The Ryanair offer for Aer Lingus – how do the two airlines’ networks at Dublin compare?

A radical, divisive figure, hated by the Irish political establishment, Micheal O'Leary's strong desire to control Aer Lingus is soberly argued in the Ryanair statement in which it offers to pay around 40% above traded share prices.

A radical, divisive figure, hated by the Irish political establishment, Micheal O'Leary's strong desire to control Aer Lingus is soberly argued in the Ryanair statement in which it offers to pay around 40% above traded share prices. The government is committed to sell its 25% to reduce the deficit, so the only third way would be the to sell to a non-Irish higher bidder, potentially Etihad.

Ryanair’s cash offer to purchase Aer Lingus appears to indicate it would keep it as a separate entity and: “will be put on a growth trajectory which will allow Aer Lingus to provide more competition and consumer choice at a number of Europe’s primary airports where currently Aer Lingus flies but where Ryanair does not wish to operate.” thought it might be useful to examine this claim.

Of the 66 European destinations that Aer Lingus serves from Dublin this summer, 22 of them already face direct (same airport) competition from Ryanair, while a further 14 face indirect (nearby airport) competition from Ryanair services, leaving 30 destinations on which the two airlines do not compete (but may compete with other carriers).

Competition City (Aer Lingus airport/Ryanair airport)
Direct (22) Alicante, Barcelona, Berlin SXF, Birmingham, Bristol, Budapest, Edinburgh, Faro, Fuerteventura, Gran Canaria, Ibiza, Krakow, Lanzarote, London LGW, Madrid, Malaga, Manchester, Nice, Palma de Mallorca, Tenerife TFS, Verona, Vilnius
Indirect (14) Brussels (BRU/CRL), Frankfurt (FRA/HHN), Glasgow (GLA/PIK), London Heathrow (LHR/LGW & STN), London Southend (SEN/STN), Milan Linate (LIN/BGY), Milan Malpensa (MXP/BGY), Munich (MUC/FMM), Paris (CDG/BVA), Rome (FCO/CIA), Stockholm (ARN/NYO), Venice (VCE/TSF), Vienna (VIE/BTS), Warsaw (WAW/WMI)
None (30) Aberdeen, Amsterdam, Athens, Bilbao*, Blackpool, Bologna*, Bordeaux*, Bourgas, Bournemouth*, Bucharest, Cardiff, Catania, Dubrovnik, Düsseldorf, Geneva, Hamburg, Helsinki, Izmir, Jersey, Lisbon, Lyon, Marseille*, Naples, Perpignan*, Prague, Rennes, Santiago de Compostela*, Stuttgart, Toulouse, Zurich
Source: OAG Max Online for w/c 6 August 2012
* Airports served by Ryanair from airports other than Dublin

Of the 30 destinations where Aer Lingus does not compete with Ryanair, either directly or indirectly, it is worth noting that there are seven airports served by Ryanair from airports other than Dublin.

Ryanair competes on 73% of Aer Lingus’ weekly seats to Europe from Dublin

Looking at the data in a slightly different way, Ryanair competes directly with Aer Lingus on 36% of its weekly European seat capacity from Dublin, and competes indirectly with Aer Lingus (to a nearby airport) on a further 37% of its weekly seat capacity from Dublin, leaving 30 routes on which the two airlines do not compete at all; just 27% of Aer Lingus’ weekly seats from Dublin this summer.

If Ryanair’s bid is successful, the following network-related questions would arise:

  1. On how many of the 22 routes from Dublin where the two airlines compete directly would one or other of the airlines withdraw from the route?
  2. If Aer Lingus is to grow, would that be primarily at Dublin, or at other Irish or European airports? (Those “primary airports where currently Aer Lingus flies but where Ryanair does not wish to operate?”)
  3. If growth is at Dublin, would this be by increasing capacity on existing routes, or starting new routes?
  4. What would happen to Aer Lingus’ operations at Belfast, Cork and Shannon?

A quick analysis of Europe’s busiest airports in 2011 reveals that neither Aer Lingus nor Ryanair serve the following major cities from Dublin (with airports with more than 5 million passengers in 2011): Istanbul, Moscow, Antalya, Copenhagen, Cologne/Bonn, St Petersburg, Ankara, Kiev, Bergen, Larnaca, Hannover and Basel.


  1. Paul Le Blond says:

    What about Aer Lingus’ US services? How important are they in terms of revenue/profit? How would they operate as part of Ryanair?

  2. Liam says:

    If they dont drop any of Aer Lingus’s current routes and add routes to new major European airports (Ex Istanbul Ataturk, Moscow Sheremetyevo, Copenhagen, Cologne, Sofia, Kiev, St Petersburg etc) this could be a good thing for Aer Lingus

  3. martin says:

    It seems like Ryanair are looking at a quick exit strategy away from its share holding in Aer Lingus. Aer Lingus regional operate flights from Waterford / Cork / Shannon / Kerry / to UK airports inc Luton and France that is not mentioned? Ryanair and Aer Lingus operate from opposite Belfast Airports that is not mentioned? LGW Ryanair and Aer Lingus operate from different terminals? That is not mentioned. If Ryanair were allowed control of Aer Lingus they are totally different business models. Its bad for the consumer even in recession times. The very Airports served by Aer Lingus are centralised and have interline passengers to virtually ever major carrier, however Ryanair have point to point on Ryanair services only. It would be impossible to purchase an interline ticket ex Ireland? So Ryanair will charge for every Kilo and bag ex Ireland and the consumer suffers because there is no competition? European mergers in recent times were conducted through the E.U. and all the carriers involved entered into the merger voluntarily. Ryanair’s bid for Aer Lingus is a hostile takeover bid. Ryanair’s,Aer Lingus cash offer is for the remaining percentage of Aer Lingus that O’Leary does not own, so money spent to date is approx 400m and a further 750+m offer for a company with a 1bn cash reserve and 800m of assets. Ireland is an island and as such relies heavily on Air navigation, O’Leary will hold an island to ransom on the lucrative routes into and out of Ireland. Bad for consumer and certainly no competition! There is no cohesive or symbiotic reason for one Irish carrier to purchase another, the stats do not add up. However there is reasoning in taking over you major competitor! All of the recent mergers in europe involve one “Flag” carrier merging with another, different national airlines merging into one umbrella group retaining its own identity. This cannot be said of the Ryanair bid.

  4. Mark says:

    Another interesting note is the proposed move from Belfast International to Belfast City by Aer Lingus. Interesting in the sense that Aer Lingus is clearly about to work much more closely with IAG given that they will likely just undertake all the Belfast City – Heathrow flights instead of BA continuing the previous BMI flights… and one wonders will the same happen with the Dublin – Heathrow flights aswell?

  5. Laszlo says:

    Finally MOL could make his dream come through and could enter in the long-haul business to the US and CAN:

    -opening a long haul base in SNN
    -feeding US & CAN EI flights from all Europe by FR and EI likewise AirAsia was feeded from FR in STN
    -could give a hard time to BA, LH and AFKL high cost & high fare, fuel surcharging, state subsidised loss making flag carriers

    PS: Go for it Michael !!!

    • martin says:

      State subsidised Airlines? Ryanair get local government aide in nearly every airport they fly into? That’s state aide!!! Fly to the USA or Canada not a chance, if it could be done the American low cost carriers would have done it by now. Common sense Laszlo!

  6. Alan Bowen says:

    Many think this is just a strategy to push the price of Aer Lingus shares up, which it has done, in case the OFT force Ryanair to sell all or part of its existing shares. Whether Ryanair actually see advantages in taking over a business with an entirely different business plan, different aircraft and a whole different ethos is far more difficult to establish. As Air Asia X and many before it have shown, low cost simply doesn’t work on long haul routes, you can’t sell scratch cards for 8 hours!

  7. Patrick says:

    The Ryanair takeover is not going to happen.

    Simple way to look at it: Ryanair is offering €1.30. If the markets thought the deal was going to be done, the Aer Lingus share price would have climbed to near €1.30. In fact, what did it do since the bid was announced? It jumped from about €0.94 to about €1.05. In other words, some speculation that *a* deal might be done (Etihad/Turkish/Air Koryo/whoever), just not *this* deal.

    Second piece of evidence that the deal will not be done: the reasoning in the original EC rejection of the deal. One of the key elements of the EC analysis was the domination which a combined EI/FR would exert at Dublin. EI and FR together account for something like 84% of capacity at DUB this summer – that’s actually higher than at the time of the last takeover bid. No route-by-route remedy would solve that overall market dominance.

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