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AER LINGUS HAS rejected a buy-out offer from the owner of British Airways.
IAG has confirmed that it has submitted an offer for the Irish national carrier but that the Aer Lingus board has turned it down.
A follow-up offer has not however been ruled out by IAG which said in a statement that there is “no certainty that any further proposal or offer”.
“A further statement will be made if and when appropriate,” an IAG statement added.
Aer Lingus says that the proposed deal was rejected on Tuesday after the board felt that the offer “fundamentally undervalues Aer Lingus”.
Aer Lingus also said it “strongly urged” shareholders to take no action.
IAG was formed by the merger of British Airways and Spain’s Iberia and is led by former Aer Lingus CEO Willie Walsh.
Walsh was boss of Aer Lingus between 2001 and 2005 before he took the reins at British Airways.
In reaction to the surprise announcement, Aer Lingus shares soared by more than 7% on the Irish Stock Exchange.
Ryanair is the biggest single shareholder in Aer Lingus and has made three failed attempts to buy the airline since 2007.
In early 2013, the European Commission barred Ryanair’s third attempt to take over Aer Lingus, citing concerns that the interests of passengers would be badly affected.
Ryanair still owns 29.8% of Aer Lingus, while the State owns 25.1%.
British authorities had ordered Ryanair last year to slash its holding to 5% on grounds of unfair competition, but the group is appealing the ruling.
Additional reporting from © – AFP 2014
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Aerlingus landing slots at Heathrow are worth over £350 million. This is what BA want.
Lol at that figure.
Based on what?
100 mill, if even.
Nope the last slot traded hands to AA for $31mil, and before that BA at £12mil.
Based on that the value of 25 Aer Lingus slots would be £300mil on what BA paid or $771mil based on American.
It’s difficult to say though as slots are so rare… Only 2-3 a year trade hands. If you dumped 25 of them on the market they wouldn’t be worth as much but it’s the best we have to go on.
Not according to Heathrow. http://centreforaviation.com/analysis/heathrow-airports-slot-machine-hitting-the-jackpot-again-108646
In a presentation given in Sep-2012, Heathrow’s Head of Network Development Sarah Whitlam estimated the average value of a daily pair of slots at the airport.
The value varies considerably by time of day, with an early morning slot pair worth around GBP15 million, falling to GBP10 million at midday and around GBP5 million in the evening. She also estimated the value of a non-daily slot pair at up to GBP0.5 million for a single day.
Average value would be less than half of what you are quoting plus a discount for scale.
Good poaching by BA at a time when Mueller is leaving, Ryanair will be forced to reduce its holding down to 5% and its transatlantic business is taking off. Plus Aer Lingus have those valuable landing slots at Heathrow, especially at a time when capacity in London is becoming limited. I see why BA would poach EI. It will not be the final offer but I can’t see a sale going through.
It could be Michael O’Leary’s lucky day.
He gets a ready made buyer for Ryanair’s stake and doesn’t have to release the shares on the open market, avoiding that depressing the price.
BA wont buy unless they get majority control. Would deliver no benefits to BA with 29%
Bad news for Irish travellers. Aer Lingus’ valuable Heathrow slots would be switched over to BA routes, leaving Irish travellers with fewer options to make long-haul flight connections with the many airlines at Heathrow.
Added to that, Aer Lingus would be reconfigured to maximise the flow of Irish travellers onto the BA network. Aer Lingus would become a regional feeder airline of BA and the development of additional long haul routes from Dublin would not be a priority.
Suddenly the Ryanair link-up seems like a better option for Aer Lingus passengers.
Except for USA pre clearance at Irish airports, that’s valid. Also, EI and FR would mean an increase in price for Irish consumers, as seen on routes where FR drove EI out, eg, Dublin to krakow.
A combined BA would be forced to sell Heathrow slots… Like they did after the BMI merger, not to mention Virgins failed domestic route slots are coming back on the market next year.
Who remembers the bad aul days of the EI/BA duopoly £300 for a return flight to London, EI are making money and are shifting a lot of cargo in the belly of the planes going to the USA.
Also any merger and you will have redundancies as you cannot have 2/3 people doing the same job,I’m sure the competition authority would object also but I wonder will they object to the Topaz take over of Esso.
Even if the competition authority objected to the Topaz takeover of Esso you might not hear about as one of the owners of Topaz controls a lot of the media in Ireland.
Wtf has topaz got to do With this story? Give it a rest ffs.
It is called a monopoly/ duopoly one company having the majority of market share is not good for competition,The reason why I mentioned Topaz because it is an Irish company just like EI.
It wouldn’t be anywhere near being a monopoly. One reason: Ryanair.
If BA bought EI there would not be. Monopoly out of Ireland. BA don’t operate here except on code share agreement. Invalid argument.
Code share with what airline? unless I’m going a bit mad BA operate A319/320 on the Dub – Lhr route about 10 times a day.
I see them on a daily basis.
Moonshine….Wrong,,,BA operate flights to Heathrow and LC airport from Dublin.multiple daily flights.
737′s actually
Build a bridge
They use buses on the Dub Lhr route long time since I’ve seen a BA 737 at Dub.
BA use 319′s on the city route. 737′s on Heathrow
I flew that route more than 30 times in the last year… Never set foot on a 737. In fact I don’t think BA base a single 737 in LHR… If there’s any there in gatwick.
You’re talking a load of waffle Michael. BA fly A318 and A319 planes to Dublin from Heathrow. They are the fleet inherited from British Midland when they merged into BA I believe. The Dublin to London City route with BA uses Embraer E190 planes.
Also, there was never a notion of an American Airlines and BA merger. I think you are confusing it with them being One World code share partners. Dublin is also not an AA hub. A few flights to an airport by an airline is not a hub!
They’ve sent all the ex-BMI planes to Gatwick 6 months. You never see them on the Dublin-London route anymore. It’s there original A320/319.
There was talk of an AA/BA merger in the nighties. Richard Branson objected, painted ‘no way BA/AA’ on the side of Virgin planes. Don’t think the USA authorities were too keen either.
Damian..I never said Dublin is an AA hub. I said DUB “COULD ” be an AA HUB..
ALSO dub has 1.8 million transfer passengers in 2013 . More than “a few flights”…I’m guessing you’re not living in Dublin and you don’t want to see it
Ah right. Yeah it was July the last time that I took BA to LHR. You could see the little tell tale signs that they were ex BM then… The logo was still in certain places around the plane… The panel that the flight attendant uses for dimming the lights and making announcements etc still had it…
Guessing wrong Michael. Seems to be a theme with you…
I was referring to one airline when I said it wasn’t a hub, i.e. It’s not an AA hub…
BA’s A318′s are used on the LCY-JFK routes, with a stopover in Shannon for fuel on the westbound leg. They use A319′s and A320′s on the LHR-DUB route
All business class with 32 seats as well! that would be sweet! Nearly like a private jet!
Lol right!!! I work for ba!!!
They operate Airbus A319/320s on the LHR route (plans are in effect to supplement one service a day with a 767 in the near future) and they operate the Embrear 170 on the LCY route with the occasional 190 when needs be!
on LHR BA use A319s while LCY they use ERJ-190s
I don’t think that the national flag carrier should be sold to Britain’s national flag carrier. Even though both airlines are no longer owned by each State, Aer Lingus and British Airways are still regarded, by their respective national publics, as their nation’s flag carrier. Indeed, the workers of each airline see themselves as working for their nation’s flag carrier. This would no longer be the case for Aer Lingus if it were bought-over by British Airways.
Left over resentment for the British…. I assure you the staff these days see themselves as working for a paycheck. A lot if not all the pride in their jobs and the carriers is gone
Regardless of who’s bidding for EI the government should never sell it’s stake. We’ve sold off enough of the family silver as it is and our infrastructure is falling out of state hands.
The slots EI built up in major airports were built up while they were owned by the people. Them slots are crucial for an island nation like ourselves to maintain.
If the government want to earn a quick buck then move RTE out to a greenfield site on the M50, there’s plenty along the way from Blanch to Ballymun and sell off Montrose. That way we’re not losing anything but cashing in on the land value that our state and semi state companies are currently sitting on.
I used to love BA… Was one of their most frequent flyers but it’s gone downhill heavily.
Frankly it’s time Walsh and his penny pinching left the airline. The food is terrible, the lounges packed, the staff onboard overworked, inflight amenities taken away, Terminal 5 a poorly operated shopping center, European business class no more… The list goes on.
Adding up my partner and I spent about €30,000 (probably more) each with British Airways last year and found each time the experience gets worse.
I generally fly BA long haul as I find them the best among their competitors, especially going to the US and South America. American based carriers are just poor… The BA lounges are quite good. Last time I was in one was July in T5. Wasn’t too busy. Lounges are definitely the best compared to others. Missed silver by a few points and now back to zero again. Boo! :-(
I don’t fly to the middle east, but Emirates and Etihad look really good for going that direction.
American carriers used to be just as poor but they are fast improving while BA goes downhill.
AA’s new transcon A320 JFK to LAX/SFO planes are really nice 3 class planes with flat beds in biz and first. And they are refitting the 777′s with new business class seats while BA’s design is 10 years old and involves climbing over people to get out of your seat. Not to mention BA short haul economy and business now use the same seats while AA use bigger wider seats.
American Airways will have gone from having the oldest fleet to the youngest average pane age in about 2 years….
Yeah, I’ve taken some old 767 AA rust buckets back from Dallas in the past year. Interior from the late 80s… Every seat pocket had a booklet all about their new fleet coming into play. The Transcontinental A320s did look nice… and their 777s aren’t bad. Their customer service is still a bit lacking.
The BA 747-400s are starting to look a bit tired on the inside, but I was reading recently that BA are updating them all in 2015 which will do them until end of life in about 8 to 10 years… What replaces those for BA will be interesting. Such a shame to see the Queen of the Sky slowly but surely phase out…
BA use A320 on LHR-DUB route.
Funny that the uk ruling has made Ryanair reduce it’s holding in an Irish company and then IAG come in with a bid, just wait for MOL reaction to this. IMO, IAG should have waited until Ryanairs share was reduced to 5%,
Now Ryanair has very strong grounds to appeal the UK ruling
competition will drop to the floor and back to the style of prices last seen in the 80′s when Aer lingus and BA had a cartel.
Look at what virgin have done with the Heathrow slots that they originally outbid Aer Lingus on and then used Aer lingus planes for the domestic routes only to cancel them this year and then use them for other routes on the main virgin Atlantic route network.
Those flights were a commercial disaster, bleeding money with a 37.6% load factor….
Can’t blame Virgin for scrapping them. Surprised it took so long.
A lot of people are getting a little confused here.
BA have not put in an offer for Aer Lingus, IAG have! Now I know the media doesn’t help when they still state that Willie Walsh is in charge of BA when in actual fact he is in charge of IAG the holding company of BA, Iberia and now low cost carrier Vueling! Keith Williams is the head of BA!!!
The big fear IMO is that Aer Lingus would be asset stripped and have its LHR slots redistributed amongst the IAG airlines and what’s left perhaps morphed into a similar model as Vueling! Just at the time that Aer Lingus are looking at reintroducing a business class product on short haul!
This left leaning government with the Labour party in there probably won’t sell their 25% Stake before the general election. They would be too scared of the unions. IAG comprise Iberia and BA…not just BA. They also have a merger with AA. AA could easily create a transatlantic base at Dublin and use the US border protection facilities ( also at Shannon ). They’d have very little competition. Delta and United probably wouldn’t bother spending the investment here to take them on.
You don’t really know much. They will not create such a hub in Dublin.
As for the Gov stake, they should not sell it until FR reduce their holding which likely wont happen for another year.
Unions have no problem with the Gov selling or not as the Gov have next to no say in EI.
A merger with aa? When?
I’m afraid you’re not well informed Ronan . AL already have a hub at Dublin. Aerlingus had over 1.8 million transfer traffic alone at Dublin in 2013. Facts Ronan before criticism..
BA saves about £150 in air passenger duty per long haul premium seat it sells via Dublin vs. Heathrow.
That’s a strong incentive to use Dublin as a hub.
Pre-clearance also allows them access to any USA domestic airport. There are perhaps a dozen commercially viable US airports using 787′s it can reach from Dublin that it can’t land a plane in from London.
Thank you Drew…..someone speaking sense..
unfortunately air lingus is ran for air lingus alone. the sooner its sold off the better. the employees sense of entitlement is mind-blowing.
God man! Change your tune! You always go on about this “sense of entitlement”!!! What’s wrong with you? Still bitter over that rejection letter from HR?
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