Thursday 29 September 2016

O'Leary: Loss of connectivity from Aer Lingus sale a load of bull

Published 19/04/2015 | 02:30

Michael and the bull. Photo: Tony Gavin
Michael and the bull. Photo: Tony Gavin

Ryanair chief Michael O'Leary has dismissed suggestions that the potential sale of Aer Lingus would harm connectivity and prove detrimental to foreign direct investment into Ireland.

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Speaking to the Sunday Independent at his home, Gigginstown House, in Co Westmeath yesterday, Mr O'Leary said the country's level of air connectivity had changed "very dramatically" over the past five years, making both Aer Lingus and the link with London's Heathrow far less important than they had been 20 years ago.

He said: "Aer Lingus provides very little connectivity to Ireland. They carry about 10 million passengers a year. We do 100 million passengers. Ireland's connectivity has changed very dramatically in the last five years. Maybe 20 years ago they could only connect across Heathrow. Now, they connect across Heathrow, Gatwick, Dubai, the Gulf and the US. Now much more people connect by flying into Charles De Gaullle or Schipol, so the whole thing about connectivity is nonsense."

Asked for his view on Aer Lingus's possible sale, for which a decision by the Government is due to be made within weeks, Mr O'Leary said: "I have to be very careful. We haven't received any proposal from IAG. IAG are in discussions with the Government and from a Ryanair perspective, we're agnostic. If we receive a proposal, the board will consider it in due course."

The Ryanair CEO reiterated his long-held position that Aer Lingus would not survive as an independent airline and would therefore need to come under the umbrella of a large parent carrier. "Aer Lingus is a relatively small regional airline. We've long held the view that it can't survive as an independent carrier and that it needs a large parent company. I personally think the best parent would be Ryanair, but that's been rejected three times. If the IAG offer is successful, we'll wish them well but they still won't be able to compete with Ryanair on price," he said.

Commenting on the decision of the UK's Competition and Markets Authority (CMA) ordering Ryanair to sell down its 28.9pc stake in Aer Lingus, he added: "I'm actually quite pleased with it. It's such a rubbish decision. I think it's inevitable it will be overturned. The reason they ordered us to sell down our stake, originally, was that we were blocking any other airline making an offer for Aer Lingus. Now you have IAG making an offer and they say 'well the circumstances haven't changed'. If the only reason you wanted us to sell down was that nobody would make a bid for Aer Lingus and now IAG has, the case falls apart. I think it's very helpful [to Ryanair]."

In a statement yesterday, a spokesman for Ryanair said the airline's lawyers were now seeking permission to appeal the CMA's final report to the UK Supreme Court.

The spokesman said Ryanair would seek to explain to the CMA, ahead of its final decision, why its final report must be amended to revoke the divestment order.

Ryanair believes the report is "based on bogus theories, secretive/redacted 'evidence' and unsubstantiated assumptions".

Turning his attention to yesterday's business and the annual sale of bulls and heifers from his Angus herd, Mr O'Leary said the turnout for the auction at Gigginstown House had been "good", while the prices being achieved had been "reasonable".

"They [the bulls and heifers] are all getting sold which is the important thing. They're like Ryanair seats. You've got to sell them all," he added.

Asked if there was any similarity between the way he runs his Angus breeding business and Ryanair, he said: "We look after our customers at Ryanair much better than we do our bulls and heifers. But the difference with this business is that like a lot of farming, this loses money and Ryanair makes money. Thankfully Ryanair pays for the farming losses."

Sunday Independent

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