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Dublin: 10 °C Saturday 25 May, 2013

Ryanair offers to pay €694m in cash for Aer Lingus

In its latest attempt to take over its rival, Ryanair said this evening it will pay €1.30 per share for Aer Lingus.

Image: Niall Carson/PA Wire

RYANAIR HAS OFFERED to buy Aer Lingus for around €694 million in cash in a surprise announcement this evening.

It is the third time that Ryanair has attempted to take over its rival. The budget airline already owns 29.82 per cent of Aer Lingus.

In a statement to the Irish Stock Exchange, Ryanair said that it would offer €1.30 per share for the entire share capital of Aer Lingus. Shares in Aer Lingus were trading at 94 cent at the close of business today before the announcement was made.

Ryanair said that it believes circumstances have ‘changed materially’ since its first unsuccessful bid for Aer Lingus in late 2006.

The company said that the air transport market in Europe is consolidating into five major airlines – Air France, BA, Easyjet, Lufthansa and Ryanair – and that the long term future of Aer Lingus can best be secured within one strong Irish airline group led by Ryanair.

Ryanair said that Aer Lingus fares could be reduced and its traffic decline between 2009 and 2011 reversed by the move.

If the offer is successful, Ryanair said that Aer Lingus would be put on a ‘growth trajectory’ which will see Aer Lingus continue to fly to a number of Europe’s primary airport where currently Aer Lingus flies but where Ryanair does not wish to operate.

The budget airline said that the price per share that it is offering is 38.3 per cent higher than the closing price of an Aer Lingus share today and 46.7 per cent higher than the average closing price of an Aer Lingus share over the past six months.

The Irish government has said that it is open to selling its 25 per cent stake in Aer Lingus ‘at an appropriate time’ but only when market conditions are favourable and an acceptable price is agreed by Government.

Transport Minister Leo Varadkar has previously said that the Government would not sell off its stake for less than €1 per share.

Aer Lingus unions, staff to hold talks at Shannon over plans to sell off hangar >

Ryanair’s shareholding in Aer Lingus on course to be investigated >

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Comments (107 Comments)

  • I don’t believe this is a serious deal for an instant. Ryanair know that the Irish government and the EU doesn’t want them having a monopoly on flights out of Ireland and so are likely to block or be very slow to agree to such a deal.

    I reckon they’re doing this to try and smoke out Eithiad or Emirates and see if they make a counter offer. Then the share price goes up and Ryanair can either sell their Aer Lingus shares on the open market or sell them to the other bidder. In both cases they’ll end up getting rid of their shares for a higher price than they were currently at.

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  • Was waiting for my toddler daughter’s buggy after arriving in Dublin with Aer Lingus; one of the pilots went and got it, brought it to the door of the plane. Never got that kind of service with Ryanair.

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    • If Ryanair had an add on to have pilots get your buggy for you for a 5er would you select it? This is the reason Aer Lingus has been loosing Billions through the years this is the reason Ryanair is very successful nobody would expect that kind of service or indeed pay for it

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    • sharbar 19/06/12 #

      That’s the kind of customer service that I pay for when I travel, Ryanair focus more on that stupid bell than on their passengers, fair play to the pilot :)

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    • But Aer Lingus aren’t losing money!!!

      And someone doing something nice for a customer that costs nothing does more for a brand then cheap unfriendly service!

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    • Ehh no Cosa Nostra, I believe it was just perceptive intuitive customer service, willingness to help, and understanding of the fact that the buggy is more use to a parent at the airplane than in the baggage hall.

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  • Having recently flown with Aer Lingus and becoming ill during the flight, I can only hope that level of care and attention I received from the staff would continue under O Leary. Somehow I doubt it.

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  • Monopoly = bad.

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  • I don’t like it as i would prefer to have some competition.

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  • Ryanair hold airports to ransom and pull out of destinations at the drop of a hat. I live in Limerick and get home to Scotland now with Aer Lingus from Shannon to Edinburgh as Ryanair pulled the plug from both Shannon AND Edinburgh. This crowd cannot be allowed to have the monopoly, if it wasn’t for Aer Lingus I would be stuck

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    • Wendy Ryanair did the same in Manchester airport about 4 years ago, they pulled out of the airport because they would not reduce the landing fees. 2 years later Ryanair return to manchester with more routes than ever, they are chancing their arm, Bullies.

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  • Ryanair is a point to point airline which is fine if you’re just going from A to B and back again. Business travellers with onward international connections need an airline like Aer Lingus to facilitate this via their travel agreements. Also the majority of business travellers connect via Heathrow as that’s where the other airlines operate their flights to & from

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  • Ryanair want Aer Lingus for their inter continental routes which they would consider are more valuable than Aer Lingus are taking revenue wise from them. Their reasoning would be that by lowering service and cutting costs they could increase profit margins from each seat.

    What I wonder is how they would plan to deal with the unions? Not sure I’d fly Ryanair to the states though.

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    • Ryanair with international routes might be a great idea if they turn Dublin airport into a lowcost transatlantic hub, taking advantage of Dublin’s preflight immigration and pumping millions into the economy of this country.

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    • “Intercontinental”? Well yes they have a few routes to the US but it isn’t a major network. Surely the Heathrow slots would be a more strategic asset as they are very hard to get.

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    • Aerlingus is number 3 airline with slots at Heathrow behind BA & Virgin.

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    • If topic a bit, but airport coordination (http://www.acl-uk.org) , who manage the slots at LHR have a different view as to the expected slots this summer.. now BM have been dismembered since the scheduling so in reality we should see EI number 3… a lot better than the footie!

      BA – 4198 (The flying pension fund ;) )
      LH – 776 (Lufty)
      BM – 461 (BMI – pre breakup)
      EI – 330
      VS – 330 (Virgin)
      SK – 272 (SAS)
      AA – 250 (American Airlines)
      UA – 238 (United/ Continental)

      Reply
  • Ryanair want Aerlingus badly, they are willing to pay over 30 cents more than each share is worth. If they succeed it will be bad news for Irish passengers.

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  • “694m in cash”. Really? Cash?
    I bet it’s those Ryanair cards.

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  • enda 20/06/12 #

    Not going to happen I spoke to Leo

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  • I thought Ryanair werent allowed to take over AerLingus because of competition reasons. Was that not decided by the EU at some stage??

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  • We need competition between these airlines. Choice is good for the consumer. I fly every week with Aer Lingus and if you book in advance , you can get the same price as Ryanair. When money is tight, service is important and Aer Lingus can provide service. I wrote to the CEO of Aer Lingus recently and got a reply thanking me. There was a result and I would have received a FO letter from MOL.

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  • I can’t imagine how the government could possibly refuse. how could they refuse to sell to a legitimate buyer, at a very good price also… I wonder if etihad will put in a counter offer?

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  • sharbar 19/06/12 #

    Ryanair would make a sham of Aer Lingus if they were to take it over, for all the slating people like to give Aer Lingus it remains profitable whilst offering a better service to Ryanair..I for one really hope that this is rejected as I believe Ireland needs the competition. Otherwise folks your only alternative to get off this island will be the boat…

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    • rb 19/06/12 #

      agreed 100%. greedy o’leary has been itching to get his grubby paws on Aer lingus for years purely to control the competition for Irish owned airlines. offering a service Ryanair won’t fly to, pah! he just sees dollar signs proceeded by a chi-ching sound

      Reply
  • Do you think Germany would give up Lufthansa, the French give up air France, the Swiss Swiss air, Britain British airways, Australia quantas, the list goes on and on.
    I would consider Aer Lingus to be a asset to Ireland. Don’t give it up to Ryan air. O’ Leary will tear it apart.
    As for flying across the Atlantic service is important on a long haul flight. If I was to have a bad experience with Ryan air I would go with British airways or a American airline flying across the atlantic.
    Americans don’t like bad service and they wouldn’t put up with Ryan airs shit. That would be bad news for tourism coming into Ireland.

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    • Have you over flown cross atlantic with Aer Lingus? Service is very poor compared to other airlines like BA or Lufthansa.
      Also why do people think they will turn Aer Lingus into Ryanair? O’Leary has already said that they would keep the same name and brand.
      Finally your comment about Americans not putting up with bad service, you do know that Ryanair’s model is based on SouthWestern Airlines which is a very successful no frills American airline?

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    • Yes Ian I have flown across the Atlantic on Aer lingus. It’s the only way I go when i fly home to dublin from the states. I did fly British airways once and they have great service.
      As for southwest- I don’t hear any complaints about them regarding service.

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    • BA & Lufthansa are 2 of the worse airlines to travel with, i flew aerlingus to New York and enjoyed the service.

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    • Swissair went bust in the nineties, BA is a private company since the eighties and is now part of the same company that owns Iberia. Air France and KLM are the same company and so on. The “national” airline is a romantic notion that ceased to exist a long time ago everywhere else.The notion will sink in here too, eventually. The world will probably have moved to the next model then:)

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    • Ciaran I stand corrected. I did not know. Thanks for updating me.

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    • Lol… Swiss air is a subsidiary of Lufthansa they bought them out 5 or 6 years okay

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    • I work for BA, they are good but expensive! Aer Lingus is very reasonably priced across the Atlantic and provide a bloody good service for what you are paying, you get more on an Aer Lingus flight (food wise anyway, I know the booze isn’t free) then you do on BA! When Aer Lingus flew to the west coast you got two hot meals and a snack mid flight! You get feck all on BA after the first meal!

      Aer Lingus is a company we should be proud of. It went form a national drain to a sustainable profitable carrier that represents the Irish well abroad!

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    • There’s a key differential all those countries aren’t small island nations with one major air link to the rest of the world, Dub-Lon is the worlds second busiest air route for a reason…

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    • I flew BA alot, i can get a hotline ticket, but now the hotline ticket discount is not much less than the actual fare on the website.

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  • Please please please do not sell Aer Lingus to Ryanair.

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    • They cannot be stopped unless another airline comes in or the EU puts a stop to the takeover.

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    • Deirdre, how many Aer Lingus flights do you take every year? How many Ryan Air flights do you take every year?
      Aer Lingus is as good as finished. If any other airline other than Ryan Air buy it, it is guaranteed to be stripped of its asses and routes and sold on, with all its workers on the dole.
      Ryan Air have committed to keeping Aer Lingus operating, and no redundancies. Sorry, i dont want to see all the Aer Lingus staff on welfare.
      If RyanAir are so damn bad, how come so many people apply to work for them? how come they are growing and growing. They are by far, Europes largest passenger airline. Instead of dissing one of Irelands most successful businesses and one of Irelands largest employers, try and support it.

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    • Cal1 if ireland only had 1 airline your airfares will go up. Ryanair fares have already increased 20% last year, gone are the days of €0.99 e.w then €9.99 e/w the cheapest fare today is €30.99 e/w to London that’s when you book in advance. I fly to Dublin at least 10 times a year and in the last year i did not fly ryanair. I flew Aerlingus, BMI and Air France. Many people will avoid flying ryanair if they can.

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    • Mark,

      I just went onto the web-site and you can still get flights to Luton for 9.99… stick on the taxes etc and you are still only paying 42 euro return.
      Compare that to the cheapest aer lingus has.
      Also, Aer Lingus is going to be sold and all its assets stripped by some other airline and look at how many more people will end up on the dole.

      Reply
    • Prices will go up if Ryanair takeover Aer lingus. We need the competition.

      Compare ryanair prices to locations that they don’t have competition on and they are significantly higher. I take nearly 50 flights a year and Ryanair is only cheaper on about half the time.

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    • Cal1 Aer Lingus is not “going to be sold and all it’s assets striped and everyone on the dole”! What sort of uneducated and ignorant comment is that?

      Aer Lingus is profitable. Other airlines are interested, it’s a going concern.

      And for the record , Ryanair employ very few people in Ireland and I’d say even fewer of them are actually Irish! Trust me, I know!

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    • Seriously David …
      Anyone who makes comments like this one…

      So once you have been resident, for say 7 years, you receive a payment.
      Scrap all welfare
      Scrap student grants
      Scrap business startup grants
      Scrap tax free allowances
      Scrap or drastically reduce minimum wage
      Modify tax band to compensate’

      CANNOT BE TAKEN SERIOUSLY

      Reply
  • Norwegian have just placed the largest order for aircraft ever, anywhere. They will have to fill all those seats and this will ensure that competition will abound in Europe.
    Do you think that if O’Leary raises prices too much in the Irish market that a young and hungry company like Norwegian will leave the gap unfilled? I don’t think so.
    Have no fear, competition in the European skies is just beginning to heat up, regardless of who owns Aer Lingus.

    Reply
    • Finally someone with intelligence. The comments above have however highlighted again why our country is in so much trouble. Uninformed uneducated fools making comments without any basic understanding of the realities of either company or what competition really means.

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  • Dublin Airport is the primary airport of the Republic of Ireland and gives visitors their first impression of Ireland. Dublin Airport still is a very average and unattractive airport for a capital city. Michael O’Leary was mad that they built Terminal 2 because it is a waste of money and it should be a low cost terminal. Dublin Airport is not a low-cost airport; most carriers are not low-cost that fly into Dublin. Dublin is the only decent airport in the country when compared to the others. When you compare Dublin to London-Heathrow, Paris, Frankfurt, Amsterdam, Rome, etc. it still is way behind in modernization and size. Airports in Europe which have half the amount of passengers that Dublin has have two or more terminals and are kept well. People keep saying lower fares/ lower fares. Yeah low fares are great; but you still need to have a full-service national airline that offers more than the low cost carriers. Ex. Britain has British Airways and Virgin Atlantic. For low-cost airlines they have Easyjet and Ryanair. British and Virgin could be like Ryanair, ruthless cost cutters but not everybody likes that model and are willing to fly with such an airline. You need to have an alternative especially in a tiny country like Ireland. Dublin should also have a separate low-cost airport for the low-cost carriers. This has been talked about but never implemented. A Ryanair take over will be a disaster for Irish Tourism and Aviation. Who honestly would want to fly in a Ryanair plane to the states or any other continent? Some do, but not the majority. If they did, there would be no such airlines as Aer Lingus, BA, Air France, Emirates, KLM, etc. Airbus has even stated they will not deal with Ryanair as that would be too time consuming and costly. Talks with Boeing broke down and they have no where to buy planes. There is no doubt that Ryanair’s model is a success. But clearly not everyone wants to fly with Ryanair. If they take over Aer Lingus it will be the same as Ryanair; doesn’t matter if it’s still called Aer Lingus. Some say well they copied Southwest, yes and Southwest is a success. But America has five other legacy carriers to choose from that are not low-cost and those planes are full as well. Back in 06/07 Aer Lingus tried to use the Ryanair low cost model, it didn’t work. They launched the Dublin-Dubai route less than half than plane was full on flights. A year later Ethiad launches, total success and has 2 flights a day as well. Emirates had to upgrade their aircraft because of booked out flights. People want an alternative, which is very clear. Aer Lingus def. needs a lot of improvement but Ryanair is in no way the answer, at all.

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  • Amazing how everyone complains about Ryanair and praises Aer Lingus but it’s Ryanair who are incredibly successful and have buckets of money whilst Aer Lingus struggle. They must be doing something right.

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  • Monopoly?

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  • Aer lingus are experiencing revenue, profit growth, forging new partnerships while Ryanair stagnates, profits falling and only keeping loads up by mothballing planes… The Ryanair business model is dead.

    Let’s face it you can only scam each person once, maybe the dumb ones who would rather pay €5, €3 and €3 instead of €10 up front you can sting two or three times but then your market starts to decline

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  • Go get ‘em O’Leary

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    • Both airlines have their niche in this market but if Ryanair takes over it would be a sad day for Aer Lingus as this company offers that little extra.
      And I am willing to pay that little extra.
      As many will agree.
      O’Leary would turn Aer Lingus into another cattle-truck.

      Reply
  • anyone who says go for it Micheal is an idiot, ever here of a monopoly??

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  • They should have taken the ryanair offer of 2.80 a share back in 2006…

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    • The government never wanted ryanair to take over Aerlingus.

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    • Perhaps if the Government wanted control over the ownership of Aer Lingus they shouldn’t have privatised it. Keeping the 25% was silly. They have no influence on the company and have just lost money in the process. Should have kept it all or got rid of it all.

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    • The government should have kept all the shares in Aerlingus until it found another airline besides ryanair to take it over. But with the pension problems at Aerlingus that was the problem. I fly BMI from Heathrow to Dublin alot, now BA has taking over BMI its fares have gone up. I could get a flight with BMI for £52 return if i booked in advance, the cheapest fare with BA to Dublin is £90.

      Reply
  • Hope Europe and the government stop this they are shite company who screw passengers over with hidden charges all over the place and blame the DAA for everything that’s why they are so profitable screw the passengers!

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  • I think this hate to Ryanair is unjustified.

    FIrst of all it’s fantastic that one of the most successful airlines in the world comes from Ireland. Secondly, I’m also glad that there is alternative to “regular” (expensive) airlines. Yes, maybe service isn’t as great as it is somewhere else, but I wouldn’t see half of the world I did thanks to that.

    It’s like with hotels – we all want to stay in 5*, but there is nothing like 3* alternative for those who travel more or simply on reasonable budget!

    It’s all down to choice.

    Also – they are the one buying Aer Lingus, not the other way around, so they are must be doing something right…

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    • The fact is, Aer Lingus won’t be turned into a mini Ryanair. People see that O’Leary wants to but AL and instantly thinks he will do the same there. Why would he create a duplicate company doing the exact same as Ryanair, thus creating competition between two companies he owns and reducing profit margins for both?

      Aer Lingus has its own unique selling points which would be maintained under a Ryanair takeover. Newer and more comfortable fleet, same friendly workforce with a more business oriented market. Not the short distance budget traveler and holidaymaker with 3 kids and the rest of the family in tow that Ryanair targets.

      Reply
    • You said its all about choice….yet in hoping that Ryanair buy Aer Lingus you are eliminating that choice! Kinda contradicting yourself there.

      I assure you if Ryanair succeed in creating such a monopoly (I imagine it would be close to 90% of flights into and out of Ireland if it happened) you will only be paying 5 Star prices for 2 star service!

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    • EM 22/06/12 #

      Daniel, you said it “It’s all down to choice.”
      Where would the choice be if Ryanair took over Aer Lingus? Bad service, bad attitude and higher prices across the board.

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  • Looks like Ryanair’s ploy is working. Aerlingus’ shares at €1.15 this morning after closing at €0.94 yesterday. I’d say they’re trying to push up share prices and sell to the highest bidder.

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  • Go for it Michael

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  • Damocles 20/06/12 #

    Cash, eh? Trying to avoid the VAT?

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  • mcbab 19/06/12 #

    Good man michael! I for one would like to able to fly to USA for a reasonable fare.

    Reply
  • Here’s hoping Aer Lingus accepts and then adds ludicrous “handling” and “transaction” fees just before the sale goes through. About double would do nicely :D

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  • Great news. Hope Michael O’Leary & Ryanair succeed.

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    • Explain why a monopoly of the Irish aviation market is something you want to see succeed????

      Cos if you think that greedy O’Leary fella wouldnt take advantage of it you are a fool! Just look at the routes Ryanair do have monopolies on, I assure you that they are not “Low Fares”!

      Reply
  • great idea!one sucessfull irish airline group..we need things like this during this depression..they will probley expand the aer lingus brand and offer more connections for passengers!

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  • aer lingus dropping Shannon for Belfast turned out to be a financial failure. maybe under Ryanair we will get our Shannon to lhr back

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  • If he buys AerLingus he will do as he says and keep the european routes as they are but I reckon the transatlantic routes and aircraft will be transferred over to Ryanair to form his new vision – ‘RyanAtlantic’. He has been planning RyanAtlantic for a while and I reckon it could spell the end of an era for transatlantic AerLingus flights if this goes ahead. On the upside – cheap flights to America! :-)

    Reply
  • I’m hoping the sale does go through – airfares, particularly on internationally flights have sky rocketed in the past couple of years – competition is good.

    Reply

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