Ryanair unfazed by IAG-owned Aer Lingus

It may have failed in its efforts to acquire Aer Lingus, but having agreed to shed its 29.8 per cent shareholding, Ryanair must now figure out what to do with the proceeds of the sale.

Noting that Ryanair will make a “modest profit” when the airline sheds its shareholding, its chief commercial officer David O’Brien said yesterday Ryanair’s strategy had changed since it made its first bid in 2006.

“At the time, the offer made great sense because we had a plan and vision to grow it as a mid-tier airline flying into primary airports at mid-price points,” he said, adding that Ryanair is now delivering this strategy itself.

Of the competitive threat posed by an IAG-owned Aer Lingus, Mr O’Brien said that “it’s not hugely significant to Ryanair; the greater part of our growth in the next six months will be in Denmark and Germany”.

The airline said yesterday it expected the sale of its €424 million stake to go ahead in September, and it would decide what to do with the proceeds around the time of its agm, scheduled for September 24th.

Another special dividend or buyback could be on the cards, and Mr O’Brien said the airline “sees that policy continuing into the future”.

Of course the net profit for the airline is considerably smaller, at about €17 million, given that it is understood the cost of acquiring its near 30 per cent stake, which it first commenced back in 2006, came in at about €407 million.

It’s not the only outstanding bit of Aer Lingus-related business. The airline also reiterated its interest in the five pairs of landing slots at Gatwick which must be divested as part of the IAG deal. Ryanair would operate these slots from Dublin and Belfast, and Mr O’Brien said that the airline would be “happy to take this on from as early as October”.

And, while Ryanair’s thwarted deal may now be off the table, the airline said it would continue to oppose the UK competition authority’s “baseless” 2013 divestment ruling, which it says was based on the invented theory that no other airline would bid for Aer Lingus while Ryanair was a minority shareholder.

Ryanair said that this “has been hopelessly exposed” by IAG’s offer for Aer Lingus.