Ryanair Launches Takeover Bid for Rival Aer Lingus

The surprise takeover bid would value the formerly state-owned carrier at 1.48 billion euros.

The proposed takeover would face regulatory hurdles in both Ireland and the European Union. Ireland's Competition Authority is obliged under law to open an investigation if Ryanair's stake in Aer Lingus grows beyond 25 percent, but the authority said Thursday it had already begun the work.

O'Leary said he expected the major decision to be taken by European competition authorities. Clearing that hurdle that shouldn't be a problem, he asserted, citing past EU verdicts permitting mergers that allowed British Airways, Air France and Lufthansa to grow on their home soil.

Aer Lingus came close to bankruptcy in 2002 because of a bloated payroll and lost business following the Sept. 11 terrorist attacks in the United States, traditionally its key profit-making destination. But under the direction of current BA chief Walsh, it managed a swift turnaround by slashing staff and moving to a low-frills model emphasizing European routes - essentially emulating Ryanair's formula.

Aer Lingus, which in Gaelic means "air fleet," was founded by the government in 1936. The airline initially offered flights only to England but now connects Ireland to more than 50 European cities; directly to the U.S. cities of Boston, Chicago, Los Angeles and New York; and to the Middle East emirate of Dubai.


On the Net:

Aer Lingus, http://www.flyaerlingus.com

Ryanair, http://www.ryanair.com

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