Business

Tuesday 17 October 2017

Ryanair deserves a lot of praise but this takeover bid must fail

RYANAIR is probably the most important Irish company to be created in the past generation. It is indisputably the only Irish company to have captured Europe's imagination and changed the way large numbers of people live. It is single-handedly propping up the Dublin stock exchange, which would cease to have any relevance if Ryanair were to follow CRH's lead and decamp to London.

Ryanair is also a source of legitimate national pride for many and remains a very Irish company but still manages to be punctual, honest and outspoken in a country where tardiness, dishonesty and timidness are highly-prized qualities.

It is worth saying this because Ryanair is probably the victim of more begrudgery than all other Irish companies combined but all these qualities do not mean that Ryanair should be allowed to rule the roost unchallenged.

Ryanair's bid must fail. Nobody in Aer Lingus or Ryanair will agree but it would probably be better for the country if Aer Lingus was to go under than be taken over by a rival no-frills airline. At least the Aer Lingus slots in Europe would be shared out, but if the bid succeeds then Ryanair would control 80pc of flights between the UK and Ireland -- which is simply too much.

Regulators here have proven themselves pretty useless over the past few years so it is perhaps fortunate for us that the UK is almost certain to stop this mad-cap bid in its tracks. The UK-based Office of Fair Trading is already looking into Ryanair's stake in Aer Lingus and it is almost impossible to imagine that it would approve a full-blown merger. Europe is also unlikely to approve.

The good news is that Aer Lingus is in relatively rude health. Ryanair was Ireland's first proper commercial airline but it is no longer the only one. Aer Lingus has re-invented itself under Christoph Mueller and Ireland Inc now needs to build on Mr Mueller's success rather than reversing it.

There is still much to do. In winter the links between Dublin and some European capitals such as Athens, Luxembourg or Berne are already close to non-existent, which makes it hard for companies to do business. Without Aer Lingus, it would be almost impossible to fly to many parts of the continent's financial core now that Ryanair has effectively pulled out of Germany.

It is not fair on Aer Lingus shareholders that they are overshadowed by two gorilla-sized shareholders: Michael O'Leary and Michael Noonan. In a ideal world, the Office of Fair Trading probe will set Aer Lingus free by forcing Ryanair to sell its stake while the troika will force Michael Noonan to sell our stake.

Whatever happens now, it is a sad reflection that the impetus to save the Irish airline will probably come from abroad.

Indo Business

Also in Business