Monday 9 March 2015

Ryanair merged with Norwegian?



While the pilot strike continues without a solution in sight  there are rumors of Norwegian's future. According to Norwegian media, the conflict become so costly that the Norwegian company is considering a merger with budget airline Ryanair. It is a horror scenario for the trade unions.
 
On Monday, the British Sunday Times reports that the airline set up a British subsidiary, Westforce Aviation, back in december. The information was confirmed by the Norwegian's Communications Director Anne-Sissel Skånvik.
 
But speculation that this would be a first step in moving the entire operation to the United Kingdom is denied. Instead, it is about a planned expansion of routes between the United Kingdom and countries in Asia and Africa.


"Then we must fly with bilateral agreements and then we have to have a British license," she says to the Norwegian E24.

But it is not the only rumor that gained momentum on Monday. According to an unnamed source, Norwegian's Managing Director Bjorn Kjos has been in contact with Michael O'Leary, Chief Executive of budget airline Ryanair, on several occasions during the past week. They will, among other things, have talked about a possible merger of the two airlines, according to Norwegian Nettavisen.
 

Via sms greets Charlotte Holmbergh Jacobsson, Swedish Norwegian's press officer, that the airline does not comment on rumors. The same message comes from Ryanair's press office no comment.

"Had you asked me before the strike, I would have said that it would never happen. Now, I say that it can only take place if the Norwegian really bleed and have problems with their finances, "said Jacob Pedersen, aviation analyst at Sydbank in Denmark.
 
Such a scenario is the trade unions nightmare. Although Norwegian belongs to low-cost airlines Ryanair plays in its own League, much due to low staff costs.
 

"It's actually what they are striking against, isn't it? But Norwegian companies would have access to lower cost overall if they were part of the Ryanair model, "said Jacob Pedersen.

A merger would not be completely easy for Ryanair, especially when the existing workforce would suddenly get colleagues with trade union agreements. At the same time, it would also give the Ireland-based airline a stronger presence in the Nordic market.
"They would also get access to over 200 aircraft from Norwegian and it would be good for Ryanair's expansion plans," he says.

In the event of a fusion would Ryanair holding all the cards, according to Jacob Pedersen. It all depends on how expensive the strike is. No one knows how much Norwegian loses for each day the aircraft remains on the ground but it is speculated in the totals in the mångmiljons class.

"Otherwise it would be Bjorn Kjos way of saying that I have received what I can of this. We tried but could not grow outside the Nordic region because of trade union influence, "said Jacob Pedersen.
 
At the same time, it will not prevent Norwegian from rising on the stock exchange. After falling during the first days of the rising share price is now on the Oslo Stock Exchange. Since Wednesday last week, when most of the Norwegianpiloterna went out on strike, the parent company Norwegian Air Shuttle has risen by over 15 percent.