Aer Lingus needs to look at merger - Willie Walsh

Willie Walsh, chief executive of British Airways feels that Aer Lingus may need to surrender it's independence in order to secure it's future. Mr. Walsh was speaking yesterday at the Jim Kemmy Business School at the University of Limerick. Given the way that the Irish economy has performed in recent times and given the way that the carrier has suffered in recent times he said that".. you could now make an argument that it's future as an indepenedent carrier is not that secure and maybe Aer Lingus does need to look at a relationship with some other carrier".
He added however that the current legacy ownership structure will make it difficult to attract new investors. "With Ryanair a significant shareholder at 30% and the Irish government with 25%, ESOT (Employee Share Ownership Trust) with 15% I struggle to see how anyone would invest or want to invest with that sort of structure".
On the subject of a Ryanair takeover of Aer Lingus, Mr. Walsh said that he had always found it difficult to understand why Ryanair would want to takeover Aer Lingus. He wouldn't say that a merger was impossible but it would be difficult given the competition implications. "If you look at the theory of competition, the consumer couldn't win with the two firms being merged. That competition would disappear."

Ryanair welcomes BAA decision

Ryanair was quick to respond to today's news that the BAA had reached an agreement to sell London's Gatwick Airport for £1.5bn. Reacting to the news the airline tempered it's enthusiasm by saying that it recognized the sale of Gatwick as the first step in the breakup of the BAA monopoly, urging the full recommendations of the UK Competition Commission be implemented whereby Stansted and a Scottish Airport would also be sold.
The carrier also called for the breakup of the DAA (Dublin Airport authority) which owns and manages Dublin, Cork and Shannon Airports, forecasting that Dublin will lose 2m passengers this year with Cork and Shannon losing a combined 1m. Against this backdrop, Ryanair will grow by 9m passengers this year. "Even Aer Lingus is growing traffic in the current recession, while the DAA monopoly is losing millions of passengers and thousands of jobs", it added.

 

Ryanair discusses it's future at Shannon

It is five years since Ryanair signed it's current base agreement with Shannon Airport. Under the terms of the agreement which runs out in April 2010 the airline has invested $400m in based aircraft and grown it's passenger numbers at the airport from 300,000 in 2004 to 1.9m in 2008.
Ryanair has said that since the Irish Government introduced it's €10 travel tax on April 1st last passenger number have declined at Shannon. Last winter the airline based 6 aircraft at the airport, reducing that strength to four during summer 2009 and proposes just three based frames this coming winter.
Ryanair has on numerous occasions in the past four years stated that it's Shannon operation has lost money in each of the five years of the current agreement.
In spite of these losses, Ryanair has written to the Shannon Airport Authority (SAA) confirming that if the government drops the travel tax by February 1st next and if the SAA extends the airline's cost base for a further five years then Ryanair will "commit to delivering more than 1.2m passengers annually, on up to four based aircraft".
If both conditions are not met, Ryanair has promised to reduce it's base strength to one aircraft operating the London and some UK provincial routes and delivering just 300,000 passengers.
Shannon faces into the coming winter with a bleak future and a large drop in revenue on the horizon. Delta Airlines and US Airways terminated their transatlantic services in recent weeks. Cityjet is terminating it's Paris route this weekend and Aer Lingus is as good as terminating it's transatlantic services from next spring. On top of that the €20m preclearance facility is rapidly turning into a white elephant - Aer Lingus has refused to use it and USCBP won't increase the manning levels to give 24-7 operations since the passenger numbers aren't there to justify it. With a handling fee of just €10.50 per passenger cleared, a significant throughput is required to make the facility pay for itself.

Ryanair to cut Kerry - Stansted capacity

Kerry Airport has found that it too is not immune from the Ryanair sword. The carrier has announced that it is cutting it's Kerry - Stansted service from 14 per week to 4, blaming the decision on a combination of the Irish government's €10 travel tax and the high airport costs at Stansted. In contrast though frequency on Kerry - Luton is being increased from four flight to seven flights per weekFrom October 25 there will be one flight a day between Kerry and Luton and one flight between Kerry and Stansted on Monday, Wednesday, Friday and Sunday. Passengers planning on early departures to London are restricted to Fridays and Sundays: the only days with flights to London before 10am.

Ryanair's plan to help Scottish tourism

Ryanair announced today that it had made a proposal to Scotland's Finance Minister John Swinney whereby it would help the country achieve it's targeted growth in tourist numbers of 50% between now and 2015. Citing the precedent of a route development support program which operated from 2002 to 2007 Ryanair says that it will grow passenger numbers and reverse the downward trend in passengers arising from the £10 APD passenger tax. In the first 8 months of this year passenger numbers at Scotland's airports fell by 6.3% YoY to 15m whilst in the same time frame those at Ryanair grew 12% to 43m. In the event of the route support program being implemented Ryanair has pledged to add an additional 1.5m passengers per annum which would have the knock on effect of creating 1,500 jobs. The APD tax is due to increase to £11 on November 1st next.

Ryanair to give away 1.1m seats after Panorama program

Before the BBC aired last night's Panorama edition titled "Why hate Ryanair?", the carrier vowed to give away 100,000 free seats for every false claim made in the "hatchet job investigation". As Ryanair put it "These free seats will allow hard pressed BBC licence payers to escape from Panorama’s false claims, shoddy reporting and cover ups."
Today Ryanair honored the commitment by releasing 1.1m free seats on the basis of eleven false or misleading claims which it says that the BBC aired on the program, including the last claim :


" 11. Panorama claimed that “O’Leary is a bully” – this is clearly false when the whole world knows that O’Leary is a kind and gentle, caring and thoughtful, sensitive and saintly human being widely beloved by all Ryanair’s 6,500 people and its 66m passengers."


It must be said that none of the claims made in the program against the airline were particularly malicious in intent, for the most part concentrating on the consumer side of the experience. It was not so much a 'hatchet job' as being mugged by a teddy bear - the program didn't even cut Michael O'Leary's opportunistic commercial for Ryanair when he was doorstopped by reporter Vivian White leaving the airline's recent AGM. All in it was yet another publicity coup for the carrier. Had Ryanair spent any money on it it would have been well spent !

Ryanair tackle 'Panormama' head on

"It's more like Bananarama than Panorma", so said Ryanair's chief executive Michael O'Leary this evening, referring to the BBC's flagship current affairs program in advance of tonight's edition titled "Why hate Ryanair ?". O'Leary was speaking on RTE Radio One's "Drivetime" program which featured an item about the ongoing spat between the airline and the BBC. The "Bananarama" comment was made in relation to what Michael O'Leary ascertains is going to be a hatchet job by the broadcaster which he says can drag up little more than two untrue statements in relation to the airline's costings and it's past dealings with Airbus. As further proof of the hatchet job, O'Leary went on to add that the program makers had refused to agree to his request for either a live interview or to broadcast an unedited interview. 
The "Panorama" reporter Vivian White was also interviewed on the "Drivetime" program. He stated that the BBC could not agree to an unedited interview being shown as part of the program as this would have constituted the broadcaster ceding editorial control to Ryanair, something which it was not prepared to do. Mr. White said that he would be happy to have the program judged by what it contains, adding that he had no complaint about the way that Ryanair had dealt with the BBC. 
As the discussion progressed the listener was left wondering if it all wasn't just a case of the battle of the brands with both parties stirring it up for all it was worth. 
The last laugh may well be Ryanair's - for a company which doesn't differentiate between good and bad publicity, tonight's program is 30 minutes of free TV advertising funded by the British TV licence payer and shown on the commercial free BBC !

Ryanair protester strikes again !

John Foley has proven beyond doubt that there's nothing like a father's love for his daughter. Back in July he interrupted the final day's play in the first test match between England and Australia in protest over Ryanair's treatment of his daughter. Foley claimed that she had paid for her training at the airline only to have her contract terminated almost immediately afterward. Today John Foley, complete with a protest banner climbed onto the roof of the Ryanair training center at Bishop Stortford near Stansted Airport. With the assistance of the fire service he voluntarily ended his protest just after noon and was arrested for 'numerous offences'. Before beginning his rooftop ascent Foley had called the 'Observer' newspaper to announce "They are training the children to terminate them and it's got to stop".

Aer Lingus seeking 102 Shannon redundancies

Following yesterday's announcement on the cost improvement plan to secure the airline's future, Aer Lingus held briefing meetings with staff at both Cork and Shannon today. At the Shannon meeting attended by the airline's chief executive Christoph Mueller and corporate affairs director Enda Corneille staff were told that the company is seeking 102 redundancies out of 130 cabin crew based at the mid west airport. Staff were also told at the meeting  that the company's long haul product is where the problem lies. Speaking to RTE news after the meeting Enda Corneille said that if the cost improvement program didn't deliver there was a very real threat to the company's long haul services from both Shannon and Dublin.
In further fallout from yesterday's announcement, Ryanair chief executive called on the government to explain why it had refused Ryanair's last offer which would have doubled the size of the Aer Lingus fleet and added 1,000 jobs.

DAA's Collier number 3 in state pay ranks

The Sunday Independent newspaper has listed the top earning CEOs of the state monopolies which run the country. In third place behind the ESB (Electricity Supply Board) and The HSE (Health Service Executive) comes the DAA's (Dublin Airport Authority) Declan Collier who has been heavily criticized for the heavy remuneration package which he enjoys. According to the Sunday Independent, Mr. Collier's basic salary €348,000 per year or €29,000 per month. When all the bonuses, pension entitlements and perks are added in, Mr. Collier's total benefits reach €638,000 per year paid for by the Irish taxpayer, a  figure which is almost double that of US President Barack Obama's salary. Speaking to the Sunday Independent, Ryanair chief executive described Collier as 'a mere waste of space'. He said: "Collier is nothing more than a waste of space, who gets rewarded with almost €700,000 a year. The DAA has been bankrupted by the abortive second terminal that nobody wants. He is overseeing the demise of Dublin Airport and, what's worse, Lenihan ( Minister for Finance) appoints him to the board of AIB (Allied Irish Banks) as a public interest director. Totally ludicrous, but unfortunately utterly predictable for this useless Government."

Is the BBC preparing to air Ryanair Hatchet Job ?

The BBC's Panorama program is preparing to air a program entitled 'Why Hate Ryanair?' on Monday next October 12. On Friday last Ryanair took the opportunity at a press conference in London to release ongoing correspondence between the airline and the BBC. At the end of August the Panorama team requested an interview with Ryanair chief executive Michael O'Leary as part of the program content, a request which was initially  refused by Ryanair as it felt that it would only contribute to the controversy stirred up by minority interest groups being facilitated by the broadcaster. Following this refusal the BBC requested permission to attend the Ryanair AGM on September 24 last, a request which was also refused by Ryanair's Stephen McNamara who said that the company had 'no intention of facilitating yet another BBC hatchet job'.
By September 23 the 'Times' newspaper had gotten wind of the story and the fact that the BBC had sent someone along to a recent Airbus press conference with the sole intention of getting Airbus chief Operating Officer John Leahy to make disparaging remarks about Michael O'Leary and Ryanair walking away from a potential deal in 2001. The 'Times' article caused a 'volte face' at Ryanair who informed the BBC that Michael O'Leary would agree to appear on the program provided that the interview was broadcast live or broadcast in an un-cut prerecorded state.
The next day, September 24 the BBC team flew to Dublin to meet with Michael O'Leary but refused to Ryanair's request for a live or uncensored interview. It would appear that the meeting ended with Michael O'Leary feeling the need to clarify facts in relation to two points raised by the BBC - the Airbus deal and Ryanair's charges.
O'Leary said in his letter that the facts of the matter do not back up the BBC claim that he 'shook hands' on  a deal with Airbus on January 11 2002 and then walked away. A fax received from Airbus offering better terms  on January 21 confirmed that no deal had taken place on the earlier date. In relation to 'hidden fees', O'Leary's letter to the BBC points out that the airline has no hidden charges with passengers able to decline any services that they do not wish to avail of.
Not missing a beat, Michael O'Leary summed up his letter to the Panorama team by berating them for their travel policy - "Finally, as an organisation funded by licence payers, shame on you for travelling to Dublin today with British Midland and wasting yet more licence fee income, when you could have flown on Ryanair from Gatwick, Stansted or Luton, at a fraction of the high fares charged by British Midland and with fewer delays or no lost bags either."
Panorama wrote to Ryanair on September 25 confirming that it would not in principle agree to the airline's request for either a live or un edited interview with Michael O'Leary. Following a further number of contacts between both parties the BBC stated that it would clearly state in the program that Ryanair did not close a deal with Airbus that they "understood clearly that Ryanair insist they do not have any hidden charges. We do not intend to to make false claims about Ryanair but to describe and attempt to analyse it's remarkable success, and to see whether some commonly made criticisms leveled at it stand up or not, which is why our working title is "Why hate Ryanair?" ".
The BBC website has a teaser for the program at Panorama but the clip is 'Not available in your area' when viewed from Ireland.

Ryanair's September traffic figures

Ryanair today issued it's traffic figures for September 2009. The airline carried a total of 6.12m passengers for the month which represents a 17% YoY increase over September 2008 when 5.23m were carried. Load Factor  grew 1% YoY for the month to 85%. For the rolling 12 months to the end of September the airline has carried 63.3m passengers which represents a load factor of 82%.

Ryanair cancel Osijek service due to 70% load factor

A report in Croatia's Glas Slavonije sheds some interesting light on Ryanair's business model. The airline has decided after 5 1/2 months of operation on the Osijek - Hahn route to end the service for the winter since load factors were only 70%, a figure which would please most legacy carriers. As of September 27, a total of 10,000 passengers had traveled on the route. Osijek Airport and Ryanair signed a 5 year mutual cooperation agreement prior to the service commening on May 6 this year, an agreement which allows both parties freedom to review their mutual decisions.

EU Transport Chief accused of conflict of interest

EU Transport Commisioner Antonio Tajanai has been accused of a conflict of interest as a result of spending six hours aboard a Ryanair aircraft in the company of the airline's chief executive Michael O'Leary. The whistle stop tour took place last week, routing Dublin - Knock - Kerry - Dublin. At each stop on the trip, O'Leary and Commissioner Tajani held a press conference in support of  a 'Yes' vote in this week's referendum on the Lisbon Treaty. O'Leary was his usual frank self during the trip, at one point mentioning that the Ryanair - Aer Lingus merger was the only airline deal turned down by the Commission on competition grounds in the past thirty years.
Although Ryanair and the EU Commission make strange bedfellows, the Commission were quick to point out that no discussions took place between O'Leary and the Commissioner on their longstanding (hostile) relationship nor was there any lobbying by Ryanair in relation to the Aer Lingus takeover. According to a Commission spokesperson, any mention of Aer Lingus was in front of the press, adding that the Commissioner regularly meets with airline heads. Corporate Europe Observatory, a Brussels based lobbying watchdog remains unimpressed however saying that the there was considerable conflict of interest for Commissioner Tajani by allowing himself to be hosted by an airline that continues to have disputes with the EU Commission. Pictured above in the copyright picture by Michael Kelly, Ryanair B737 EI-EFP is seen in dublin on Friday last with it's pro Lisbon 'Ryanair says Yes to Europe' billboard titles.

Ryanair call on government to 'axe the tax'

Ryanair today called on the Irish Government to axe the passenger travel tax of €10 imposed on passengers travelling out of the country. The call came in response to the DAA (Dublin Airport Authority) announcement earlier in the month that Dublin Airport's August passenger numbers fell by 15% YoY, a drop of 364,000. Ryanair believes that the decline in passenger numbers at Dublin is as a direct result of the €10 travel tax and "high / increasing passenger charges at the Govt owned DAA monopoly".
In a recent question in Dail Eireann (Parliament), Clare Fine Gael TD, Pat Breen asked the Minister for Finance , Brian Lenihan if he planned to review the €10 travel tax in light of the recent losses at Aer Lingus. In his response to Deputy Breen, the Minister in defending the imposition of the tax stated that Ireland was not alone in applying a tax on air travel, citing the UK, France, Australia and New Zealand adding that the Irish rate compared favorably with other countries. Minister Lenihan also stated that the travel tax constituted a part of a larger purchasing decision (for passengers) and that the tax "shouldn't have much of an effect on tourist numbers". He further rejected the theory that the tax is impacting on passenger numbers, contending that the woes of the airline industry are as a result of "weak world economic activity". 
Minister Lenihan summed up by saying that "We currently face significant financial challenges and the air travel tax is an important revenue raising measure. I tried to be as fair as possible in looking at areas for additional tax revenues. It is also worth noting that fuel used by commercial airlines is completely exempt from tax, so it's a sector that already has considerable preferential treatment. I have no plans to review the air travel tax."

O'Leary rules out third Aer Lingus bid

The Ryanair AGM was held on Thursday last, September 24. At the meeting the airline's chief executive Michael O'Leary ruled out a possible third bid for Aer Lingus. He did moderate his comments however by stating that Aer Lingus would eventually run out of cash forcing it to turn to it's shareholders to raise equity. "We would be happy to invest but only if it becomes a low cost carrier", said O'Leary.
The airline has cut it's full year passenger forecast from 67m to 66m, largely accounted for by capacity cuts at it's Stansted and Dublin bases. In spite of this drop and a 20% drop in average air fare the airline expects profit to double year on year from last year's €105m to somewhere between €200m and €300m for fiscal 2009. In a break with tradition the airline may dip into it's €2.5bn cash pile to pay a one off cash dividend or a share buy back scheme. The bulk of the company's cash will be retained however as the 'next big order' has yet to be finalized with either Airbus or Boeing.
At the meeting Michael O'Leary indicated that Ryanair's long haul plans are still some way off - long haul aircraft positions are still firm and haven't suffered the same damage that short haul orders have endured during the current recession.

Cable & Wirless, Lufthansa Technik win Ryanair contracts

Ryanair has awarded a 5 year contract worth €15m to Cable & Wireless for management of the airline's IT and communications network across 180 airports in 26 countries. As part of the deal C&W will provide an 'always on' infrastructure for management of Ryanair's European telecoms network including airports, bases, data centers and headquarters. The deal also covers the customer side interface from booking through to check in with the airline's touch screen check in kiosks being connected via the system.
Ryanair's head of IT, Eric Neville commented that “Ryanair benefits from commercial flexibility across the entire solution, providing us the capacity to grow our passenger numbers to 67 million in 2010. We’ve worked with Cable & Wireless for a number of years now, and it has consistently delivered the excellent service we require. Its innovation, expertise and ability to service our network enabled the company to win this new contract."


In Belgium, Lufthansa Technik is to add a line maintenance station at Charleroi to support a new contract with Ryanair. Under the terms of the deal, LHT will cater for up to eight B737-800 aircraft including call out, night stop services and defect rectification.

Ryanair to reintroduce smoking !

Ryanair's latest wacky idea is backy ! The airline announced today that it would be selling 'Similar Smokeless Cigarettes' on it's flights to help those passengers who just can't handle the stress of a short smoke free flight. The cigarettes which look and feel like a real cigarette do not have to be lit but deliver nicotine by inhalation. According to the airline ' "Similar Smokeless Cigarettes" contain no toxins or chemicals and are harmless to the user and to those around them.' which would seem to indicate that they don't contain nicotine either !

Ryanair takes 'Yes' campaign to YouTube

Ryanair announced today that it was launching it's vote 'Yes' campaign for the Lisbon Treaty on YouTube. On October 2 next, Irish voters will be voting to approve the Lisbon Treaty and in an effort to target the transient voters and younger more media savvy voters, Ryanair has taken it's campaign onto YouTube. As is to be expected, the airline's chief executive Michael O'Leary pulls no punches when admonishing the opponents of the treaty and the current Irish establishment. Those expecting an announcement that MOL will continue in politics at some point in the future will be disappointed - he firmly quashes any such expectations !

Ryanair announce two Italian bases - nr 35 and 36

From January 2010 Ryanair will base two new aircraft at Bari in Italy, adding nine new routes to the seven existing routes operating from the Italian city. In February the airline will base one aircraft at Brindisi and add four new routes to the existing five. Passenger numbers are expected to grow to 1.2m and 650,000 respectively as a result of the expansion.
The routes and frequencies are as follows :

Bari to	Begin	Freq (pw)
Brussels (Charleroi)	Jan	4
Cagliari	Feb	2
Dusseldorf (Weeze)	Feb	3
Genoa	Jan	3
Karlsruhe (Baden)	Jan	2
Paris (Beauvais)	Jan	4
Trapani	Feb	4
Treviso	Jan	6
Valencia	Feb	3

Brindisi to	Begin	Freq (pw)
Barcelona (Girona)	Feb	2
Eindhoven	Feb	2
Trapani	Feb	3
Treviso	Feb	4