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Aer Lingus Considering Rejoining Oneworld?  
User currently offlineLX138 From United Kingdom, joined Jul 2009, 393 posts, RR: 0
Posted (4 years 8 months 1 week 2 days 14 hours ago) and read 7834 times:

According to the Irish Independent:

"JUST when it seemed as if things couldn't get any worse for Aer Lingus, finance director Sean Coyle announces that he is leaving at the end of the month. With the pilots' refusal to accept the company's cost-cutting plan likely to result in strikes, the outlook for Aer Lingus has just become even more uncertain.
On Wednesday, Aer Lingus revealed that Mr Coyle, who has been finance director since October 2008, would be leaving the company at the end of the month.

Beyond the usual guff about leaving "by mutual consent" to "pursue other interests", the company provided no further details about his departure after just 16 months on board.

However, unconfirmed reports suggest that Mr Coyle had a difference of opinion with new chief executive Christoph Mueller about the airline's future.
Apparently Mr Coyle, who was headhunted from Ryanair, wanted to continue the policy of reshaping Aer Lingus as a low-cost, point-to-point airline along the lines of his former employer while Mueller wanted to cement alliances with other airlines and perhaps rejoin the OneWorld grouping, from which Aer Lingus withdrew in 2006." continues...

http://www.independent.ie/business/i...as-aer-lingus-wobbles-1973128.html


Would this be something that Aer Lingus should now consider? The link continues to mention the badly performing long-haul network, so what are their options?


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30 replies: All unread, showing first 25:
 
User currently offlineBA319-131 From United Kingdom, joined Jan 2001, 8524 posts, RR: 54
Reply 1, posted (4 years 8 months 1 week 2 days 13 hours ago) and read 7787 times:
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Whilst it would be great to see EI re-join Oneworld, I don't think the benefits are there for them, given the costs related to being a member of an alliance.

In my opinion, they should continue with the current LCC mode they are following, if they don't keep their cost base down to a minimum a short fare war with by FR could easily kill them off.

The longhaul routes to the states are a relic of the past, IMO, as time moves on I see fewer people from the states visiting Ireland as the ties with the past become more distant.

A LCC alliance between a number of carriers couled be a good idea for a number of the smaller players.

Just my 0.02 cents......



111,732,3,4,5,7,8,BBJ,741,742,743,744,752,762,763,764,772,77L,773,77W,L15,D10,30,40,AB3,AB6,A312.313,319,320,321,332,333
User currently offlineKaitak From Ireland, joined Aug 1999, 12427 posts, RR: 37
Reply 2, posted (4 years 8 months 1 week 2 days 13 hours ago) and read 7750 times:

Firstly, the main focus would be on cutting costs and really, until this has been achieved, we won't see any major developments.

I would agree that the prospects of rejoining oneworld are slim; I don't see what benefit would be in it for them and then of course, they face the extra, unnecessary costs of getting the computer systems linked up.

Quoting BA319-131 (Reply 1):
The longhaul routes to the states are a relic of the past, IMO, as time moves on I see fewer people from the states visiting Ireland as the ties with the past become more distant.

Have to disagree with this; I think there is massive potential here, especially in the Open Skies era; Aer Lingus can benefit from this, if it moves to a long haul low cost model (although whether CM sees it this way remains to be seen); however, I still see a lot of potential for growth there. Americans will continue travelling to the EU in greater numbers; Ireland is the first stop on the Great Circle and EI has a very considerable network within Europe, so I think they can build a good business in the US from that.


User currently offlineTropical77W From Canada, joined Dec 2009, 65 posts, RR: 0
Reply 3, posted (4 years 8 months 1 week 2 days 13 hours ago) and read 7663 times:

given that LCC's seem to be the way of the future for air travel, and given some of the past problems they've had, they should probably steer clear of oneworld.

Quoting Kaitak (Reply 2):
Americans will continue travelling to the EU in greater numbers; Ireland is the first stop on the Great Circle and EI has a very considerable network within Europe, so I think they can build a good business in the US from that.

agreed. i would hope that they can find a way to keep on using the snn preclearance, it would be a shame to see that go to waste.

it is possible to be a relative LCC on transatlantic flights. does icelandair not charge for food?


User currently offlineClassicLover From Ireland, joined Mar 2004, 4634 posts, RR: 23
Reply 4, posted (4 years 8 months 1 week 2 days 11 hours ago) and read 7377 times:



Quoting LX138 (Thread starter):
Would this be something that Aer Lingus should now consider? The link continues to mention the badly performing long-haul network, so what are their options?

I believe they should. The other Irish airline is Ryanair and they are a low cost airline. Aer Lingus made a huge error in trying to ape them in my opinion. They should be positioned as a great quality long haul airline with an inexpensive short haul product with great connections as a member of an alliance.

Rejoining oneworld would be brilliant.

Quoting BA319-131 (Reply 1):
Whilst it would be great to see EI re-join Oneworld, I don't think the benefits are there for them, given the costs related to being a member of an alliance.

The only cost appeared to be JAL coming on board. Actually, almost all the oneworld airlines, apart from two (JAL and American Airlines) are using Amadeus. What do EI use? I doubt it would cost much to rejoin, though the JAL thing may be an issue...

I am biased though  Smile



I do quite enjoy a spot of flying - more so when it's not in Economy!
User currently offlineBrianDromey From Ireland, joined Dec 2006, 3920 posts, RR: 9
Reply 5, posted (4 years 8 months 1 week 2 days 11 hours ago) and read 7261 times:

I think it is clear from the numbers that the long-haul business at EI is in deep, deep trouble. Destinations like BWI, DXB, LAX, SFO and IAD have all come and gone over the last number of years. Admittedly EI has made a lot of mistakes with the scheduling, promotional, product and pricing mixes, but the Irish market is just too small to support any substantial long-haul O&D market. EI needs connecting traffic and decent infrastructure to make it's long-haul business work. A weak code-share with UA and bizarre "industry-first partnership" with B6 are clearly not enough to make it work and globalize the EI brand outside the traditional American-Irish US demographic.

DUB's brand new terminal is about to open, complete with US pre-clearance for both immigration and customs. oneworld has no obvious hub, other than LHR for connecting Europe to the US. DUB ideally fills that gap, with HEL as the Asian hub and MAD as the south American hub. Yes, oneworld would be concentrating on the peripheries of Europe, connecting Europe to the world, but SkyTeam and STAR have captured Western and Central Europe. Furthermore the LCC's like FR, U2, et al are mopping up more and more of the intra-europe traffic, FFPs and alliance loyalties are much less important than they may once have been.

EI can offer oneworld something and oneworld can help the EI long-haul network. If EI is to re-join and alliance, it is the one which make most sense.



Next flights: MAN-ORK-LHR(EI)-MAN(BD); MAN-LHR(BD)-ORK (EI); DUB-ZRH-LAX (LX) LAX-YYZ (AC) YYZ-YHZ-LHR(AC)-DUB(BD)
User currently offlineBA319-131 From United Kingdom, joined Jan 2001, 8524 posts, RR: 54
Reply 6, posted (4 years 8 months 1 week 2 days 11 hours ago) and read 7209 times:
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Quoting BrianDromey (Reply 5):
the Irish market is just too small to support any substantial long-haul O&D market

- Spot on.

Quoting BrianDromey (Reply 5):
EI can offer oneworld something and oneworld can help the EI long-haul network. If EI is to re-join and alliance, it is the one which make most sense.

- Of the 3 this makes the most sense, but does it make financial sense? I'm not sure how much these airlines have to pay into the alliance 'pot' for advertising etc, but I bet it's not cheap.



111,732,3,4,5,7,8,BBJ,741,742,743,744,752,762,763,764,772,77L,773,77W,L15,D10,30,40,AB3,AB6,A312.313,319,320,321,332,333
User currently offlineHeeBeeGB From Finland, joined Sep 2007, 424 posts, RR: 0
Reply 7, posted (4 years 8 months 1 week 2 days 11 hours ago) and read 7209 times:

Until EI offer competitive fares LON-USA how can that market work? As long as you include a Sat night you can eaily fly BA/AA/DL/VS etc LON-NYC for example direct much cheaper than EI via DUB.

User currently offlineEvomutant From United Kingdom, joined May 2006, 485 posts, RR: 0
Reply 8, posted (4 years 8 months 1 week 2 days 10 hours ago) and read 7167 times:

I have enjoyed flying Aer Lingus a number of times, I'm a big fan. That said, do they really offer anything to Oneworld any more?

There is nothing that can be done through Dublin that cannot be done through BA at Heathrow (except the UK regions, ironically). And they are going to be sat on the outside, at least initially, of the AA/BA/IB ATI (when it finally gets done).

It just kind of seems pointless. Oneworld doesn't really add anything, EI will have to stump a fair chunk of cash they don't have. Why do it?


User currently offlineEI320 From Ireland, joined Dec 2007, 1436 posts, RR: 0
Reply 9, posted (4 years 8 months 1 week 2 days 10 hours ago) and read 7083 times:

I think it's clear that the new CEO at EI, Christoph Mueller, may have a slightly different strategy in mind for the airline. The LCC model may no longer be pursued as vigorously as it has been since 2001 since Mueller seems more interested in forging partnerships with other carriers rather than "going at it alone". The current business model has worked well for short-haul, but long-haul has been struggling for quite some time. I'm not saying that alliance membership is the way to solve this, but I do think it's worth seriously considering again.

As Brian said above, oneworld remains the best fit for EI as it was when they first joined back in 2000.

Quoting Evomutant (Reply 8):
Oneworld doesn't really add anything, EI will have to stump a fair chunk of cash they don't have. Why do it?

It may be a case of "well what else do we do?" EI is losing money hand over fist at the minute so it would appear that the LCC model just isn't working anymore. Profits were easy to come by between 2002-2008 so the current model hasn't really been put to the test at EI. I've absolutely no knowledge of the performance of the new LGW base, but if EI is bleeding money over there and unable to compete with the much stronger U2, Mueller may feel that it's best to downsize and just concentrate on the home market - Ireland. If Mueller had something like this in mind, well then alliance membership may be suitable. EI could focus on feeding other airlines and/or establishing an effective hub at DUB and promote it as an ideal connection point between the UK/Europe and the US.



[Edited 2009-12-14 15:13:23]

User currently offlineAvek00 From United States of America, joined Oct 2004, 4368 posts, RR: 19
Reply 10, posted (4 years 8 months 1 week 2 days 9 hours ago) and read 6974 times:



Quoting BrianDromey (Reply 5):
Yes, oneworld would be concentrating on the peripheries of Europe, connecting Europe to the world, but SkyTeam and STAR have captured Western and Central Europe.

Oneworld member carriers will be nothing more than also-ran relics of the past going forward if they don't find a way to build a respectable presence, particularly longhaul presence, beyond the periphery (i.e., in locales where the growth opportunities actually exist). While London and Madrid continue to benefit from strong O&D flows due to various historical ties, the "growth" in European longhaul flying is taking place -- and will continue to take place -- to/from markets like DUS, MUC, and MXP, and connecting via LHR or MAD simply won't appeal to those travelers.



Live life to the fullest.
User currently offlineLAXdude1023 From India, joined Sep 2006, 7535 posts, RR: 25
Reply 11, posted (4 years 8 months 1 week 2 days 9 hours ago) and read 6939 times:



Quoting Avek00 (Reply 10):
to/from markets like DUS, MUC, and MXP, and connecting via LHR or MAD simply won't appeal to those travelers

Why would it matter? If Im flying from DFW/LAX/SEA/BOS (as examples) to those markets, why would it matter if I fly via LHR or MAD vs. CDG or FRA?



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User currently offlineEvomutant From United Kingdom, joined May 2006, 485 posts, RR: 0
Reply 12, posted (4 years 8 months 1 week 2 days 9 hours ago) and read 6904 times:



Quoting LAXdude1023 (Reply 11):
Quoting Avek00 (Reply 10):
to/from markets like DUS, MUC, and MXP, and connecting via LHR or MAD simply won't appeal to those travelers

Why would it matter? If Im flying from DFW/LAX/SEA/BOS (as examples) to those markets, why would it matter if I fly via LHR or MAD vs. CDG or FRA?

I think the point is that fairly soon it is not going to be necessary to connect anywhere to the like of DUS and MXP. Those markets are expanding in their own right, and Star and Skyteam have them squared away, so they are fine. Oneworld remain with just their mega hubs at LHR and MAD, which will become increasingly irrelevant when people start bypassing connections for direct flights.


User currently offlineAirNz From , joined Dec 1969, posts, RR:
Reply 13, posted (4 years 8 months 1 week 2 days 9 hours ago) and read 6887 times:



Quoting EI320 (Reply 9):
and/or establishing an effective hub at DUB and promote it as an ideal connection point between the UK/Europe and the US.

They've had every opportunity, and reason, to do this for the past 20+ years.......why should they suddenly see sense and do it now?

Quoting BrianDromey (Reply 5):
and oneworld can help the EI long-haul network

How do you see that? In what way?


User currently offlineCXA330300 From South Africa, joined May 2004, 1560 posts, RR: 2
Reply 14, posted (4 years 8 months 1 week 2 days 6 hours ago) and read 6683 times:

EI left OW recently enough where I can't see them going back in the near future. Furthermore, EI's just started a joint venture with UA on IAD-MAD-hardly moving towards OW...


The sky is the limit as long as you can stay there
User currently offlineLAXdude1023 From India, joined Sep 2006, 7535 posts, RR: 25
Reply 15, posted (4 years 8 months 1 week 2 days 5 hours ago) and read 6627 times:



Quoting Evomutant (Reply 12):
Oneworld remain with just their mega hubs at LHR and MAD, which will become increasingly irrelevant when people start bypassing connections for direct flights.

So cities like that are going to have flights to every major city on this side of the pond?  Yeah sure

The cities that have significant O&D to those places already have flights. The rest are served perfectly through LHR, MAD, CDG, FRA, or a hub like that. To that degree, it doesnt matter.



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User currently offlineMAH4546 From Sweden, joined Jan 2001, 32686 posts, RR: 72
Reply 16, posted (4 years 8 months 1 week 2 days 5 hours ago) and read 6597 times:



Quoting Evomutant (Reply 12):
I think the point is that fairly soon it is not going to be necessary to connect anywhere to the like of DUS and MXP.

Today MXP is connected to Atlanta and New York City and, come June, Miami.

In the past decade Milan has lost service to Philadelphia, Washington (twice), Chicago (twice), Toronto (twice), Los Angeles, Montreal, Boston (twice), and San Francisco.

While some secondary markets like Barcelona have seen a lot of growth in non-stops, U.S.-Europe travel remains primarily dominated by flow through the major hubs - Heathrow, Amsterdam, Paris, Frankfurt and, the up and comer, Madrid.



a.
User currently offlineBrianDromey From Ireland, joined Dec 2006, 3920 posts, RR: 9
Reply 17, posted (4 years 8 months 1 week 2 days 1 hour ago) and read 5974 times:



Quoting AirNz (Reply 13):
How do you see that? In what way?

I see EI joining the trans-atlantic JV operations of AA/BA/IB/RJ/AY, assuming it gets ATI approval. This may help insulate the airline from some of the losses generated by the transatlantic services - depending how revenue and losses are split. It would also undoubtedly increase the volume of transfer traffic out of the US gateways, but only if they get the connection possibilities scheduled correctly.

Brian.



Next flights: MAN-ORK-LHR(EI)-MAN(BD); MAN-LHR(BD)-ORK (EI); DUB-ZRH-LAX (LX) LAX-YYZ (AC) YYZ-YHZ-LHR(AC)-DUB(BD)
User currently offlineOP3000 From United States of America, joined Jun 2009, 1763 posts, RR: 2
Reply 18, posted (4 years 8 months 1 week 2 days 1 hour ago) and read 5914 times:



Quoting ClassicLover (Reply 4):
I believe they should. The other Irish airline is Ryanair and they are a low cost airline. Aer Lingus made a huge error in trying to ape them in my opinion. They should be positioned as a great quality long haul airline with an inexpensive short haul product with great connections as a member of an alliance.

I agree. There is no way EI can ever compete with FR on a cost basis, and making it an LCC operator was paving the way for it to get gobbled up by MOL. With that no longer being the objective, EI is in an awkward no-man's land which probably won't last. Even US is still part of an alliance, and other successful LCCs with less international services (Gol, WS, Jetblue) are moving towards the partnership/alliance space.


User currently offlineClydenairways From Ireland, joined Jan 2007, 1232 posts, RR: 0
Reply 19, posted (4 years 8 months 1 week 1 day 21 hours ago) and read 5330 times:



Quoting ClassicLover (Reply 4):
I believe they should. The other Irish airline is Ryanair and they are a low cost airline. Aer Lingus made a huge error in trying to ape them in my opinion. They should be positioned as a great quality long haul airline with an inexpensive short haul product with great connections as a member of an alliance.

Rejoining oneworld would be brilliant.

Don't really agree with this... The Irish market is very small and predomiatley low yeild, there is very little growth potental for a non LCC carrier in the irish market.
If Aer lingus stayed with the same dual class legacy strategy they had before they would probably be half the size they are today with nowhere to grow, and they would probably be loosing twice the amount of money they now are too.

The market for what you describe above does exist, but it is very much a small niech operation only.


User currently offlineJAL From Canada, joined Apr 2000, 5083 posts, RR: 8
Reply 20, posted (4 years 8 months 1 week 1 day 17 hours ago) and read 4617 times:

Why the change in policy for Aer Lingus??


Work Hard But Play Harder
User currently offlineATLFlyer323 From United States of America, joined Jan 2005, 614 posts, RR: 0
Reply 21, posted (4 years 8 months 1 week 1 day 17 hours ago) and read 4437 times:

I'm saying this with no knowledge of Aer Lingus long hall load factors, but if their long haul routes are not making money, but they want to keep them, would it make sense for them to dispose of the A333's and get smaller long haul aircraft? Do they have enough demand to fill the A333's all year round? I know they have a few A332's and I'm sure they could get some 767's for cheap.....

Just a thought,

Brandon



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User currently offlineJfk777 From United States of America, joined Aug 2006, 8323 posts, RR: 7
Reply 22, posted (4 years 8 months 1 week 1 day 16 hours ago) and read 4364 times:
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Quoting BrianDromey (Reply 5):
EI can offer oneworld something and oneworld can help the EI long-haul network. If EI is to re-join and alliance, it is the one which make most sense.

EI left ONEWORLD because they had to pay for some computer integration costs for JAL. They thought they were paying too much since they are smaller then the other partners. Aer Lingus needs to fly to its traditional JFK and Boston gateways as well as Miami, Chicago and possibly DFW. California dreaming hasn't proved to be all it promised.

I have always thought South Africa and an Asian destinatin should be flown too. HKG would be the obvious choice for connections with Cathay.


User currently offlineClassicLover From Ireland, joined Mar 2004, 4634 posts, RR: 23
Reply 23, posted (4 years 8 months 1 week 1 day 10 hours ago) and read 3737 times:



Quoting Clydenairways (Reply 19):
Don't really agree with this... The Irish market is very small and predomiatley low yeild, there is very little growth potental for a non LCC carrier in the irish market.

I agree with this, and youy seem to have missed my point...

Quoting Clydenairways (Reply 19):
If Aer lingus stayed with the same dual class legacy strategy they had before they would probably be half the size they are today with nowhere to grow, and they would probably be loosing twice the amount of money they now are too.

As I said, low cost short haul (albeit with a intra-European J product - even 4 seats per flight) and a big promotion of a high quality long haul.

Really, EI would make money if their cost base was lower, the old Government mentality never really left the company over the last 10 years.

Quoting Jfk777 (Reply 22):
EI left ONEWORLD because they had to pay for some computer integration costs for JAL. They thought they were paying too much since they are smaller then the other partners

Agreed, big mistake in hindsight.



I do quite enjoy a spot of flying - more so when it's not in Economy!
User currently offlineAvek00 From United States of America, joined Oct 2004, 4368 posts, RR: 19
Reply 24, posted (4 years 8 months 1 week 1 day 9 hours ago) and read 3676 times:



Quoting LAXdude1023 (Reply 15):
So cities like that are going to have flights to every major city on this side of the pond?

The cities that have significant O&D to those places already have flights. The rest are served perfectly through LHR, MAD, CDG, FRA, or a hub like that. To that degree, it doesnt matter.

I did not approach my prior comments with a TATL focus. I'm actually thinking more along the lines of flights to the Middle East, Asia, and Africa -- in short, markets where economic development is stimulating the need for service to European cities beyond just yesteryear's options of LHR/CDG/FRA. Oneworld member carriers are, collectively speaking, poorly positioned to cater to much of that demand compared to member carriers of the other alliances.



Live life to the fullest.
25 TravelExec : You are correct Brandon... what a shame the board of EI have not had as much knowledge of the airline as you have managed to show by applying yoursel
26 Avek00 : What some of you are proposing is that EI try to become a virtual clone of KLM. Thing is, Aer Lingus lacks the: 1) Fleet size; 2) Network breadth; 3)
27 Shamrock350 : The long-haul load factor has been 71.8% for the year so far which is actually up on last year. I don't think the aircraft they use is the problem, t
28 Jfk777 : With Aer Lingus' large traffic to LHR they connect lots of passengers to BA at LHR headed for places EI doesn't fly, several hundred passengers daily.
29 ATLFlyer323 : They currently fly or ORD do they not? -Brandon
30 EI320 : Yes, serviced daily from DUB with connecting service offered on UA.
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