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O'Leary says Ryanair AL bid is 'radical'

Monday, January 28 10:25:47

Ryanair chief, Michael O'Leary, this morning said that its offer for Aer Lingus is "a radical and unprecedented remedies package to the EU".

The EU's competition authorities are currently considering the E694m takeover bid and will deliver a verdict in March.

"We believe these remedies address every current RyanairAer Lingus crossover route and all other competition issues raised by the Commission in its Statement of Objections," Mr O'Leary said.

"The remedies involve two upfront buyers each basing aircraft in Ireland to takeover and operate a substantial part of Aer Lingus' existing route network and short-haul business. This will be the first EU airline merger which will deliver structural divestitures and multiple upfront buyers. We look forward to completing our offer for Aer Lingus subject to receiving approval from the EU competition authorities in early March".

Ryanair hiked its full-year profit forecast today as strong demand in Northern Europe lifted average fares dramatically in the last three months of 2012.

Dublin-based Ryanair, Europe's top low-cost airline, which has used its size and low costs to undercut struggling flag carriers, hiked its profit forecast to 540 million euros for the year to March, up from an earlier 490-520 million euro range.

"We saw strong demand out of the UK, out of Germany and out of Scandinavia and that has gone straight to our bottom line," Chief Operating Officer Michael Cawley told Reuters.

Strong demand in the run-up to Christmas and a high uptake of reserved seating options helped to lift ticket prices in northern Europe well above the company's forecasts, he said.

Sales were not as buoyant in Southern Europe, with Spain in particular "very weak," and fare growth in Italy flat, he said.

An 8 percent rise in average fares lifted the airline to a profit of 18 million euros in the traditionally weak three months to December, compared with an average forecast by five analysts polled by Reuters of a 5 million euro loss.

Fare growth compared with 5 percent in the six months to September and was way ahead of the 3 percent average forecast by three analysts polled by Reuters.

Average fares will grow at a slower pace in the three months to March, however, Cawley said.

Ryanair has been able to sweep up customers as traditional rivals cut back capacity in the face of slow economic growth in Europe and high fuel costs.