Ryanairs Hostile Takeover to cost Exchequer 77M euro per year.

[antagoniser]

Agreed, assuming they have no financial skeletons in their closet of course.

However, given the 2008 we have just had and the witch-hunt about to commence in the banking sector, don't you think uber-capitalists should keep their heads down for a while?

Question for all the Ryanair apologists though: Why does Michael appear so desperate to get Aer Lingus?

I'm not an uber capitalist if thats what your suggesting, its just glaringly obvious that it is in your interest as a company to minimise your tax bill. Anyhow, comparing the two figures is not comparing like with like, as another poster seems to suggest the €5.2 relates to one month, I have no interest in trawling through Ryanairs P&L to verify that. Irrespective of that, employment practices differ between Ryanair and Aer Lingus, many of Ryanair's staff are employed through a third party who would pay their income tax, whereas Aer Lingus would pay it directly.

As for Aer Lingus, thats a whole other thread. But I think it makes perfect business sense, Aer Lingus can clearly be run more efficiently, they have money in the bank, they have a brand that is distinguished from Ryanair and beloved of some Irish people and American visitors in particular, it also provides Ryanair with access to the US and an oppurtunity to grow that service, particularly in Ireland with the introduction of pre-clearance facilities in Shannon in June and Dublin the following year. Aer Lingus also provides access to major hubs from which Ryanair would hope to increase onward connections. I could keep going, but I don't want to divert the thread.

[McEavelli]

Why do you phrase it that way? I think there are plenty of business reasons Aer Lingus would be a good acquisition for Ryanair. I am certainly no apologist for Ryanair or Aer Lingus. I'm sure you'll get a few answers though from the anti-Ryanair fundamentalists though, in time.

As for capitalists keeping their head down, probably, keeping a closer eye on their businesse and ensuring they don't fail, because that would result in job losses and the communists would not like that.

The comment wasn't directed at you or any other individual, just posters in general on this thread.

However, reading the thread it certainly appears that way. There are many pro-Ryanair and one or two pro-Aer Lingus on here. The interesting thing about this site is that it appears to split along the lines of political ideology rather than the merit of any facts or reasoned debate.

There are obvious reasons why it would be an astonishingly good deal for Ryanair. But the only logically relevant question on a site called politics.ie should be whether it would be good for the State or the Irish public.

[McEavelli]

I'm not an uber capitalist if thats what your suggesting, its just glaringly obvious that it is in your interest as a company to minimise your tax bill. Anyhow, comparing the two figures is not comparing like with like, as another poster seems to suggest the €5.2 relates to one month, I have no interest in trawling through Ryanairs P&L to verify that. Irrespective of that, employment practices differ between Ryanair and Aer Lingus, many of Ryanair's staff are employed through a third party who would pay their income tax, whereas Aer Lingus would pay it directly.

As for Aer Lingus, thats a whole other thread. But I think it makes perfect business sense, Aer Lingus can clearly be run more efficiently, they have money in the bank, they have a brand that is distinguished from Ryanair and beloved of some Irish people and American visitors in particular, it also provides Ryanair with access to the US and an oppurtunity to grow that service, particularly in Ireland with the introduction of pre-clearance facilities in Shannon in June and Dublin the following year. Aer Lingus also provides access to major hubs from which Ryanair would hope to increase onward connections. I could keep going, but I don't want to divert the thread.

The uber capitalists I was referring sit on the boards of ruthless Dickensian employers and are unlikely to post on chat sites.

Why should a hostile take over be allowed so 'Aer Lingus can clearly be run more efficiently' (Aer Lingus say they will make a profit in 2008 & 2009 while Ryanair say they will break even at best)? Why should providing Ryanair access to the States be a reason for Aer Lingus to be shut down?

[antagoniser]

The comment wasn't directed at you or any other individual, just posters in general on this thread.

However, reading the thread it certainly appears that way. There are many pro-Ryanair and one or two pro-Aer Lingus on here. The interesting thing about this site is that it appears to split along the lines of political ideology rather than the merit of any facts or reasoned debate.

There are obvious reasons why it would be an astonishingly good deal for Ryanair. But the only logically relevant question on a site called politics.ie should be whether it would be good for the State or the Irish public.

I'm going to briefly take the bait on that one. I believe it is a good deal for the state for the following reasons.
The State gains full control of the Heathrow slots which it does not now have.
The State gets badly needed cash.
Aer Lingus cannot be guaranteed to survival on its own, one of three things are likely to happen, Ryanair buys Aer Lingus, some other carrier buys Aer Lingus(least likely as there aren't many who would want to or are in a position to do so), or Aer Lingus goes tits up and we buy them back and inject cash into them, benefiting the unions and nobody else. Surely the best scenario is for a successful Irish company to take over Aer Lingus?

Competition concerns are unfounded in my opinion, both companies will continue to operate independent of each other servicing for the most part different markets. The aviation industry is the most open in the EU(mainly thanks to Ryanair), if prices do rise its open for any other airline to come in and offer cheaper fares. Start another thread for further discussion on that one.

[antagoniser]

The uber capitalists I was referring sit on the boards of ruthless Dickensian employers and are unlikely to post on chat sites.

Why should a hostile take over be allowed so 'Aer Lingus can clearly be run more efficiently' (Aer Lingus say they will make a profit in 2008 & 2009 while Ryanair say they will break even at best)? Why should providing Ryanair access to the States be a reason for Aer Lingus to be shut down?

The question you asked was why does RYANAIR want Aer Lingus. Aer Lingus can say what they like, the evidence of Ryanair being more efficiently run is clearly shown in that over a short period they have become on the largest airlines in the world. If oil prices remain at thir current levels Ryanair will certainly be in the black. Start another thread if you want to talk about the takeover, it has been discussed ad nauseum already. I'm not a "Ryanair apologist" either, I actually prefer to fly Aer Lingus. For somebody who laments idealogues and entrenchment on this site, you tend to throw out stereotyping terms very readily.

[odie1kanobe]

Irrespective of that, employment practices differ between Ryanair and Aer Lingus, many of Ryanair's staff are employed through a third party who would pay their income tax, whereas Aer Lingus would pay it directly.

Since when did your employer pay your income tax ? Your employer pays your salary...thats it.

Your employer collects Income tax it on behalf of the state, nothing more.

[antagoniser]

Since when did your employer pay your income tax ? Your employer pays your salary...thats it.

Your employer collects Income tax it on behalf of the state, nothing more.

You're just being petty, unless you're self assessed your employer will generally collect or pay your income tax on your behalf. The salient point is the that since most Ryanair employees are employed indirectly their income tax is also paid or COLLECTED indirectly.

[Colada]

Laughable to read the hysterics of the likes of Odie.
I hate Ryanair?
Hardly.

I dislike the companies methods, its treatment of staff and passengers, and its bosses arrogance. In addition, I wish to see the Irish Airways remaining open to competition, and consumer choice. I am against monopolies. I also really like to see everyone paying their fair share of tax in this State, where I pay mine. Thats why I started this thread (Oppenheimer).
So, I'll leave the frenzied epithets to Odie and his pals. I consider it unhealthy to 'hate' anything much, particularly inanimate objects like airline brands.
Dislike? Yes.
Hate? Rather pointless.

And anyway, it smacks of the "Pot calling the Kettle Black" when Odie accuses me of being anti-Ryanair. Take a look in the mirror Odie....

Meanwhile, back to the issue.

Regarding the Payroll taxes on the Ryanair Annual Report 2007.
The report refers to PAYE tax paid.
Thats what's stated in black and white - 5.2M in PAYE Tax Paid, on a Payroll of 250M.

Odie declares 'tax is paid by the employee so doesn't appear in annual reports'. But as we all know, PAYE tax is deducted from employee salary by the employer - thus it is collected by the employer, passes through their hands, and is transferred to Revenue. This 'transfer' appears in the Ryanair Report as Tax Paid under PAYE.

A mere 5.2M euro was the sum total of PAYE Tax deducted and paid over by Ryanair on behalf of its employees in this State in 2007. There's no way round that fact. Its a shocking figure. A pittance.

O'Leary does not pay PAYE, so of course his tax bill does not appear on the Report! Some posters are taking the Micky. Trying to pull the wool over your eyes dear reader! Presenting the treatment of PAYE workers returns the same as multi-millionaire shareholders!
Laughable.
Mr.O'Leary's annual 'emoulement' is not treated as PAYE. Not on your nelly. Thats for 'the little people'. His earnings appear elsewhere in the Report, and his Tax return is personal and private, and not shown on the report. Yet more spin from the usual suspects.

Now, regarding this angle about Ryanairs responsibility to shareholders coming first, above its obligations to the State. I agree 100%. No argument there at all. If the State is silly enough to allow itself to be deprived of the income, then perhaps it deserves to be.

On the other hand, all those schoolkids sitting in drafty unheated classrooms, and patients on trollies, or old folks with no medical cover - they might equally be entitled to feel agrieved that The State allows these practices, and foregoes the millions in lost revenues which could build new schools and hospitals, and provide medical cover for the aged.
I also would wager that the millions of tax payers and workers who will soon fall on harder times would like to see the government do a better job of collecting these taxes from Ryanair, and keeping some of that Irish money on Irish shores, and in Irish jobs. As a taxpayer, I certainly would.

I don't expect the ideologues or Ryanair cheerleaders on this thread to agree with me. They argue that Ryanair has a perfect right to 'rip-off' this State - because it's Legal, and Greed is Good. Thats their religion.
But! I do want the other folk (especially you Politicians) reading this thread to know the truth about where our finances are going, and what will happen when/if Ryanair get control of Aer Lingus. The same accounting practices will be used to strip the State of the current Aer Lingus Tax revenues. As 'Antagoniser' has said - it is Ryanairs obligation to do that.
82 Million Euro will thus be lost to the exhequer.
It will go straight into the back pockets of the millionaire shareholders of Ryanair whom Antagoniser et al wishes to take care of, and enrich further, mainly foreign Banks and Hedge Funds - and someone will have to make up the shortfall back here in Ireland.
Guess who?

Now, just a few final points.
If we take the statements of the ideologues to their logical end, the obligation Ryanair has to enrich its shareholders (whatever the Social cost to this nation) means that the break up and assett stripping of Aer Lingus is inevitable. If Ryanair gets control of Aer Lingus it will be the right thing to do, financially speaking. Aer Lingus has Gross cash reserves of 1.3Billion euro, a fleet of aircraft worth 700M euro, and 24 LHR slots worth at least 720M euro. It also owns 99 year leases on valuable airport buildings, plus stock inventories worth appreciable sums. The total (in round figures) is perhaps 3Billion Euro. Yet Ryanair will probably buy it for around 500M euro.
It makes no sense whatever for Ryanair to continue running Aer Lingus when they can make a 600% return on investment by assett stripping it.
So much for all the job promises. The State will be left to pick up the pieces. Several thousand more ex-taxpaying workers, thrown on the dole.
Sheer madness. This would be the biggest rip-off in Irish history if it goes ahead - and we've had some biggies!

Aer Lingus is probably one of the best prepared airlines in Europe to survive the recession. Remarkably, even Ryanairs own Financial Advisors - Davys - said so in a recent report!
In fact, the airline which has problems on the horizon is - Ryanair!
Ryananair has 2.3B euro in 'cash' but the vast majority of it is committed to various obligations, including a monstrous number of aircraft due to be delivered and paid for (45 this year). The previous outlet of 'selling on' such deliveries has vanished. Ryanair is pulling off routes (several dozen so far) and parking the aircraft (17 at last count). What will they do with all these aircraft?
Meanwhile Aer Lingus has been expanding, and has 800M in NET cash reserves which are unencumbered. Ryanair has 80M free cash. Only 10% of the Aer Lingus war chest!

As Nick Mulcahy of Business Plus Magazine said - Ryanair needs Aer Lingus far more than Aer Lingus needs Ryanair. It needs Aer Lingus' cash. It needs to remove a competitor to survive, and it needs its routes to give homes to all those unwanted aircraft. If it doesn't get these things, Ryanair is in severe difficulties, very quickly.

If Ryanair succeeds, Aer Lingus will close. Irish consumers will lose choice and homegrown competition. LHR connectivity will be finished, with knock-on repercussions for business and tourism. Aer Lingus workers will be on the dole, and the State will lose the tax income, and have to keep them fed and housed. The net result will be a disaster for this country.

Dear TD. If you aren't sure what way to vote on this issue, think of it this way. Aer Lingus can survive on its own very well. It is not going bust. It will continue to provide tax income to the State, employment to Irish workers, and choice to our travelling public. Ryanairs bid is cynical and opportunistic. Get on to your people in Revenue and ask them to confirm the figures I've quoted, especially the Aer Lingus Tax contribution to State coffers. Compare that to the situation you'll have when Ryanair shut it down.
Its a no brainer.

[fionnmccool]

So why isnt Aer Lingus being run so efficiently that they can legally avoid paying so much more tax than Ryanair, hence enabling them to be more competitive or take on more employees with better conditions etc ?

[antagoniser]

Now, regarding this angle about Ryanairs responsibility to shareholders coming first, above its obligations to the State. I agree 100%. No argument there at all. If the State is silly enough to allow itself to be deprived of the income, then perhaps it deserves to be.

Surely with that post you've acknowledged that you're attacking the wrong organisation in this thread?

I don't expect the ideologues or Ryanair cheerleaders on this thread to agree with me. They argue that Ryanair has a perfect right to 'rip-off' this State - because it's Legal, and Greed is Good. Thats their religion.
But! I do want the other folk (especially you Politicians) reading this thread to know the truth about where our finances are going, and what will happen when/if Ryanair get control of Aer Lingus. The same accounting practices will be used to strip the State of the current Aer Lingus Tax revenues. As 'Antagoniser' has said - it is Ryanairs obligation to do that.
82 Million Euro will thus be lost to the exhequer.
It will go straight into the back pockets of the millionaire shareholders of Ryanair whom Antagoniser et al wishes to take care of, and enrich further, mainly foreign Banks and Hedge Funds - and someone will have to make up the shortfall back here in Ireland.
Guess who?

Generally you made a very reasonable case against a Ryanair takeover of Aer Lingus in that post. Except when you engaged in branding anybody (myself included) who uttered anything that wasn't anti-Ryanair, as idealogues or cheerleaders for Ryanair. I am neither. I opposed the original Aer Lingus flotation for example, solely out of concerns over the control of the Heathrow slots (concerns which proved to be justified).

I really have no interest in "further enriching Ryanair shareholders", I don't know where you've been for the past year or two but those shareholders havn't exactly made a killing!

Also Colada, using melodramatic statements about children in classrooms and patients on trolleys doesn't do your argument any favours, its not necessary and distracts from the good points you made.