Opposition to Ryanair bid 'naive'

Aer Lingus is "naive" and not behaving like a real plc in its opposition to Ryanair's €1.4 billion takeover bid, the former chief executive of CityJet Pat Byrne claimed yesterday.

Mr Byrne said while some people might not like Michael O'Leary, an alliance between two carriers could benefit the country and the opposition of Aer Lingus was hypocritical.

"The really big crux here for Aer Lingus is that it is not behaving like a real plc. It has taken the king's ransom from the market but it will not, because it cannot, act in the best interests of its shareholders because the shareholders do not all share a common objective," he said.

He was speaking at a conference organised by the Irish Travel Agents' Association in Dublin. Mr Byrne used to compete against Ryanair and Aer Lingus in the 1990s when he set up CityJet. It is now owned by Air France.

Mr Byrne said "a lot of rubbish" had been talked about Aer Lingus and Ryanair. Of Ryanair, Mr Byrne said: "They beat up on airport operators all over Europe and extract really low-cost deals. They bully suppliers and brainwash the market with their low-fares mantra. You don't have to like their style, I don't. But you can't deny their effectiveness."

Mr Byrne said one big Irish airline was a good idea - Ryanair could help to convert some of the options it has on Boeing aircraft and transfer them to Aer Lingus. Either way he claimed, the two airlines were a good fit.

"This would be good for Aer Lingus and all its stakeholders, provided they embrace the prospect and recognise the opportunity. To cower and hope the threat will go away is not a realistic option. To think it can compete one on one against the best low-cost model in the world is naive," commented Mr Byrne.

He said once personalities were removed from the argument, the real issue was European aviation. "This is about how to compete on a European level. BA are getting out of point to point. Air France/KLM and Lufthansa outsource hub feed to lower-cost subsidiaries and code share partners who have better economic operating models. Dublin could become a serious hub. So too could Stansted for one big Irish airline. Why continue to support the BA hub at Heathrow," he asked.

He said Ryanair's future was more secure than Aer Lingus's. "The Ryanair model is going to endure and has the power to grow vigorously. Aer Lingus should put itself above the petty sectional position of stakeholders and work on dissipating the paranoia that is being peddled about the threat to the national airline. The game is much bigger out there and the one big airline from Ireland could pack an even bigger punch than Ryanair already does and that is way above our nation's weight."