Wednesday 22 November 2017

Pros and cons of airline merger for the travelling public

• Ryanair might inject fresh capital into Aer Lingus, enabling it to buy more aircraft and boosting the number of destinations it flies to within Europe and in North America.

• When Ryanair made its previous takeover offer in 2008, it said it would eliminate the fuel surcharge imposed by Aer Lingus on its ticket prices and also pledged to cut its short-haul fares by 5pc for three years. It could offer similar terms this time around.

• Aer Lingus would become part of a strong group. Ryanair is already bigger than German carrier Lufthansa and is one of the world's most profitable airlines. A marriage with Ryanair could arguably make for a secure, long-term future for Aer Lingus, keeping a brand the public like alive.

• An increased number of destinations to and from Ireland could also give a much-needed boost to Ireland's tourism sector.

CONS:

• Ryanair's no-frills ethos could seep into Aer Lingus. Many consumers like the fact that Aer Lingus offers a different style of customer service and more relaxed rules.

• While Ryanair will say the two brands will effectively be able to compete against each other, the reality may be different. It's difficult to see how two separate airlines, both controlled by the same group and controlling the bulk of traffic from one airport, can effectively compete on pricing.

• Even if Ryanair offered concessions, such as ensuring competition from rivals at Dublin Airport following a takeover, no other airline is likely to want to take on a combined Ryanair-Aer Lingus entity on its home turf.

• A merged Ryanair-Aer Lingus entity could also see other airlines ditch Dublin routes if the muscle of the Irish group proved too much to be able to compete against effectively.

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