Ryanair offers to cut Aer Lingus short-haul routes
Updated: Tuesday, 22 Jan 2013 17:05
Ryanair has offered to surrender half of Aer Lingus’ short-haul business as it seeks European Union approval to buy its rival, according to two people familiar with the negotiations.
Bloomberg reports that Ryanair made its latest concessions to the European Commission last week, details of which were sent to competitors and customers for comments yesterday.
Under the offer some 43 routes would be given to budget airline Flybe, with British Airways taking three using London’s Heathrow airport.
Ryanair Chief Executive Officer Michael O’Leary said today that the company was “trying to tweak” earlier proposals to address regulators’ competition concerns over its €694 million bid.
He said he was confident the deal would be given the green light by the commission given the extent of the concessions promised.
''We don't expect it to go to an appeal process because it will be very difficult for the commission to reject this package of remedies because they are so transformational and revolutionary," Mr O'Leary said.
The commission has a 27 February deadline to rule on the deal.
Ryanair owns about 30% percent of Aer Lingus and in June renewed an attempt to buy the remainder.
The EU blocked a takeover attempt five years earlier, saying it would create a monopoly for Irish flights. Ryanair’s plan has also drawn opposition from Aer Lingus and the Government.
Stephen McNamara, a spokesman for Ryanair declined to comment on the extent of the concessions being offered by the airline to secure European Commission approval.
Flybe spokesman Mark Garraway and IAG spokeswoman Laura Goodes declined to comment when contacted today. Aer Lingus spokesman Declan Kearney also declined to comment.
Antoine Colombani, a spokesman for the European Commission, declined to comment.
Ryanair expects slow passenger growth in 2013
Ryanair expects passenger growth to slow in 2013 as it cuts back on short-distance flights in some markets due to higher airport fees, its chief executive said.
''I think the growth will be slower this year," Michael O'Leary told Reuters today.
He predicted that passenger numbers would increase 3-4% to up to 82.5 million in the year to March 2014.
That compares with expected growth of 4.2% in the airline's financial year ending March 2013.
''The summer this year will be mostly flat, most of the growth will happen in the winter of 2013-2014," Mr O'Leary said.
He said the company, which is expanding longer-distance flights, was aiming to order aircraft from aerospace company Boeing in late 2013 or early 2014.
The Ryanair CEO described as "overstated" Boeing's difficulties with the new Dreamliner 787 model, grounded by authorities around the world last week after a series of technical problems.