Will Aer Lingus and Ryanair merge?
After Aer Lingus today announced quadrupled losses of £65 million there are fears within the company that Ryanair, which has made a number of unsuccessful takeover bids in the past, is hovering yet again with an offer for shareholders. Only eight months ago Aer Lingus shareholders were given hope for the future in a bid to fend off the last Ryanair offer which ultimately collapsed when shareholders failed to support it. However, Michael O'Leary, the chief executive of Ryanair, has today questioned why such buoyant hopes and forecast were released when he last made a play for the company.
Like so many airlines in the world today, Aer Lingus has been hit by increased competition as airlines continue to fight for a slice of a smaller market. Ticket prices fell by 17% which saw revenues fall by 12.2% bringing about one of the worst set of results in the company's history. The volatility in the oil price is also causing concern within the industry and while there have been signs of an economic recovery in the company's main trading markets, it would appear that the recovery stage may be more prolonged than people had first anticipated.
So will Ryanair make a fresh offer? Can Ryanair afford to make an offer?
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