23 January 2009

Ryanair admits defeat over Aer Lingus bid

Ryanair has conceded defeat over its hostile bid for Aer Lingus after the Irish Government said it would not support it.

The low-cost airline said it was disappointed it could not satisfy its 90% acceptance condition, but said it would ââ¬Åâœrespect and abideââ¬~ by the decision.

The Government, which owns 25% of Aer Lingus, said Ryanair's â'š~¬1.40 a share all-cash offer "greatly undervalues Aer Lingus and a merger on the basis proposed would be likely to have a significant negative impact on competition in the market".

"Because we live on an island Irish consumers depend very heavily on air transport. A monopoly in this area would not be in the best interests of Irish consumers," explained Transport Minister Noel Dempsey.

In a statement today, Ryanair chief executive Michael O'Leary said: ââ¬ÅâœWe donââ¬â¢t think it is in the best interests of Aer Lingus, which will be isolated as a small, peripheral, loss making airline, reduced to announcing so called ââ¬Ëœpartnershipsââ¬â¢ with other loss makers like United Airlines.

ââ¬ÅâœIt is strange, when the Irish Government is looking for â'š~¬2bn in cost savings, that it would reject an offer of â'š~¬188m for its 25% stake in Aer Lingus.

ââ¬ÅâœIt is also sad, when thousands of jobs are being lost in Ireland, that Ryanairââ¬â¢s offer to create 1,000 new Irish jobs in Aer Lingus over the next five years has been rejected.ââ¬~

By Bev Fearis

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• Reasons Why RyanAir Refused EI
  
  

  Nope, the main reason is that, if Mr O'Leary were to take over Aer Lingus, the Irish Government knows that they would all have to start paying for their flights - and that would never do!

  By Murray Harrold, Monday, January 26, 2009
• Ryanair Offer Rejection
  
  

  I beg to differ, Mr Transport Minister. I suspect you are trying to protect political interests more than 'avoiding a monopoly'. May I remind you that France, Germany, and The Netherlands have virtual monopolies now in the shape of Air France - KLM and Lufthansa. No one can argue that these airlines certainly control more markets than an Aer Lingus - Ryanair merger could ever do. Truth is, there are big politics in these affairs, with Michael O'Leary obviously hated in Europe despite the success of his airline model.

  By richard mandunya, Friday, January 23, 2009