Ryanair has launched a €748m (£619m) takeover bid for fellow Irish operator Aer Lingus. It comes two years after a previous bid was blocked by the European Union on competition grounds.
The budget airline, which already owns 29.8% of Aer Lingus, has proposed the move in a bid to “bring one strong Irish airline group under common ownership”. This latest offer is about half of its £1bn bid two years ago.
Under the deal, Ryanair proposes to retain the separate brands but says that the group’s combined financial strength would help it compete better with British Airways, Lufthansa and Air France. It is thought that the merged company would have about 50 million passengers a year, placing it closer to the alliance between BA/Iberia, which will have 63 million.
Ryanair’s previous bid was opposed by EU regulators and Aer Lingus board because it was thought to be “ill-conceived, contradictory and anti-competitive”. It is hoped that consolidation since the last bid, such as easyJet with GB Airways, Spanish carrier ClickAir’s merger with its rival Vueling and even the proposed BA merger with Spanish carrier Iberia, will help overcome opposition.
In a statement, Ryanair says: “The world has changed dramatically over the past two years, as high oil prices and deep recession have caused a flood of airline bankruptcies, consolidations and capacity cutbacks.”
According to Ryanair, Aer Lingus, as a “small, stand alone, regional airline has been marginalised and bypassed as most other EU flag carriers consolidate”.