt, Damien, but it raises a lot of questions that Martin Cullen said didn’t need to be answered before he sold the airline.
There’s really nothing wrong with a monopoly as long as it does not abuse it’s position.
Besides that you have to give it Michael O’Leary, anyone who makes the unions shit themselves gets my support!
E.
Ryanair don’t do air cargo to my knowledge so how does them owning the air cargo arm change anything in relation to competition.?
Michael O’Leary is trying to pull the wool over the public’s eyes by claiming that Ryanair and Aer Lingus only compete on 17 routes and therefore it would not be a breach of competion rules.
Hey Mick, those are all routes out of Ireland as Aer Lingus does not compete with you on flights to Europe from the UK and you would therefore would have control of 70% of all flights to and from Ireland. Is that not one of those monopolies you’re always complaining about!
I suspect that Competition Law will see this move blocked under EU Treaty Articles 81 and 82. Thought in saying that the concentration of Ryanair landing slots and routes if different to that of Aer Lingus, with the exception of the home base. I am not fully up on the Irish Competition Act (at the moment) but suspect that the levers are in place to block such action. Or at least extreme divestiture measures to the Ryanair or Aer Lingus core businesses. This could of course end-up in Brussels with Commissioner Kroes, DG Compeition. O’Leary and Co are not that popular with the EU Institutions over various spats and also his close to the bone marketing ploys.
I agree that this maybe a stunt, but I’d detest it if they are successful. Technically there’s nothing stopping his taking the shares and capital at all.
Aer Lingus has its faults, but going the Ryanair way would do nothing for the economy. I take the various points people make about ‘revolutionising the airline and holiday industry’ yadda. We do need a robust carrier to represent the state and it would be shameful to allow this manoeuvre happen.
The unions are not going to be happy and I heard a UK based analyst on the radio this morning discussion the various downsides to a Ryanair takeover.
Jack M Eu competiotion did not block numnourous french mergers and british airways and caladion airlines or KLM and Air france.
Simon, I accept that.
The processes are lengthy (colonic like) and may not suit the leverage O’Leary decides to opt for. Divestiture too was a condition in at least one of those cases.
I do mention that there’s little to stop Ryanair acquiring a controlling stake. I wonder if there are poison pill provisions built in somewhere?
If we believe in competition it’s hard to see the justification for this move. It appears like a straight ahead monopolistic take over. Not very libertarian Simon.
Worse it may potentially cut down on the service provided. As it stands Aer Lingus offers flights to say Barcelona which actually land within spitting distance of the city whereas RyanAir lands miles away to the North. Perhaps a small thing to those of you under 35, but for those of us grey beards its nice to have even a modicum of comfort and it’s hard to see how RyanAir could see it as profitable to run two services into Barcelona and Girona.
Vis a vis world travel, I’m intrigued as to how the quick turnaround model that has allowed RyanAir to be successful in Europe can be mapped onto the US and other routes. Simply put such economies of scale appear unlikely if not impossible.
If you believe so strongly in copetition then surely you believe that Aer lingus should be spilt into single aircraft. And basically come like taxi drivers. But we know this would not happen as a degree of consulidation is needed in the market. This is just that. As for the Barcelona run. If it is still profitable why would they not run it? You yourself are willing to pay to go into Barcelona so they will charge you accordingly.