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Ryanair finalising bid for Italy's Alitalia, says boss Michael O'Leary

Ryanair has no interest in making a bid for struggling German carrier Air Berlin, chief executive Michael O'Leary said.

Michael O’Leary says Ryanair will need to buy more planes if it buys Alitalia

Ryanair Holdings PLC (LON:RYA) is in the process of finalising a takeover bid for Italy’s bankrupt airline Alitalia in a deal that would mark the company’s second major acquisition in its 33-year history.

Michael O’Leary, Ryanair’s chief executive, confirmed the Irish airline was thrashing out the details of a binding offer for Alitalia but said it had no interest in the ailing German carrier Air Berlin.

He said he hoped to preserve jobs for pilots and crew but that they would have to accept new employment terms in line with Ryanair’s own.

O’Leary also said Ryanair would have to order new planes from Boeing or Airbus as it prefers using its own fleet rather than leasing planes, as Alitalia does.

Alitalia was put up for sale earlier this year after the Italian government approved its request to be put into administration.

Employees had rejected a rescue plan that would have seen wages cut in return for an extra €2bn investment from shareholders, including Gulf airline Etihad, which owns 49%.

The government had also ruled out renationalising Alitalia, which was privatised and relaunched in 2008 after filing for bankruptcy protection earlier that year.

No interest in Air Berlin

Air Berlin is also up for sale but O’Leary said he had no intention of making an offer. He repeated his claim that it was a conspiracy between Germany, Lufthansa and Air Berlin to carve up the assets and strengthen Lufthansa.

O’Leary said he expects European Union competition authorities will demand substantial remedies in the event Lufthansa buys Air Berlin. He said the carrier will likely to have to give up slots on routes within Germany to preserve competition.

The German government has denied O’Leary’s claims, adding that its support for Air Berlin did not breach anti-trust rules.

In 2013, the EU rejected Ryanair’s bid to buy Irish rival Aer Lingus.

If it the acquisition of Alitalia goes ahead, it would be Ryanair’s first successful takeover since it bought rival Buzz from KLM in 2003.

European Court rules in Ryanair's favour in workers' dispute

Meanwhile, the European Court of Justice has ruled in favour of Ryanair’s position in a legal dispute with six former workers who were seeking €20,000 on allegations of unpaid wages, unpaid travel expenses and severance pay.

The employees had tried to take their case through Belgium courts as they consider their home base to be in the country’s Charleroi airport but Ryanair argued that such disputes should be held where the company is based in Ireland.

The ECJ backed Ryanair in saying the place where the employee “habitually carries out his work cannot be assimilated to the home base… but is at the place where or from which that worker principally carries out his obligations vis-à-vis his employer”.

Ryanair said Irish legislation had adopted all EU directives on employment rights. The group said in some cases Ireland offers better protection than some EU countries, with maternity leave more favourable than in Belgium and the minimum wage among the highest in Europe.

Quick facts: Ryanair Holdings plc

Price: 9.13 EUR

Market: LSE
Market Cap: €9.95 billion

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