RYANAIR’S ambition to form a strong Irish airline through a takeover of Aer Lingus could be revived as the airline industry continues to suffer from the effects of the credit crunch.
Ryanair, which is Liverpool John Lennon Airport’s largest operator with 46 routes, had a 2006 offer blocked by the European Commission on competition grounds.
But the airline industry is beset with problems, and last week saw Canadian airline Zoom cancel its flights and Italian national carrier Alitalia seek bankruptcy protection.
Ryanair believes that the problems in the sector could force the competition authorities to reconsider its judgment after Aer Lingus said it was looking at “substantial” losses in 2009.
It announced half-year losses of £16.7m last week, which compared with a £5.5m profit in the same period in 2007.
Its fuel costs were about £140m after they had increased by nearly half on the back of soaring oil prices. However sales increased by only 10% to £515m.
Aer Lingus chief executive Dermot Mannion said: “It is now clear that we will require further fundamental changes in our operating cost base in order to minimise losses in 2009 and to help ensure the long-term viability of the business.”
However, Mr Mannion argued that its strong cash position – it has reserves of £650m – means the airline is in a better position than most European short-haul carriers and is not vulnerable to a takeover.
Ryanair, which owns 29% of Aer Lingus, issued a typically robust statement which criticised the management strategy and direction of its rival airline.
It said: “These results conclusively support Ryanair’s belief that its 2006 takeover strategy for Aer Lingus was the right one.
“As the current wave of European airline mergers and takeovers gathers pace, it is clear that Aer Lingus is being marginalised on the sidelines of European aviation, losing money, with no apparent strategy to return to profitability.
“Its independence strategy, which over the past year has delivered higher fares, a six-fold increase in its fuel surcharges, route closures in Ireland, and a lurch to substantial losses has failed its customers, its staff and has, we believe, failed to secure Aer Lingus’s long-term viability.”
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