Author Topic: Elal buying/merging Israir  (Read 6032 times)

Offline ExGingi

  • Dansdeals Lifetime 10K Presidential Platinum Elite
  • *******
  • Join Date: Nov 2015
  • Posts: 15618
  • Total likes: 7711
  • DansDeals.com Hat Tips 19
    • View Profile
  • Location: 770
  • Programs: בשורת הגאולה. From Exile to Redemption. GIYF. AAdvantage Executive Platinum®
I've been waiting over 5 years with bated breath for someone to say that!
-- Dan

Online tavster

  • Dansdeals Presidential Platinum Elite
  • ********
  • Join Date: Jan 2015
  • Posts: 3573
  • Total likes: 723
  • DansDeals.com Hat Tips 65
    • View Profile
  • Location: Israel
  • Programs: LY TP
Re: Elal buying/merging Israir
« Reply #21 on: January 11, 2018, 01:53:04 AM »
Mergers shot down!

http://hamodia.com/2018/01/10/state-nixes-proposed-merger-israir-el-als-sundor/
Sadly the Israeli antitrust has been banning most merger attempt across industries. In Telecoms, where we have 5 carriers, they blocked a merger. And the same thing will likely happen with Bank Mizrahi and Union Bank

Offline thaber

  • Dansdeals Presidential Platinum Elite
  • ********
  • Join Date: May 2008
  • Posts: 3784
  • Total likes: 465
  • DansDeals.com Hat Tips 4
    • View Profile
Re: Elal buying/merging Israir
« Reply #22 on: January 11, 2018, 01:58:03 AM »

Online tavster

  • Dansdeals Presidential Platinum Elite
  • ********
  • Join Date: Jan 2015
  • Posts: 3573
  • Total likes: 723
  • DansDeals.com Hat Tips 65
    • View Profile
  • Location: Israel
  • Programs: LY TP
Re: Elal buying/merging Israir
« Reply #23 on: January 11, 2018, 02:04:46 AM »
why?
I look at it from an investor's standpoint since I'm an analyst, rather than from a consumer standpoint.

For an investor it's typically bad news because of missed revenues and cost synergies.

Offline thaber

  • Dansdeals Presidential Platinum Elite
  • ********
  • Join Date: May 2008
  • Posts: 3784
  • Total likes: 465
  • DansDeals.com Hat Tips 4
    • View Profile
Re: Elal buying/merging Israir
« Reply #24 on: January 11, 2018, 02:06:24 AM »
I look at it from an investor's standpoint since I'm an analyst, rather than from a consumer standpoint.

For an investor it's typically bad news because of missed revenues and cost synergies.
Fair enough

Offline ExGingi

  • Dansdeals Lifetime 10K Presidential Platinum Elite
  • *******
  • Join Date: Nov 2015
  • Posts: 15618
  • Total likes: 7711
  • DansDeals.com Hat Tips 19
    • View Profile
  • Location: 770
  • Programs: בשורת הגאולה. From Exile to Redemption. GIYF. AAdvantage Executive Platinum®
Re: Elal buying/merging Israir
« Reply #25 on: January 11, 2018, 02:24:11 AM »

Sadly the Israeli antitrust has been banning most merger attempt across industries. In Telecoms, where we have 5 carriers, they blocked a merger. And the same thing will likely happen with Bank Mizrahi and Union Bank
The question is whether they are actually promoting competition, or breaking up monopolies/duopolies?

In this case the cited a cementing of the duopoly that flies into Eilat as a reason. That sounds odd to me, as AFAIK ELAL doesn’t fly to Eilat (does Sun D’Or?) so it’s being shot down due to perceived potential competition? Also this is being done at a time when open skies is aggressively being promoted, so it really sounds odd.

OTOH, would the decision be different if ELAL would spin off Sun D’Or? How does Sun D’Or contribute to ELAL’s bottom line?

As a side note, IINM both Sun D’Or and Israir schedule flights on Shabbos.
I've been waiting over 5 years with bated breath for someone to say that!
-- Dan

Online tavster

  • Dansdeals Presidential Platinum Elite
  • ********
  • Join Date: Jan 2015
  • Posts: 3573
  • Total likes: 723
  • DansDeals.com Hat Tips 65
    • View Profile
  • Location: Israel
  • Programs: LY TP
Re: Elal buying/merging Israir
« Reply #26 on: January 11, 2018, 02:45:00 AM »
The question is whether they are actually promoting competition, or breaking up monopolies/duopolies?

In this case the cited a cementing of the duopoly that flies into Eilat as a reason. That sounds odd to me, as AFAIK ELAL doesn’t fly to Eilat (does Sun D’Or?) so it’s being shot down due to perceived potential competition? Also this is being done at a time when open skies is aggressively being promoted, so it really sounds odd.

OTOH, would the decision be different if ELAL would spin off Sun D’Or? How does Sun D’Or contribute to ELAL’s bottom line?

As a side note, IINM both Sun D’Or and Israir schedule flights on Shabbos.
The regulator's main objective is to make sure that the consumer isn't harmed, i.e. that prices won't go up. I wouldn't call it promoting competition but rather imposing it.

As you said the Eilat route is a duopoly with only Israir and Sun d'Or (which belongs to LY) operating it so I understand the concerns that prices will go up (especially since LY already commented that this route isn't profitable).

As a result it wouldn't be different if LY was to spin off Sun d'Or as you would still end up with a monopolistic position on this route

The issue is that they had bigger plans for the merged companies, including new low-cost routes to European destination so it's a shame that this would go to waste because of the Eilat route.

« Last Edit: January 11, 2018, 02:49:34 AM by tavster »

Offline ExGingi

  • Dansdeals Lifetime 10K Presidential Platinum Elite
  • *******
  • Join Date: Nov 2015
  • Posts: 15618
  • Total likes: 7711
  • DansDeals.com Hat Tips 19
    • View Profile
  • Location: 770
  • Programs: בשורת הגאולה. From Exile to Redemption. GIYF. AAdvantage Executive Platinum®
Re: Elal buying/merging Israir
« Reply #27 on: January 11, 2018, 02:50:02 AM »

The regulator's main objective is to make sure that the consumer isn't harmed, i.e. that prices won't go up. I wouldn't call it promoting competition but rather imposing it.

As you said the Eilat route is a duopoly with only Israir and Sun d'Or (which belongs to LY) operating it so I understand the concerns that prices will go up (especially since LY already commented that this route isn't profitable).

As a result it wouldn't be different is LY was to spin off Sun d'Or as you would still end up with a monopolistic position on this route

The issue is that they had bigger plans for the merged companies, including new low-cost routes to European destination so it's a shame that this would go to waste because of the Eilat route.
I think you might have some facts wrong.

The duopoly is Israir and Arkia.

I don’t know if Sun D’Or flies between foreign destinations and Eilat, but I don’t think they operate domestically. IINM Sun D’Or doesn’t sell flights directly, but only as part of a tour package or on a charter basis.
I've been waiting over 5 years with bated breath for someone to say that!
-- Dan

Online tavster

  • Dansdeals Presidential Platinum Elite
  • ********
  • Join Date: Jan 2015
  • Posts: 3573
  • Total likes: 723
  • DansDeals.com Hat Tips 65
    • View Profile
  • Location: Israel
  • Programs: LY TP
Re: Elal buying/merging Israir
« Reply #28 on: January 11, 2018, 02:55:48 AM »
I think you might have some facts wrong.

The duopoly is Israir and Arkia.
You're right, I mixed things up, sorry.
So I'd assume that the concern is that LY would cancel the Israir flights to Eilat and leave Arkia on its own on that route?

Offline ExGingi

  • Dansdeals Lifetime 10K Presidential Platinum Elite
  • *******
  • Join Date: Nov 2015
  • Posts: 15618
  • Total likes: 7711
  • DansDeals.com Hat Tips 19
    • View Profile
  • Location: 770
  • Programs: בשורת הגאולה. From Exile to Redemption. GIYF. AAdvantage Executive Platinum®
Re: Elal buying/merging Israir
« Reply #29 on: January 11, 2018, 02:57:36 AM »

You're right, I mixed things up, sorry.
So I'd assume that the concern is that LY would cancel the Israir flights to Eilat and leave Arkia on its own on that route?
You’re asking me?

Based on what I read Israir was actually going to increase service.
I've been waiting over 5 years with bated breath for someone to say that!
-- Dan