Aer Lingus Share Discussion Threads

[lbo] 24/7/2009 10:08

Aer Lingus - Significant Downgrade



• We are sharply cutting our 2009 EBIT loss forecast for Aer Lingus from -€130m to -€152m, making it 37% worse that Bloomberg consensus forecasts. Key points; (1) The Irish economy, on which Aer Lingus depends for about 90% of traffic, remains exceptionally weak. Sharp declines in consumer spending (-7.5% in '09) and the prospect of further expenditure cuts and tax increases make us wary about air travel demand. In addition, the introduction of an air passenger departure tax of €10 per passenger from spring 2009 will have a detrimental impact on demand in winter 09/10; (2) we expect Aer Lingus will fight against intense competition to sustain load factors by sharply cutting fares. As a result, yields on short-haul could fall 15% alongside a 20% drop in long-haul yields; (2) Aer Lingus, like all airlines, is capital intensive so it is sensitive to unit revenues changes. This is central to our more pessimistic forecast. Not only will the airline be EBIT negative but EBITDAR will be in the red too. That implies further cash outflows.

[lbo] 17/7/2009 18:26

Six companies controlled by one of the country's biggest property developers, Liam Carroll, have told the High Court of their intention to apply to go into examinership.

[lbo] 16/7/2009 12:22

Spend on foreign hols plunges 28pc in Q1

[hermana] 14/7/2009 13:36

LBO,will "mini me" be next CEO. Ryanair castoff would be the latest fall for Ear Fungus...

[lbo] 14/7/2009 13:18

Visitors to Ireland fall 18pc in May

[lbo] 19/6/2009 11:47

Figures from the Central Statistics Office show that the number fo trips made by Irish people abroad in the first quarter of this year was down 13% on the same period last year.

[lbo] 18/6/2009 11:14

Airline sector takes a nosedive as loss predictions double to $9bn

[lbo] 12/6/2009 16:40

Aer Lingus Cuts Winter Long-Haul Capacity By 25%

"Aer Lingus yields have been declining in exceptionally poor market conditions," the company said in a statement. "Long-haul average fares fell by 19% in the first quarter of 2009 reflecting weak economic conditions and consumer confidence on both sides of the Atlantic."

[lbo] 10/6/2009 20:12

Trips abroad down over 10% so far this year

[lbo] 25/5/2009 20:24

Shares in Aer Lingus fell by 3c to E0.68 while Ryanair was up 1c to E3.31. Oil prices could spike to beyond the near USD150 record high of 2008 within two to three years unless the industry invests in new projects to expand capacity, Saudi Arabian Oil Minister Ali al-Naimi said on Monday. The influential minister of the world's top oil exporter said the industry faced "faltering demand and significantly lower prices" but that the market reflected the global economic downturn rather than being an indicator of things to come. "We are maintaining our long-term focus rather than being swayed by the volatility of short-term conditions," he said in prepared remarks to the G8 energy summit in Rome.

[lbo] 24/5/2009 14:39

Stand by for the new rights issue stampede



Also rapidly burning through its cash pile is Aer Lingus. At the end of last year its cash reserves had shrunk to just €650m with many analysts now expecting that it could shrivel to just €325m by the end of this year. A rights issue would buy time for the new chief executive to sort out the problems at the airline and would have the added bonus of stuffing rival Ryanair.

An Aer Lingus rights issue at even the current share price would oblige Ryanair, not just to crystalise a €340m loss on its existing 29.8 per cent Aer Lingus shareholding, but also force it to throw good money after bad to prevent its stake from being massively diluted

[bmw30csl] 22/5/2009 10:06

Dara Colleary says they should be reserved for airports along Ireland's west coast to guarantee that the region has access to Heathrow.

Haha is Luton or Stansted not good enough for them!

[lbo] 22/5/2009 10:03

The privatisation process was botched. The Minister stated in the Dáil that the 25.4% shareholding mentioned in the articles and memorandum of association were enough to ensure that the airline's slots, including those in Shannon, would be protected. If that is the case, why is the Government not using that shareholding to intervene? What is the point otherwise in keeping the stake?

strategic advantage of a 25% shareholding is that it enables the Government to protect the memorandum and articles of association of the company. This ability to block special resolutions to change the articles provides a safeguard against any disposal of Heathrow slots. The senior officials group report states that disposal of slots relates specifically to the sale of slots and the transfer of slots between airlines and does not apply to the reallocation of slot pairs to new or existing bases.

[lbo] 22/5/2009 10:00

The problem with the Privatization of Aer Lingus



After the debacle of Eircom you would think that the government would have realized the problem with privatization. Much of the flack over the privatisation of Eircom center on the fact that it failed. This was attributed to the fact that it was privatised not to the actually factors that made it fail. The reason it failed was because they didn't follow Mary Harney's mantra. "If there is anything worse then a public monopoly it is a private monopoly". Whether she heard her own advice we will never know.

The problem arises from the fact that Eircom have a monopoly on the lines. They can do what ever they like with the infrastructure as they have no competition in this area. Hence they can use this position to control the rest of the market.

The same goes with Aer Lingus. The problem is that Aer Lingus had a monopoly on the slots in Heatrow. These slots were deemed necessary for our countries good and should have been kept by the government in a holding company

[lbo] 22/5/2009 09:57

Govt urged to buy up Aer Lingus slots at Heathrow

[lbo] 22/5/2009 09:55

AER LINGUS is trying to do a bit of horse trading to gain an extra slot at Heathrow Airport that would allow it to boost its Shannon service to three flights a day. The Irish airline is already the third biggest holder of slots at Heathrow.

Chairman Colm Barrington told me this week that the load factors on Shannon-Heathrow are "okay" and it is keen to tweak the schedule. "Our timings aren't great and so we are trying to arrange a better schedule," he said. "It is possible we might get another slot at Heathrow and we could go three times a day at Shannon."

Aer Lingus recently traded a slot at Heathrow with British Airways for slots in Gatwick, which were used for the launch of its new base at the London airport. "The trading of slots goes on all the time."

[bmw30csl] 22/5/2009 09:19

Do you not think the stargeic importance of slots is archaic? It will not hinder trade between the nations especially in an environment where less travel is required and carbon footprint becomes more important.

If i want to see my business contact in London I can get on RYA and vice versa. And if AERL dissapeared in the morning once there is demand for people to fly from LHR to DUB then an airline will provide the service.

I know what a mess Ireland is in.

[lbo] 22/5/2009 09:00

Bmw the Irish economy is in a mess and with the UK being a major trade partner the slots are now even more a strategic asset to Ireland so its a lot more then just wanting a "say in them going foward"!



the Irish Exporters Association (IEA) show that Britain has reclaimed its place as the biggest single market for Irish exports, having overtaken the United States, which had moved into the number one spot in recent years.

Exports of merchandise to Britain grew by 6 per cent during 2007, from €15.5 billion to €16.3 billion. Britain now accounts for 18 per cent of all merchandise exports from Ireland.

[bmw30csl] 22/5/2009 08:28

the only upside here is general bull market and beta or someone takes them out. Who would bother with the aggro of o'leary that would involve?? Net Debt looms in 2011 with the 4 new long haul airplanes.

Anyone able to construct a bull case?

[bmw30csl] 22/5/2009 08:12

thats what they said - in reality they know its the biggest asset of AERL and wanted a say in them going forward specifically.

[lbo] 22/5/2009 07:38

BA loses £400m as demand slumps

[lbo] 22/5/2009 07:34

The stake was kept to for strategic access! Also was one of the main worries if Aer lingus sold to Ryanair!



Government will be given control over London Heathrow slots. Ryanair propose that the Articles of Association of Aer Lingus will be amended upon completion of the Offer to provide the Irish Government and Minister for Transport with a legally binding guarantee that will ensure Aer Lingus' Heathrow slots cannot be sold, transferred, leased or switched by Aer Lingus to any other airline or to any other route without the prior written approval of the Irish Minister for Transport. This legally binding guarantee will protect Ireland's connectivity to Heathrow and the world.

[bmw30csl] 21/5/2009 12:14

i dont think strategic access is the reason they kept the stake and needs must - who would be a potential suitor for AERL?

[lbo] 18/5/2009 11:51

Sadly assets do not have much value when you burn cash and burn a hole in the value of them ending up with net debt not net cash! At its current rate of cash burn the airline could run out of cash by the end of 2010. The brand has no value anymore IMHO. The planes are also worthless now and its well know planes are being parked in the deserts around the world as the can no longer be sold.

Airplane Graveyard: Home of the Grounded Planes


As Cash-Strapped Airlines Cut Schedules Thanks to the Recession, Planes Go to the Desert

The slots do have a value but can't be sold unless the Government (who hold 25% of the shares) want to loose important strategic Irish access to the UK which is the exact reason why they kept the stake in the first place. Aer lingus is another failed Irish privitisation of state assets that probably in the end needs to be in the states hands and full control cannot be surrendered to the markets so you end up in a worthless public private partnership limbo. Ireland could see another Eircom about to happen but the problem is it can't afford to keep it either.

[bmw30csl] 18/5/2009 00:56

No Fisons - the only thing in common with O'Leary is we both went to the same great higher education institution.

AERL is going through its cash - can't get down to the same operating efficiency as ryanair and is more Ireland centric. Not a great position going into the next year which will probably see oil at historically high levels.

That said the brand/slots/aircraft have a value - what is it per share I wonder?