I have to admit that I know very little about Aer Lingus and the current financial problems that they now face. I am sure, however, that they are driven by the same economic realities that every airline has to deal with. The profit margins in aviation, even in good times, are raisor thin. Airlines that survive the inevitable economic downturns are the ones that have the most cash on hand and the ones that can squeeze out the most revenue out of every seat, so called yield management. Bob Crandell at American Airlines pioneered this in the early 80's and almost singlehandedly used it to drive Peoples Express into bankrupcy and in to the hands of Frank Lorenzo and Texas Air corporation.
Related to yield is capacity. To much capacity not enough yield and we are back to square one. This is where the European carriers are at a huge dissadvantage. Through deregulation in the states the entire industry was forced to rationalize in to a few very large compettitors with a few low cost carriers existing on the fringes. Once proud airlines such as PanAm, Eastern, and Branniff ceised to exist all together because they failed to transform themselves in to lean competitors. Others such as Western, Southern, Hughes Airwest and Piedmont were forced in to merger.
No such transformation has been allowed to occur in Europe yet. The current situation where every country within the union is fiercly, through nationalistic pride, trying to hang on to their flagg carriers is destructive and anti competitive. Europe may in the end be able to sustain 4 large airlines and a few others that exist to feed their traffic. It is inevitable, and the quicker it is allowed to happen the better for all concerned. It will be extremly painful for all involved, as it was in the U.S. but it has to happen. Otherwize you might as well reregulate the whole business.
