Emmet Oliver: Aer Lingus -- O'Leary is the main problem
Published 21/10/2010 | 05:00
Aer Lingus may actually break even this year (okay, it's an operating level but let's not be too harsh) and its chief executive Christoph Mueller has impressively stabilised the revenue position and protected its cash pile by slashing costs.
The company is now worth almost €600m, an astonishing retreat from its IPO valuation in 2006 of €1.1bn. The shares are down from €2.20 a share to €1.10 per unit -- with Ryanair, the Government, pilots and quite a few Irish institutional shareholders nursing painful losses.
When one looks beyond the usual public statements from all the parties, something has to give and the only way the main bloc of shareholders, including Michael O'Leary, can recover even a portion of its investment is if the carrier is sold.
The EU is blocking Mr O'Leary citing monopoly concerns, the Government wants to sell but not to him and the pilots/ESOP would take the money, but don't fancy working for Ryanair.
What this tells us is that the only salvation is for another buyer to come forward from a choice of three -- British Airways-Iberia, Air France-KLM or Lufthansa.
But once again that man Mr O'Leary gets in the way.
Some of these buyers don't fancy the Irish market because of the heavy Ryanair competition they are likely to face, competition that has effectively (along with its own cost base) sliced off half the value of Aer Lingus in just four years. The result is stalemate and no release of cash for our pauperised Exchequer.