You could be right. But with the fairly rapid expansion of EI’s long haul fleet (narrow and wide body) due to continue over the next few years, I don’t think you can say that EI will be wound up and I don’t see what brand it would be rolled into. Whilst LHR is capacity constrained, it will also remain useful for IAG to get regional U.K. pax onto IAG TATL services.
Fleet plans can change VERY quickly. IAG sees EI and Level as their internal LCCs to take on mostly Norwegian. I don't think EI is really an LCC, but perhaps they think relative to BA and IB it is an LCC. Whatever the case, they can very easily divert those planes to another unit and retire older planes so that capacity is more flat. So the fleet plan means little. I think it really comes down to what happens with the remaining LCCs on the Atlantic. It's possible B6 will be enough to keep IAG interested in this side of the business, but I don't think B6 is really going to be offering LCC pricing. I think it'll be more like $1k RT from BOS/JFK to Europe in coach which is cheap-ER, but not cheap at the level that Norwegian or WW or the other failed carriers were at. I'm not sure that pricing level is so threatening that IAG will feel the need to keep up the capacity pressure. Same with FI. With WW now gone I see them also slowing their growth. Again, I don't like any of this, but this is what you do when competition goes away. You stop growing capacity and grow RASM/profits instead.
Looking at Level's performance, I think the knife falls there very soon after Norwegian makes clear how much the new CEO is going to pull back the growth on Atlantic.
I'd strongly disagree that IAG see Aer Lingus as their LCC to take on Norwegian, Level is a different matter.
IAG pursued Aer Lingus for a variety of reasons, and long before Norwegian became really topical. These reasons include things such as excellent location on the transatlantic map, lean cost base and more strategically the ability for Dublin to link the UK regions with north America, thus taking pressure off LHR. Under IAG Aer Lingus has clearly defined itself as a value carrier and not as distinct from an LCC. During Norwegian's time in Ireland Aer Lingus has been more successful than ever. Ireland is booming and in terms of business traffic as well connecting services over Dublin (into UK and EI) and through the US gateways (UA, B6) - these put Aer Lingus in a much different arena to Norwegian. So much so Norwegian is of little consequence.
Aer Lingus also comfortably responded to Norwegian when it entered the fray, by introducing unbundled fares and competitive types of fares to be defend its patch.
The diaspora continues to be a strong driver in the Aer Lingus TA business, and an important part of the business. This diaspora is strong and all carriers to Ireland see huge benefits in this space. You can see the enormity of transatlantic services every day to an island of circa only 6.25M inhabitants ... so VFR is growing an important.
Level is another story entirely, and I'd agree with you that IAG see that as the vehicle to challenge Norwegian. I'd go as far as saying that is very v much on hold and in limbo until the Norwegian puzzle is clearer through an IAG lens.
Moreover, it seems and Willie Walsh has said as much publically; LCC on the long haul has been proven, it's going to be around, though Norwegian is loss, making they've proven that demand exists and if their model can be fine tuned it'll work. Little wonder Lufthansa group and IAG have been sniffing around it.
I agree with everything you say. I think the crucial point here is the geographic location. Many years ago, Ireland had a crazy aviation policy called the "Shannon stopover", which meant that all t/a flights from Dublin had to stop at SNN; it was nuts and it held back DUB - and Aer Lingus - for many years. Our US bilateral was very restrictive and our Canadian bilateral was so restrictive that for many years, there were no scheduled flights at all between the two. The Irish wanted to protect SNN, the Canadians YUL ... and airlines said "get stuffed". So, what is happening now is something that should have happened years ago. Several points now favour DUB as a hub:
- The right aircraft. EI was the first t/a carrier with the A330 some 24 years ago; it's been a big part of its success. Now the A321LR and more recently the A321LRX offer the opportunity to cover pretty much all of Canada and "The Lower 48" (even ANC too, actually) ... a range ring from DUB covers pretty much the whole of the US bar San Diego (sorry!).
- Geopolitics: as the UK has shot itself in the foot over Brexit, Ireland will be the only English speaking EU country. It's a stable place to do business, strong cultural and business links, a great place to visit whether for business of leisure, so an ideal place for anyone wanting a stop off to anywhere in Europe. Also, while the US might lock horns with France, the UK (wait for the trade talks post-Brexit) and Germany, relations with Ireland are pretty much always cordial. We are also pretty much the only country in the EU with immigration and customs pre-clearance.
- For US airports, Aer Lingus is probably the first "go to" airline. Those as yet unserved know the potential of the A321LR/LRX and they know the value of DUB as a hub. Again, as stated above, the A321LR can reach pretty much anywhere in the US from DUB. The A321 is like the tip of a spear; it is the instrument with which a new route is opened and EI will then develop it and then, in time (hopefully move to something larger, i.e. the A330), while the A321s are then used to explore new markets.
So, in summary, I don't believe that EI was intended to be IAG's weapon to fight off Norwegian; EI has advantages that DY/D8 can only dream of - natural (location) and strategic (aircraft type). I think, if anything, Level is intended as a kind of stick for other airlines in the IAG group - "if you don't meet our cost base targets, Level will come in and take over routes from you"; EI has been threatened - and remains threatened - with Level coming in and some of those A321s being transferred to Level! (It kind of reminds me of Stalin's practice of having batallions behind the front line, to shoot any of the front line troops who tried to retreat!)