Wednesday 15 August 2018

Ryanair chief predicts mergers and Norwegian to 'go bust'

Norwegian CEO Bjorn Kjos. Photo: Chris Ratcliffe/Bloomberg
Norwegian CEO Bjorn Kjos. Photo: Chris Ratcliffe/Bloomberg
John Mulligan

John Mulligan

There'll be more consolidation of Europe's airlines in coming months as higher fuel costs weed out unviable carriers, Ryanair boss Michael O'Leary has claimed.

"There is no doubt that Europe is moving towards a similar out-turn as North America, with consolidation taking us towards four or five very large major airlines in Europe," he said.

Mr O'Leary said that there will be "other opportunities" for Ryanair in mergers and acquisitions. The airline ditched efforts last autumn to buy Italian carrier Alitalia to focus on fixing its pilot rostering failure.

"If IAG or Lufthansa were to acquire Norwegian, for example, I think it's inevitable that there would be significant competition divestments coming out of that and we would certainly want to play a role in any… divestments that will arise out of a restructuring or a takeover of either an Alitalia or a Norwegian or any of the loss-making airlines at the moment," he said.

IAG, which owns Aer Lingus and is headed by Willie Walsh, recently bought a near 5pc stake in Norwegian. It was reported yesterday that IAG plans to table a fresh, €1.5bn indicative offer for the Scandinavian carrier.

Mr O'Leary claimed yesterday that Norwegian would "go bust" by the end of the year as fuel prices climbed.

A spokesman for Norwegian said: "As we have said before, these comments have no root in reality. Norwegian has been profitable for the last 11 years, with a strong liquidity, together with owning a substantial share of Bank Norwegian which has a market value of over 17bn krone (€1.78bn)."

Stock market-listed Norwegian raised cash from investors in March to shore up its finances.

Mr O'Leary said Ryanair was moving towards creating a similar corporate structure to that of IAG, which also owns British Airways, Iberia and Vueling.

The new structure would see units such as Austria-based Laudamotion, in which Ryanair is buying a 75pc stake, and its new Poland-based sun charter business, operate independently and report to the centre, which would then allocate capital to the units.

Irish Independent

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