Ryanair CEO Michael O’Leary confirmed the LCC is “open to talks on buying the Irish Government's Aer Lingus share”, which sits at 25% (BreakingNews.ie/The Guardian, 03-May-2011). Ryanair has a 29.8% share in Aer Lingus and has previously had two takeover bids for the carrier turned down. The European Commission supported the Irish government's warning that a takeover would be bad for consumers and blocked any deal between Ryanair and Aer Lingus, arguing that 14 million passengers a year would be hit by higher fares. The Royal Bank of Scotland has downplayed the LCC’s renewed interest, saying that a government sale of 25% of Aer Lingus would have a “negligible impact on Ireland's debt burden”, and the European Commission would block any stake sale to Ryanair, even if the Irish government was in favour of the sale. Christoph Mueller, Aer Lingus's CEO, has stated Ryanair’s 29.8% is like a "poison pill", in that it wards off other interested parties and complicates any attempt to join a global alliance.
Ryanair confirms interest in Aer Lingus
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LOT Polish Airlines: now restructured, and long haul focus is on 2020 growth. Partnerships critical
On 8-Sep-2016 LOT Polish Airlines announced its "2020 profitable growth strategy". This involves a goal to achieve "sustainable viability", after a restructuring programme which returned LOT to operating profit in 2014 after six loss-making years. Its privatisation may even be back on the agenda.
LOT currently ranks behind LCCs Ryanair and Wizz Air by share of traffic in Poland, which offers superior traffic growth potential versus Europe as a whole. The airline aims to increase passenger numbers from 4.3 million in 2015 to 10 million in 2020, growing its fleet from 43 to 70 aircraft. LOT's expansion will focus on long haul, particularly North America and Asia, where it currently has only five routes and where competition is considerably lower than on short/medium haul. Initial plans include the launch of Warsaw-Seoul this winter and a return to Warsaw-New York Newark next summer.
According to data from LOT, its restructuring has left it with a fairly efficient cost base by legacy airline standards and this will be important in competing with LCCs (but there is still a cost gap with LCCs). LOT's growth will focus on long haul but will need short-haul European feed – and partnerships. Although LOT no longer appears to be considering leaving the Star Alliance, it remains excluded from American and Asian JVs. Further, those JVs preclude members from working with LOT. Partnership growth will be as critical as it will be challenging.
Lufthansa to complete takeover of Brussels Airlines for possible integration into Eurowings
Lufthansa's supervisory board has approved the exercise of its call option to buy the remaining 55% of SN Airholding, the parent company of Brussels Airlines. Lufthansa acquired 45% of the company in 2009 and negotiated the option to buy the balance of the shares for no more than EUR250 million. The deal is expected to close in early 2017, once the details of the purchase have been agreed with the other SN Airholding shareholders.
Lufthansa and Brussels Airlines have an extensive codeshare agreement and are partners in the Star Alliance. Their existing relationship is such that Brussels Airlines already feels like a member of the Lufthansa Group. The main draw for Lufthansa has always been its Belgian partner's extensive African network (it is the number two airline on Western Europe-Central/Western Africa).
However, it now seems that Lufthansa will, at least partly, integrate Brussels Airlines into its Eurowings low cost brand. Lufthansa is keen to accelerate Eurowings' expansion through partners (and is also to wet-lease up to 35 aircraft from airberlin). Brussels Airlines' fleet and single-class configuration on short/medium haul should fit with Eurowings, but its unit cost and network airline business model are not characteristic of an LCC.