Tuesday 6 December 2016

Ryanair chairman pours cold water on O'Leary plan

Published 01/10/2015 | 02:30

New Ryanair offices...Ryanair Chairman David Bonderman speaking at the opening of the company's new offices in Swords in Dublin. PRESS ASSOCIATION Photo. Picture date: Thursday April 3, 2014. See PA story INDUSTRY Jobs Ireland. Photo credit should read: Niall Carson/PA Wire...A
New Ryanair offices...Ryanair Chairman David Bonderman speaking at the opening of the company's new offices in Swords in Dublin. PRESS ASSOCIATION Photo. Picture date: Thursday April 3, 2014. See PA story INDUSTRY Jobs Ireland. Photo credit should read: Niall Carson/PA Wire...A

Ryanair chairman David Bonderman has cast doubts on Michael O'Leary's plans for his airline to provide connecting flights for long-haul carriers such as Air France-KLM and Lufthansa, saying he's a "sceptic" about the idea.

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In a rare and exclusive interview with the Irish Independent, Mr Bonderman - the billionaire co-founder of private equity giant TPG - also said he has no intention of stepping down from his role at the airline.

Mr Bonderman has been chairman of Ryanair since 1996, when he and associates at TPG, formerly Texas Pacific Group, invested in the carrier.

TPG has over $74bn (€66bn) worth of assets under management.

"It's too much fun," said Mr Bonderman, asked if he has given any thought to resigning as chairman. "Ryanair's a great company. Michael is a wonderful, if somewhat unusual chief executive. There's never a dull moment."

"I get on with Michael just fine. You have to recognise that Michael's Michael, and make some allowances around the edges. As long as Michael and the rest of the board think I can be helpful, I'll stay."

At Ryanair's annual general meeting in Dublin last week, Mr Bonderman ruled out any transatlantic service ever being operated by the carrier.

In today's interview he said that another strategic model being pursued by Ryanair - the possible inking of interlining agreements with airlines such as Aer Lingus and British Airways, might not be viable.

Both airlines are part of IAG. That was despite news that Ryanair has already held talks with Virgin Atlantic, Norwegian and Portuguese carrier TAP to explore possibilities.

"It would be perfectly logical for long-haul airlines like Air France to ask for our help to reduce their losses on short-haul flights," Mr O'Leary told French newspaper 'Les Echos' this week.

Ryanair wouldn't take responsibility for missed connections under such deals. Mr O'Leary also said some agreements could be announced by next summer.

But Mr Bonderman said he's not sure such arrangements will work effectively.

"As the industry grows and matures, people will try different things, including, perhaps, interlining," he said.

"I myself am a sceptic on that because if you're going to continue focusing relentlessly on low cost and low prices, you can't be doing things that are inefficient.

"Trying to co-ordinate flights, if that's what you do, with a long-haul carrier makes for inefficiency. Southwest has tried it in the States, but nobody has really tried it in a big way. As I say, I'm a sceptic."

Following the Aer Lingus sale, Mr Bonderman believes Europe will end up with a small number of main carrier groups.

"There'll be three big carrier groups - the French (with Air France-KLM), the Germans (Lufthansa) and the Brits (with IAG). That will be pretty much it for the legacy carriers.

"You'll have ultra low cost carriers like Ryanair and we'll see who shakes out amongst the rest of them."

Read the interview in full

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