Thursday, October 05, 2006

Ryan Air and proposed Aer Lingus takeover

When I heard that Ryan Air is trying to take over Aer Lingus, I have to admit being a bit shocked. As someone who travel’s to Ireland usually a few times a year, I've used both airlines on a number of occasions, by having two airlines flying the route (along with BMI and Easy Jet) it does offer choice and diversity on who I choose to fly with.

Personally, I prefer Aer Lingus, Ryan Air has a pretty abysmal record as an employer in terms of employment rights and even makes staff pay for it's uniform and has a track record of being an anti-union employer. Having a relative who works for Aer Lingus, many staff I know will be deeply concerned that Michael O'Leary could be running their airline, as the whole culture of Ryan Air is so much different to Aer Lingus. In terms of customer service you get what you pay for with Ryan Air, at least Aer Lingus has some standards. In recent years Aer Lingus has modernised into a successful airline, from being on the point of bankruptcy after 911, its fortunes have revived. This meant taking tough decisions and reducing staff but they are now in a much better position to compete.

The other part that concerns me is competition, if this comes off it would have 78% of the London-Dublin market, one of the busiest routes in the world. At least at the moment Ryan Air has competition, eliminating it could effectively lead to a monopoly and ultimately higher prices, as they have no competition. The European Commission will no doubt be taking a keen interest in developments. While Aer Lingus flies to mainstream airports, Ryan Air usually flies to airports in the back of beyond, they will want to maximise their investment (and Ryan Air is a cut throat business) and they do not like flying to airports with higher charges.

Longer term if this does happen, I've no doubt that Aer Lingus will disappear as an entity within a few years and with their current growth who's to say that Ryan Air may even be targeting an airline like British Airways a few years down the line, it is not beyond the realms of possibility. The advantage is that competition in terms of airlines is quite vibrant here and long may it remain that way, in Ireland if this merger happens it will not be the case.

Aviation is changing as an industry and we are likely to see more takeovers/mergers in the next few years as competition becomes even more competitive. With it being an ever-growing industry and with tickets being pretty cheap the growth shows no sign of relenting. However mergers, which could be anti-competitive and undermine competition are not in the interest of the consumer and should be stopped.


Anonymous Anonymous said...

What's this got to do with Merton? Are you also blogging4Whelton? (Let's see whether you'll allow this to be published.)

8:27 pm  
Blogger Martin Whelton said...

Well not everything under the sun is Merton either, my thoughts are on a wide variety of issues and whatever takes my fancy. Well it whelton.blogpot along with it being blogging4Merton. In relation to Merton many people use air flights on a regular basis and many fly to Dublin as well, surely competition is a good thing??

8:31 pm  

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