Ryanair offers extra flights to Dublin from UK to head off competition claims
31 Jul 2013:
Michael O'Leary claims extra flights show competition with Aer Lingus has intensified
Michael O'Leary claims extra flights show competition with Aer Lingus has intensified
Aer Lingus aircraft in Belfast. Photograph: Peter Muhly/AFP/Getty Images
Ryanair has announced additional flights between the UK and Ireland
this winter, in a move it claims counters competition authorities'
concerns about the effect of it holding nearly a 30% stake in Aer
Lingus.
The extra daily return to Dublin from Stansted and four other UK airports comes despite its Irish rival saying fewer British passengers are making the trip across the Irish sea.
Aer Lingus blamed austerity for fewer British holidaymakers coming to Dublin, with "disappointing" passenger revenues from its major short-haul market.
Ryanair's chief executive Michael O'Leary announced the extra services ahead of a UK Competition Commission ruling, expected as early as 13 August, that is likely to order Ryanair to reduce its 29% shareholding to protect passenger interests.
He argued that in the six-and-a-half years since Ryanair has held its stake, competition has intensified, and that Wednesday's announcement of more flights proves that.
He has tried three times to take over his rival, but each attempt has been rejected by the European commission.
O'Leary said the competition inquiry was "politically motivated" and warned that he would immediately appeal against any ruling against it. "One way or another it's going to be in courts for the next five years."
He said: "The Birmingham Six got more justice than we're getting off the UK Competition Commission."
A provisional ruling in May found that Ryanair's minority stake could harm competition on UK-Ireland routes as well as blocking any purchase of Aer Lingus by other airlines.
Last week Ryanair offered to sell its entire stake to any airline that made a full takeover offer, in an attempt to head off a ruling forcing it to reduce its stake.
However, Christoph Mueller, chief executive of Aer Lingus, said: "The whole argument of Ryanair is that they have no influence [on Aer Lingus] and now they want to sell 80% of the company – that is an irony."Aer Lingus earlier said it had been boosted by record numbers of seats filled in June on long-haul routes, driving a 5% growth in revenues.
Mueller said "significantly" more American passengers were transferring on to continental Europe via Dublin.
Dublin has an arrangement with JFK airport in New York that allows passengers to pre-clear immigration in Ireland, avoiding the long queues on arrival in the US.
But Mueller said the UK market had changed. "The first thing we recognised is that inbound UK passengers are on the decrease."
He said that austerity and the weak pound meant people had curbed their holidays, particularly weekend breaks.
Mueller also pointed to British Airways having added capacity on the Dublin-Heathrow route, "clearly over and above what that market could afford."
He said around 80% of the 8 million passengers flying from the UK to Ireland annually fly on Aer Lingus or Ryanair.
Meanwhile Mueller insisted that the "wet lease" arrangement with Virgin Atlantic, under which Aer Lingus supplies planes and crew for Virgin's Little Red domestic service, would eventually be profitable, despite costs meaning it would at best break even this year.
Overall losses before tax worsened by 14% to €28.2m (£24.6m) for the first six months of the year compared with 2012.
Following new of Ryanair's plans to offer advertising space on its planes, O'Leary was asked if he would take an advert from low-fare rival airline easyJet. "I'd take an advert from anyone, even the UK Competition Commission," he said. COPY http://www.theguardian.com/business
The extra daily return to Dublin from Stansted and four other UK airports comes despite its Irish rival saying fewer British passengers are making the trip across the Irish sea.
Aer Lingus blamed austerity for fewer British holidaymakers coming to Dublin, with "disappointing" passenger revenues from its major short-haul market.
Ryanair's chief executive Michael O'Leary announced the extra services ahead of a UK Competition Commission ruling, expected as early as 13 August, that is likely to order Ryanair to reduce its 29% shareholding to protect passenger interests.
He argued that in the six-and-a-half years since Ryanair has held its stake, competition has intensified, and that Wednesday's announcement of more flights proves that.
He has tried three times to take over his rival, but each attempt has been rejected by the European commission.
O'Leary said the competition inquiry was "politically motivated" and warned that he would immediately appeal against any ruling against it. "One way or another it's going to be in courts for the next five years."
He said: "The Birmingham Six got more justice than we're getting off the UK Competition Commission."
A provisional ruling in May found that Ryanair's minority stake could harm competition on UK-Ireland routes as well as blocking any purchase of Aer Lingus by other airlines.
Last week Ryanair offered to sell its entire stake to any airline that made a full takeover offer, in an attempt to head off a ruling forcing it to reduce its stake.
However, Christoph Mueller, chief executive of Aer Lingus, said: "The whole argument of Ryanair is that they have no influence [on Aer Lingus] and now they want to sell 80% of the company – that is an irony."Aer Lingus earlier said it had been boosted by record numbers of seats filled in June on long-haul routes, driving a 5% growth in revenues.
Mueller said "significantly" more American passengers were transferring on to continental Europe via Dublin.
Dublin has an arrangement with JFK airport in New York that allows passengers to pre-clear immigration in Ireland, avoiding the long queues on arrival in the US.
But Mueller said the UK market had changed. "The first thing we recognised is that inbound UK passengers are on the decrease."
He said that austerity and the weak pound meant people had curbed their holidays, particularly weekend breaks.
Mueller also pointed to British Airways having added capacity on the Dublin-Heathrow route, "clearly over and above what that market could afford."
He said around 80% of the 8 million passengers flying from the UK to Ireland annually fly on Aer Lingus or Ryanair.
Meanwhile Mueller insisted that the "wet lease" arrangement with Virgin Atlantic, under which Aer Lingus supplies planes and crew for Virgin's Little Red domestic service, would eventually be profitable, despite costs meaning it would at best break even this year.
Overall losses before tax worsened by 14% to €28.2m (£24.6m) for the first six months of the year compared with 2012.
Following new of Ryanair's plans to offer advertising space on its planes, O'Leary was asked if he would take an advert from low-fare rival airline easyJet. "I'd take an advert from anyone, even the UK Competition Commission," he said. COPY http://www.theguardian.com/business
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