Ryanair target Aer Lingus in failed hostile takeover

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5 October 2006

Ryanair target Aer Lingus in failed hostile takeover

Ryanair has made a hostile takeover bid for Aer Lingus in which it already holds a minimum 16% stake. Since Aer Lingus’s recent privatisation, the company has become vulnerable to predators. Irish trade unions SIPTU and IMPACT have both issued press statements against the takeover. In its statement, IMPACT, which represents both Aer Lingus and Ryanair employees, stated that Ryanair should be opposed in its ownership bid as it “has a well-known history of hostility to its staff and shabby treatment of its customers, which is unacceptable.”

So is Ryanair making a bid to takeover a company it successfully undermined to such an extent that Aer Lingus had to re-invent itself as a low cost company? If so, it will gain some very lucrative routes and slots in Heathrow and finally take out one of Ryanair’s main competitors. All of which sounds like a potential recipe for market dominance. As SIPTU stated in response to the news, if Ryanair are successful in their takeover bid, they will be able to “dictate whatever price they like to airports with obvious long term adverse consequences for workers and the travelling public alike”.

Of course the company could also be playing a clever game. As one Union official put it, by taking a significant shareholding in the company it may be trying to divert Aer Lingus management as it has just launched a substantial investment and expansion programme, which if effectively implemented, could have a detrimental impact on Ryanair.

So what’s in it for Ryanair and Aer Lingus employees? Well likely not a lot.

As an IMPACT official summed up “Ryanair's record speaks for itself. Their business model is based on low pay, minimum staff protections and union-busting. If they gain control of the company they will attempt to drive down pay and working conditions for Aer Lingus staff. There's certainly no prospect of Ryanair staff getting improved pay and working conditions to match those currently available in Aer Lingus."

UPDATE: The Aer Lingus Board has now rejected the offer made by Ryanair but this process may not be over. We shall monitor developments and keep you posted.

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