LONDON, England - As you contemplate that question, remember that Ryanair is not just a "low-cost" airline or a "no-frills" airline. It is one of Europe's biggest airlines, full stop. It will soon operate a fleet of 195 planes. Most of its competitors have been forced to rebuild their business models to emulate Ryanair, so the line between "budget" airlines and the rest is blurred. Beyond maybe British Airways, Lufthansa and Air France-KLM, the rest of Europe's carriers are dressed up as "normal" carriers but their service is closer to Ryanair or easyJet than they would admit. Aer Lingus is one of them.
Frankly, if you think of Ryanair as one of the few successful carriers and Aer Lingus as a loss-making dinosaur, then I go back to the original question. Does an island of 4 million people need two carriers?
Ryanair's Michael O'Leary of course thinks not. That's why he has launched another bid, and this time is half the value of his first offer two years ago. That may be why the Aer Lingus board so quickly rejected the offer. But it's not up to the board. It's up to the shareholders. O'Leary has nearly 30 percent of Aer Lingus shares. The Irish government has around 25 percent. So, Dublin and the regulators in Brussels may not react so quickly, this time. Consolidation is moving apace throughout Europe, finally. The threat to European airlines is too much capacity, not fewer airlines.
BA's Willie Walsh predicted 30 airlines would go out of business this year. This morning, an airline analyst said on the radio the number has hit 25. Yet AirAsia has just announced a long-haul low-cost flight from Kuala Lumpur to Stansted. Stansted is one of Ryanair's main hubs. British Airways is trying to merge with Iberia and tie the two tightly with American Airlines, if the U.S. authorities finally allow that. So, strong airlines appear to be getting stronger. Ryanair and easyJet will face more competition all around. O'Leary says that will work in his favor when it comes to the regulators.
Last week, AirAsia's Tony Fernandes predicted the aviation world will split in two: big international carriers that cater exclusively to those willing to pay to sit in the front of the plane, and all the rest. If he is correct, then Aer Lingus shareholders will have to decide which side of the line the carrier with the shamrock can afford to become.
It's official. The U.S. is in recession and has been since December of last year, according to the National Bureau of Economic Research, the folks who keep track of business cycles.
The last two recessions (1990-1991 and 2001) lasted eight months each. And of the 10 previous recessions, only two lasted longer than a full year. I predict this one will at least match the ones in the early 1980s and 1970s that each lasted 16 months. It may even exceed those, but this is not your typical recession.
This is a recession generated first by a downturn in housing which then led to losses by financial institutions - a full-blown financial crisis, the likes of which we haven't seen since the Great Depression.
Credit losses and writedowns at the world's largest financial firms are approaching $1 trillion and when the final ink is dry, that figure will be much higher.
Financial institutions are repairing their decimated balance sheets, hoarding cash, and making it tough to get credit. I suspect this process of deleveraging will last at least another year if not longer.
Oppenheimer Analyst Meredith Whitney predicts that credit card companies will pull back on lending by more than $2 trillion over the next 18 months in what she calls a "dangerous and unprecedented" move for U.S. consumer spending.
So how long will it take the U.S. economy to get back to normal? I spoke with Rob Carnell today of ING. He's worth listening to on the U.S. economy because he and his team have been ranked by Bloomberg as being the most accurate in their forecast for the past two years.
He told me it could be 2011 before we see more typical levels of GDP growth again, typical being about 2.5 percent growth. If he's right, and I suspect he will be, a lot more pain lies ahead for the U.S. economy and other economies as well.
Manufacturing activity in the U.S. is at its lowest level in 26 years and at a record low in the Eurozone and China as companies and consumers pull back. Unemployment is getting worse.
Oil prices have plummeted by more than two thirds in just six months as worries about a worsening global economy accelerate. As one analyst wrote. "It's hard not to be concerned about the prospects for a multi-year global contraction. The daily flow of news is unrelentingly negative and comprised of many issues that should take quite some time to resolve."
The bottom line is this economic downturn is going to be a drawn out affair. Expect a lot more bad news to come, and expect it to come for sometime.
Let me know your thoughts.
Are you pessimistic about when the U.S. and global economies will recover?
Do you agree that it could be at least two more years before growth gets back to more normal levels?
What else could authorities do that they're not doing to try and speed up the recovery?
About Business 360
CNN International's business anchors and correspondents get to grips with the issues affecting world business, and they want your questions and feedback.