Ryanair Seeks Ownership of Aer Lingus
Tuesday, December 23rd, 2008
Ireland’s most successful airline is seeking to take over the Emerald Isle’s most famous carrier. Budget airline Ryanair, known as much the antics of CEO Michael O’Leary as for its rock bottom prices, is seeking to take over Aer Lingus. Ryanair currently holds a large share of Aer Lingus stock, but they do not have enough to constitute a majority. The Irish government retains a stake in Aer Lingus and states that it plans to keep it in order to prevent any sort of hostile take-over.
Ryanair wants to take advantage of the poor economy to drive up support for its take-over bid. However, O’Leary is not using the word’s “take-over” or “hostile.” He wants the two airlines to “combine forces” and create a stronger airline industry in Ireland. Aer Lingus is a famous brand, but it has recently been overtaken by Ryanair and other regional carriers in terms of profitability. British Airways and Virgin Atlantic have proven quite powerful in Western and Insular Europe. Aer Lingus is facing tough economic times. So is Ryanair, but the budget carrier has managed to stay ahead of the rest of Europe’s airlines with its no-frills business model and cheap prices. The airline is in a strong position compared to Aer Lingus. Therefore, though some sort of merger has not happened yet, it could happen before the end of the year.
Ryanair is planning to expand into the trans-Atlantic market in the coming years. They will have stiff competition from some very established players. Included in the trans-Atlantic group is the alliance (not yet merger) between American Airlines and British Airways. Continental Airlines has also shown it self to be strong on America to Europe routes. However, Europe’s low cost carriers are imploding from lack of business. Only Easyjet and Ryanair are left standing. With less competition on the continent, Ryanair is free to dream big and look abroad.