Ryanair shareholders approve Boeing aircraft purchase

Wednesday 19 June 2013 09.24
Michael O'Leary described Aer Lingus as a goldfish and a "pension deficit with wings on it".
Michael O'Leary described Aer Lingus as a goldfish and a "pension deficit with wings on it".

Ryanair shareholders have approved at $15 billion deal to purchase 175 Boeing aircraft in what its chief executive described as the biggest ever capital purchase by an Irish company.

Michael O'Leary said the purchase would have significant rewards for shareholders.

He said bigger aircraft and lower costs per seats will result in increased shareholder returns.

He said the purchase is needed to continue to grow what's already one of the world's largest international airlines. He said Ryanair is looking at another 200 routes in Europe.

He said the deal will allow Ryanair to create another 3,500 jobs with these aricraft over the next five years.

See how Ryanair shares are performing in Dublin trade.

Mr O'Leary said that generally shareholders are happy with the Ryanair strategy and equally perplexed at the "bizarre" ruling coming out of the UK Competition Commission in relation to its shareholding in Aer Lingus.

"These are two airlines that aren't even UK airlines, but you should never underestimate the incompetence of bureaucrats," he said, speaking to reporters at the company's EGM to approve the deal.

He added: "Bear in mind your friends in Aer Lingus don't have an order for any aircraft."

Mr O'Leary said Aer Lingus shareholders are very upset when they read today that it spent €40m trying to defend Ryanair's first offer which saw its share price hit €3.20 share offer, while the Aer Lingus shares sit today at €1.50-€1.60.

"Yet again Aer Lingus demonstrates its unmatched ability to destroy share value," he said.

Michael O'Leary described Aer Lingus as a goldfish and a "pension deficit with wings on it".

He said if the UK competition authorities rule that Ryanair has to reduce its near 30% stake in Aer Lingus it will appeal the ruling. He said: "Equally if they come out with a ruling that Ryanair doesn't have to sell Aer Lingus will appeal, so one way or another we are both heading for the courts, yet again, in a further waste of Aer Lingus shareholder funds."

Aer Lingus' share price performance is "lamentable" he said. "You're talking about goldfish here. Aer Lingus is a tiny peripheral airline."

Current trading is "fine", despite a "blip" last week caused by the "crazy strike" by French air traffic controllers which cost a "couple of million quid". He said it again highlights the abject failure of the European authorities on behalf of air passengers. He said: "You have the Parliament and the Commission sitting there waffling on about passenger rights and doing things for passengers, when the one useful thing they could do is remove the right to strike from about 10,000 air traffic controllers."

Figures released yesterday by the International Air Transport Association IATA showed Ryanair carried almost 80 million international passengers last year, nearly 30 million more than any other airline. Lufthansa carried 50.8 million international passengers, making it the second busiest airline, while easyJet flew 44.6 million passengers overseas, and British Airways 31.3 million. The busiest carrier in terms of both domestic and international journeys was the US airline Delta. It flew a total of 116.7 million passengers in 2012.

He said the airline would not be involved in cross-Atlantic travel until the backlog of long-haul aircraft is resolved and there's an availability of long-haul craft, and that won't be for another three or four or five years.

Mr O'Leary added: "We have a senior team in Ryanair working with a senior team in Boing about further purchases, and they are meeting at the Paris air-show tomorrow."