Ryanair says rival needs a big shake up
BUDGET carrier Ryanair is willing to “invest more money” into Aer Lingus, but is unlikely to make a third bid for its rival, chief executive Michael O’Leary said yesterday.
The flamboyant boss, whose company is a 29 per cent shareholder in Aer Lingus, said the Irish airline will need major reorganisation.
“They will come to the existing shareholders. And that would be the government, the trade unions and Ryanair, presumably, to raise some more money,” he said, speaking at Ryanair’s annual meeting.
O’Leary added that his carrier had kept its forecast for full-year net profit towards the bottom of a €200m (£183m) to €300m range, around double last year’s profit.
He is also considering breaking with tradition and paying out some of the airline’s €2.5bn cash pile to its shareholders in a one-off dividend, he said, as the carrier, renowned for its bargain basement flights, expects a strong rise in profits this year.
But Ryanair, Europe’s largest budget carrier, downplayed a move towards long-haul flights.
O’Leary said the airline was at least three or four years away from launching an associated long-haul airline because of the lack of affordable aircraft.
“While the market or orders for short-haul aircraft has collapsed for both Boeing and Airbus the long-haul order book has held up,” O’Leary said.
Ryanair is still producing earnings growth, unlike rivals such as British Airways and Air France-KLM, but it has been forced to slash fares to fill planes as a global recession crimps consumer demand.
Aer Lingus has rejected two takeover bids from Ryanair.