Ryanair Responds to Aer Lingus’
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Ryanair
Ryanair, Europe’s largest low fares airline today (22 May) responded to the latest false claims issued by Aer Lingus to the Irish press last evening. Aer Lingus made the following false claims
Aer Lingus successfully competes every day against Ryanair. Ryanair does not believe that an airline which lost over EUr107m in 2008, has predicted significantly increased losses in 2009, has suffered a 7% decline in short-haul traffic and a 14% decline in long-haul traffic in the first quarter of the year, could possibly describe itself as “successfully” competing with anybody. Aer Lingus continues to lose money, traffic, routes and Chief Executives.
Aer Lingus said its Chairman and Non Executive Directors fees are reasonable. Ryanair believes that Aer Lingus’ Non Executive Directors fees (which in 2008 were EUR45,000 for 9 Board meetings, equating to EUR5,000 per Board meeting) are excessive and that the Chairman and Board of Aer Lingus should set an example by reducing their fees to the level they were set at just two years previously, in 2006.
Aer Lingus’ claimed that its Directors fees are on average 24% lower than 14 of the top ISEC companies. Ryanair believes this claim is irrelevant, when Aer Lingus isn’t one of the 14 top ISEC companies. The average market cap of Ireland’s top 14 plc’s is some EUR2.4bn, seven time greater than Aer Lingus’ market cap of just over EUR300m. This average would suggest that Aer Lingus’ Non Executive Directors fees should be 80% lower than the 14 top ISEC companies and not the 24% Aer Lingus claims.
Ryanair’s Stephen McNamara announced“The recently announced 20% voluntary cut in fees by Aer Lingus’ Directors is just tokenism, when these fees have almost tripled over the past two years from EUR17,500 in 2006 to EUR45,000 in 2008 in the case of its Non Exec Directors and from EUR35,000 to over EUR200,000 in the case of its Non Exec Chairman.
“Ryanair looks forward to these bloated fees being discussed by shareholders at Aer Lingus’ 5 June AGM. Like all other Aer Lingus shareholders we are anxious that the recent further collapse in Aer Lingus’ share price be reversed, which might restore some of the EUR1billion shareholder value lost over the past two years. We hope that the Chairman and Board of Aer Lingus will lead this recovery at the AGM by accepting these reasonable and proportionate cuts in what we believe are excessive Non Executive fees for a company whose market cap has now fallen to just over EUR300m.
“Ryanair will continue to actively support any measures taken by Aer Lingus to reduce its costs, lower its fares and reverse the calamitous recent declines in its short and long-haul traffic. We want to see Aer Lingus restored to profitability from the enormous losses announced in 2008 and forecast again in 2009”.
(c) Centre for Asia Pacific Aviation. Date posted: 25-May-09
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Ryanair Responds to Aer Lingus’ 
