Ryanair Preparing For Aer Lingus Bid
Abi BrayIrish commercial passenger carrier Aer Lingus is apparently preparing to repel a third takeover bid from arch rival Ryanair, the biggest budget airline in Europe.
A meeting has been scheduled by the board of governors at Aer Lingus for January 26 where the airline’s shareholders, including the 25percent stake owner Government of Ireland, will gather.
This is planned only days prior to the lifting of a 12-month stock market ban for Ryanair to take any further action.
The low cost carrier, which already owns a 29 percent stake in Aer Lingus, attempted a second bid for the Irish carrier a year ago, at the time making a £701million offer.
The offer was rejected while the Government of Ireland claimed that the bid undervalued the airline and the take over by Ryanair would create an unbalanced competitive dynamic.
Aer Lingus’s recent poor results, according to aviation specialists, could very well convince the Irish Government to accept another offer from Ryanair.
Aer Lingus posted a loss of £72million during the first half of the year, while Ryanair strengthened its position with a profit increase of 75 percent in the six-month period leading to September with a result of £372million.
Michael O’Leary, Ryanair chief executive, is now said to be preparing to make a third takeover attempt, according to sources close to the budget carrier boss.
In 2006, the European Commission had blocked Ryanair first bid for Ireland’s flagship airline on the grounds of competition grounds, although it did not try to stop the second takeover bid.
O’Leary is believed to be confident about his third attempt at Aer Lingus, so much so that it apparently has given him the negotiating strength to pull out of talks with aircraft manufacturer Boeing concerning a 200-plane. The Ryanair boss now believes that he soon will have access to a sufficient number of aircrafts through the acquisition of Aer Lingus.
One source said he thought the decision was mainly because of O’Leary’s confidence that his third attempt to take over Aer Lingus would be successful, adding scores of aircraft to the group’s fleet.
O’Leary has recently announced the pullout next summer of Alicante and Faro routes from airports in Ireland he considers too expensive such as Cork and Shannon airports. He decided to replace them by the tiny but cheaper Kerry and Knock airports.
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