RYANAIR - AER LINGUS CLOSURE OF SHANNON-HEATHROW ROUTE

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Ryanair News--------------------------------------------------------------------------------

News Release
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07.08.07
RYANAIR STATEMENT ON AER LINGUS CLOSURE OF SHANNON-HEATHROW ROUTE

Ryanair which currently owns 25% of Aer Lingus, has today (Tuesday, 7th August 2007) written to An Taoiseach, Bertie Ahern TD offering to work with the Government and other shareholders to request Aer Lingus to maintain its Shannon-Heathrow services which the Minister for Transport said in October 2006 “serves the unique role in ensuring connectivity to/from Ireland”.

In response to Aer Lingus’s statement today, Ryanair said that:

Closing the Shannon-Heathrow route demonstrated that the Minister for Transport and the Irish Government had lied in their public statements during the Ryanair takeover of Aer Lingus last October. Ryanair pointed to the then Minister for Transport’s statement (2 October 2006) in which he said:

“Heathrow Airport, London serves a unique role in ensuring connectivity to/from Ireland. This connectivity is fundamental both to provide connections to/from Dublin, as well as to/from the regions.”

“The Minister for Transport considers that 4 London-Heathrow slot pairs for services to/from Shannon would be critical to ensuring connectivity to these airports, because this is the minimum necessary to ensure a spread of flights throughout the day.”

“On this basis, the Minister…is unlikely to support a proposed disposal of any slot pair, such that there would be less than the existing London-Heathrow slot pairs that relate to services between London Heathrow and Cork or Shannon.”

Ryanair has written today to An Taoiseach, Bertie Ahern offering to work with the Government to ensure that Aer Lingus maintains its Shannon-Heathrow service. Given that the Irish Government owns 25.3% of Aer Lingus and Ryanair owns 25% of Aer Lingus, Ryanair believes that the Board of Aer Lingus would find it difficult to refuse a joint request from Ryanair and the Irish Government to maintain the “critical” connectivity between Shannon and Heathrow. If Bertie Ahern accepts Ryanair’s offer, then the current Aer Lingus connectivity between Shannon and Heathrow can be maintained and indeed enhanced.

Speaking today, Ryanair’s Chief Executive, Michael O’Leary said:

“It is clear from the statements above that the Government lied last October to both the people of Shannon, as well as the European Commission. The then Minister for Transport assured the Irish people that the Government would not allow a privatised Aer Lingus to reduce its current operations between Shannon and Heathrow. As usual this Government’s promises are worthless.

“I believe this Government also lied to the European Commission when – in opposing Ryanair’s offer for Aer Lingus – it claimed that the preservation of services from Shannon to Heathrow by Aer Lingus was vital for Irish consumers. It is clear that the Government had no interest in consumers at Shannon. Clearly the Irish Government lied to the European Commission, as well as to the people of Shannon.

“If the Irish Government wants to preserve connections between Shannon and Heathrow, then Ryanair’s offer will allow this to come about. If the Government fails to take up Ryanair’s offer, then it will be evidence yet again that this Government’s word is worthless. Aer Lingus’s Shannon slots get transferred today. What’s to stop Aer Lingus transferring their Cork slots tomorrow? What’s to prevent Aer Lingus’s Dublin slots being transferred in time to major U.S. airlines?

“In the last three months both Aer Lingus and the Irish Government assured the European Commission that an independent Aer Lingus was the only way to maintain competition and choice between Aer Lingus and Ryanair. Today’s sacrifice of Shannon in favour of Belfast reduces that competition and proves that both Aer Lingus and the Irish Government lied to the European Commission. Had Ryanair’s offer for Aer Lingus been successful, Shannon today would continue to enjoy four daily flights to Heathrow, as Ryanair’s offer committed it to maintaining Aer Lingus’s Heathrow slots.

“We look forward to an early and positive reply from Bertie Ahern, who can now save these Shannon services by taking up Ryanair’s offer. Sadly on its own Ryanair cannot prevent this closure at Shannon because with just 25% ownership, we do not have any power or influence over Aer Lingus”.

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Ryanair News
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News Release
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14.08.07
RYANAIR RESPONDS TO AER LINGUS CLOSURE OF SHANNON–HEATHROW ROUTE


:THREE NEW LONDON FLIGHTS TO DELIVER 330,000 PAX P.A.

:REQUESTS AER LINGUS EGM TO RESTORE SHANNON-HEATHROW SERVICES

:OFFERS TO WITHDRAW EXTRA LONDON FLIGHTS IF AER LINGUS STAYS

Ryanair, Ireland’s largest airline, held a press conference in Shannon Airport this morning (Tuesday 14 August) to announce that if Aer Lingus proceeds with its plan to close the Shannon-Heathrow route and abandon 330,000 passengers who currently use it, then Ryanair will provide 3 additional daily flights to London to ensure Shannon Airport’s capacity and traffic does not fall as a result of this Aer Lingus closure.

The new flights include: - A fourth daily flight to London Stansted.
- A second daily flight to London Gatwick.
- A daily flight to London Luton.

Ryanair’s London services will increase from 4 to 7 flights daily, providing Shannon passengers with daily connections to 3 London airports including Gatwick and Stansted, which offer more destinations and connections to Europe than London Heathrow does presently.

SHANNON – LONDON ROUTE

Destination - Departure - Arrival

Stansted
06.35
08.00

Stansted
10.35
12.00 (new)

Luton
12.25
13.40 (new)

Gatwick
13.05
14.30

Stansted
16.20
17.45

Gatwick
19.50
21.15 (new)

Stansted
20.00
21.20

Ryanair also announced that it had written yesterday to Aer Lingus requesting that an EGM of Aer Lingus be called, to allow Aer Lingus shareholders the opportunity to exercise their statutory right to consider requesting the Board and Management of Aer Lingus to reverse the Shannon closure decision and maintain Aer Lingus’s 4 daily flights between Shannon and Heathrow. Aer Lingus have confirmed that its Shannon-Heathrow route is profitable and Ryanair believes that by reducing its costs in Shannon Aer Lingus’s profits can be further increased in the interests of all Aer Lingus shareholders.

Ryanair has in its letter suggested that Aer Lingus consider using the recently announced 4 daily Dublin-Gatwick flights as a suitable alternative for its new Belfast base. This would allow Aer Lingus to operate Aldergrove Belfast – London Gatwick 4 times daily, while retaining Shannon-Heathrow 4 times daily services. Alternatively Aer Lingus could operate 4 daily flights from Belfast to Heathrow using 2 of Aer Lingus’s existing Heathrow slots which are currently used for flights to Dublin and Cork, as well as the 2 Heathrow slots which are leased out to other airlines.

Ryanair confirmed that – if so requested by the Government – it would be willing to vote its 25% shareholding in favour of the motion to retain Aer Lingus’s existing profitable Shannon-Heathrow services. Alternatively the Government could ask Ryanair to abstain from voting, which would give the Government and the ESOT a majority at the EGM and allow them to save Shannon’s Heathrow services. On its own, Ryanair’s 25% stake will be insufficient to influence this decision. The trade unions, who between them own almost 20% of Aer Lingus, have already indicated that they would vote in favour of retaining Aer Lingus’s Shannon-Heathrow services. Therefore all that is needed to save Aer Lingus’s current Shannon-Heathrow services is for Bertie Ahern’s Government (acting as a 25% shareholder) to lift a finger and vote in favour of the motion at the EGM.

Speaking today in Shannon, Ryanair’s, Michael O’Leary said:

“As Shannon’s largest airline, Ryanair is determined to ensure that Shannon and the Mid-West region will suffer no loss of traffic or flights as a result of Aer Lingus’s decision to abandon Shannon in favour of Belfast. These 3 new Shannon-London flights which will connect Shannon to Stansted, Gatwick and Luton, will replace Aer Lingus’s existing Heathrow capacity and will ensure that an additional 330,000 passengers annually will travel between Shannon and London should Aer Lingus proceed to abandon Shannon. If Aer Lingus cancels its Shannon-Heathrow flights, then it is inevitable that the Shannon transatlantic flights will also transfer to Belfast Aldergrove in the not too distant future. The Government and Aer Lingus’s determination to invest in Belfast should not come at Shannon’s expense. We believe that our proposals will enable Aer Lingus’s Shannon-Heathrow services to continue, while also allowing Aer Lingus to serve Belfast-London 4 times daily.

“Aer Lingus’s rules confirm that any 10% shareholder can ask for an EGM to be called. It is surprising that neither the Government nor the trade unions, both of whom own over 10% have taken up Ryanair’s previous offer to work together or called for an EGM to be held. Accordingly and in the interests of retaining a profitable route for the benefit of all Aer Lingus shareholders, Ryanair has asked Aer Lingus to call an EGM and we will be asking the trade unions and Bertie Ahern’s Government to support this motion calling for Shannon’s 4 daily flights to Heathrow to be maintained. This need not come at the expense of Belfast, since we believe that Aer Lingus can switch its recently announced 4 times daily Dublin-Gatwick flights to Belfast. Competing from Belfast to Gatwick against the relatively high fare Easyjet, will certainly be more profitable for Aer Lingus than competing against the much lower fare Ryanair on the Dublin-Gatwick route. These moves will we believe deliver superior profits and returns for Aer Lingus shareholders and should therefore be endorsed by the management and shareholders of Aer Lingus. Alternatively Aer Lingus can still fly four times daily from Belfast to Heathrow by switching one Dublin and one Cork flight and taking back the two Heathrow slots which it presently leases out.

“Since Ryanair remains committed to working closely with the Shannon Airport Authority to help them grow and develop Shannon, we have confirmed to the Chairman of Shannon Airport, that these 3 additional daily flights to London will be suspended should Aer Lingus decide to maintain its existing 4 daily flights operation between Shannon and Heathrow. It would not make financial sense for Ryanair to add these flights in circumstances where Aer Lingus continues to provide capacity for 330,00 passengers annually on the Shannon-London route.”

Ryanair stated that a solution to this Shannon crisis is now firmly in Bertie Ahern’s court. Ryanair wrote to him over one week ago offering to work with the Government to preserve the Shannon-Heathrow route. Despite this crisis in Shannon, Bertie Ahern has ignored Ryanair’s letter. Bertie Ahern’s Government cannot ignore this EGM motion. If the Government, acting as a 25% shareholder in Aer Lingus, simply vote in favour of maintaining the profitable Shannon-Heathrow services, then these can and will continue without affecting any of Aer Lingus’s recently announced Belfast-London flights. If Bertie Ahern fails to support this motion, then the extent to which his Government has lied, and abandoned Shannon in favour of Belfast will become apparent to all. In those circumstances, Ryanair will add these 3 extra daily flights to ensure that Shannon suffers no loss of flights or traffic as a result of Aer Lingus abandoning the Shannon-London route.