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Aer Lingus -Does It Have A Future?  
User currently offlineBAfan From United Kingdom, joined May 2008, 189 posts, RR: 0
Posted (3 years 9 months 3 weeks 1 day 21 hours ago) and read 4131 times:

I have flown with Aer Lingus over the years many times and have always had a great experience, but in highlight of the EU's latest decision regarding Ryanair's ownership/takeover attempts, I am really beginning to question what Aer Lingus can really do in order to survive.

The airline mad a great attempt of setting up a hub at Gatwick, but this cost them dearly and resulted in the airline making heavy losses and closing the majority of the routes that had been started.

What future does Aer Lingus have competing with Ryanair on it's short haul routes and the larger carriers on it's long haul routes?

Is it really an attractive proposition for any other airline to buy a share/takeover (other than FR)?

I think it would be a terrible shame if the airline went bust, but the Irish government doesn't have funds to help it and Ryanair are just being mischievous on the board.

11 replies: All unread, jump to last
 
User currently offlineairborne1 From United States of America, joined Feb 2008, 99 posts, RR: 0
Reply 1, posted (3 years 9 months 3 weeks 1 day 21 hours ago) and read 4127 times:

Air lingus, will just keep wet leasing planes to united and outsourcing crews
Unless cal and united pilots put the breaks on this Washington-Madrid flight
During the merge.


User currently offlineBAfan From United Kingdom, joined May 2008, 189 posts, RR: 0
Reply 2, posted (3 years 9 months 3 weeks 1 day 21 hours ago) and read 4098 times:

Will that generate enough money to keep Aer Lingus going?

User currently offlinevin2basketball From United States of America, joined Dec 2009, 308 posts, RR: 0
Reply 3, posted (3 years 9 months 3 weeks 1 day 21 hours ago) and read 4022 times:

Quoting BAfan (Reply 2):
Will that generate enough money to keep Aer Lingus going?

No, but I think that that outsourcing model could really help them. Aer Lingus has some of the lowest legacy costs in Europe, perhaps they could do what they did for United, but like this, MAN-JFK for BD, LHR-EWR for BD, PRG-ORD for Czech, and onwards



Follow me on Twitter: @TheABVinay
User currently offlinedutchflyboi From Netherlands, joined Apr 2008, 333 posts, RR: 0
Reply 4, posted (3 years 9 months 3 weeks 1 day 20 hours ago) and read 3968 times:

Quoting airborne1 (Reply 1):
Air lingus, will just keep wet leasing planes to united and outsourcing crews

It's not a wet lease, but a code share... flown by US based cabin crew and DUB/IAD pilot crews. Seems that the CEO of EI is coming to town next week, to announce 2 more routes and visit the base. Looks like this arrangement is staying for a while.
I know at lots of people at UA don't like this arrangement, but it is working for both companies. It's a route that UA couldn't make work in the past...now it is a win win for both companies.

Quoting BAfan (Thread starter):
The airline mad a great attempt of setting up a hub at Gatwick, but this cost them dearly and resulted in the airline making heavy losses and closing the majority of the routes that had been started.

The base at LGW was setup to fail. Poor routes... flights to secondary cities, not really promoted well.


User currently offlineCOEI2007 From Vanuatu, joined Jan 2007, 1912 posts, RR: 5
Reply 5, posted (3 years 9 months 3 weeks 1 day 19 hours ago) and read 3747 times:

Quoting dutchflyboi (Reply 4):
Seems that the CEO of EI is coming to town next week, to announce 2 more routes and visit the base. Looks like this arrangement is staying for a while.

Where are the aircraft coming from for these routes?


User currently offlinekaitak From Ireland, joined Aug 1999, 12328 posts, RR: 35
Reply 6, posted (3 years 9 months 3 weeks 1 day 18 hours ago) and read 3620 times:

Quoting BAfan (Thread starter):
The airline mad a great attempt of setting up a hub at Gatwick, but this cost them dearly and resulted in the airline making heavy losses and closing the majority of the routes that had been started.

This was done under the former CEO, Dermot Mannion and the new CEO, who has made significant changes, has reversed almost everything the predecessor did. LGW has been wound down (it should never have been started), the cost base has been cut back (for example the lease on the current head office building has been ended and EI will concentrate its office work on a large hangar (which has plenty of office space) at DUB.

One of the biggest changes - and likely to be an ever growing threat to FR - is the franchise deal with RE, which is likely to be expanded significantly.

I see more changes coming (particularly on long haul, where I expect the A359 order to be dropped in favour of a more appropriately sized aircraft), a possible A319 order and - once T2 at DUB is opened - a much more focused attempt to establish a hub at DUB.

I'm a lot more optimistic about EI's future now than I was this time last year or two years' ago; Mannion should have been got rid of far more quickly than he was.

Quoting COEI2007 (Reply 5):
Where are the aircraft coming from for these routes?

Aren't there two 332s still in the fleet?


User currently offlineEIBusiness From Ireland, joined Feb 2010, 629 posts, RR: 7
Reply 7, posted (3 years 9 months 3 weeks 1 day 17 hours ago) and read 3543 times:

Aer Lingus does indeed have a future.

Put simply, any company that can generate revenues in excess of €1 billion euro in any fiscal year certainly has a future.

I would very much agree that the FR shareholding will be a significant issue for some time to come. However, the company has stabilised in many ways over the past twelve months.

I think that the half year report that will be published on the 24th of August will demonstrate this quite clearly.

Regards,

EIBusiness



Aer Lingus - Per Sempre
User currently offlineBrianDromey From Ireland, joined Dec 2006, 3901 posts, RR: 9
Reply 8, posted (3 years 9 months 3 weeks 1 day 17 hours ago) and read 3476 times:

I think EI dos have a future, but not in the current size and shape. It is far too reliant on the outbound Irish holiday maker. More needs to be done to capture business travel. The long-haul (really medium haul) network burns cash, particularly in winter and the product, while better than it was is lack-luster, at best in Y. Nothing seems to make the long-haul network profitable, I doubt A359's will do much to help either.

Quoting kaitak (Reply 6):
LGW has been wound down (it should never have been started),

I think LGW could have been a very good move for EI, had it worked. It was launched at the wrong time and EI could not afford to subsidise its losses to get it established. EI is much better positioned to take advantage of opportunities at LGW than BA is and it took over many ex-BA routes. I think had EI been a oneworld member LGW might have worked a bit better, in terms of capturing the ex-BA passenger. The idea behind it was a solid one, the Irish market on it's own is too small. EI needed a strong partner to bring traffic, like it has on IAD-MAD.



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 offlineAirNZ From , joined Dec 1969, posts, RR:
Reply 9, posted (3 years 9 months 3 weeks 1 day 15 hours ago) and read 3320 times:

Quoting airborne1 (Reply 1):
Air lingus, will just keep wet leasing planes to united and outsourcing crews

What wet lease and outsourcing of crews are you talking about......they don't do it now so how do come to the 'conclusion' that they will 'keep on doing it'? BTW it's Aér Lingus.


User currently offlinebestwestern From Hong Kong, joined Sep 2000, 6957 posts, RR: 57
Reply 10, posted (3 years 9 months 3 weeks 1 day 15 hours ago) and read 3279 times:

Quoting BrianDromey (Reply 8):
It is far too reliant on the outbound Irish holiday maker. More needs to be done to capture business travel.

If you go back ten years, thats all EI focused on. Remember the days when they had two frequencies a week to Spain, and only in summer?



The world is really getting smaller these days
User currently offlineEIBusiness From Ireland, joined Feb 2010, 629 posts, RR: 7
Reply 11, posted (3 years 9 months 3 weeks 1 day 15 hours ago) and read 3252 times:

Quoting BrianDromey (Reply 8):
I think EI dos have a future, but not in the current size and shape. It is far too reliant on the outbound Irish holiday maker. More needs to be done to capture business travel. The long-haul (really medium haul) network burns cash, particularly in winter and the product, while better than it was is lack-luster, at best in Y. Nothing seems to make the long-haul network profitable, I doubt A359's will do much to help either.

Hi Brian,

I would very much agree that EI needs to do more to capture business travel, but I think that they have made some decent efforts in this regard in the past 18 months. Immediate improvements which come to mind include full updating of the Transatlantic Business cabins and the introduction of the Flexible fare option - which is an excellent source of revenue generation also.

I don't know if the Long Haul network is now burning cash as much as you suggest. Even with the previous cost base, I believe that all routes were periodically profitable. The problem with the USA being the sole destination of the Long Haul network is that a good portion of the traffic will indeed be seasonal. Historically, Aer Lingus have always found it difficult to fill seats on their USA flights from the 2nd week of January through early March.

I don't know if the product is lack-luster in Y either. The AVOD system is one of the best, probably the best in Y ex Ireland to the USA. However, the soft aspects to the product including the meal service could certainly do with improvement. Items to mind include the ''breakfast'' on Eastbound East coast flights and the general meal options in Y. Overall though, I would still rate EI T/A Y pretty good.

The key to making the Long Haul network profitable may well be the consoldiation of the cost base. By December of this year, we will certainly know if this is the case.

Regards,

EIBusiness



Aer Lingus - Per Sempre
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