There is no way that the EU is going to allow FR to be the sole carrier(effectively) out of Dublin. The thought of having only FR to travel on, with their appalling service and complete indifference to their customers is a vista I can only fear
The reality is that on many many routes Ryanair is the only carrier operating eg Leeds, Luton, Stansted, Bristol etc. etc.
I would agree that Aer Lingus has a major challenge ahead with loco competitors especially Ryanair at Dublin. Ryanair apart from being lower cost than EI, it could afford to burn cash in losses for alot longer than EI.
In making itself as similar as Ryanair as possible to be more competitive Aer Lingus has left itself so truly exposed. Aer Lingus needs to have strengths to lever. IE gets its act together and get good at stuff that Ryanair cant touch. EG 1 Shake up the long haul, make it a focus and point of difference, do a Air Asia style service on the atlantic and to this side of Asia. Offer a premium economy with the frills and sell low prices on the rest of the flight. Get smaller aircraft onto regional routes, I would agree with Akerosid on this fully. Flybe for me is a good example of an airline fit to compete with larger airlines and a small fuel efficient aircraft is the way to do it. Drive perception, costs and frequency.
Aer Lingus could cause some pain for Ryanair in this way.
I really like Aer Lingus and want to see them being around in 5 years but sadly right now where ever they turn there have a strong competitor to contend with. Ryanair and Easyjet.
Aer Lingus needs to be different than the pack with which it competes. The Irish perceive AL to be different ie in service terms but that has taken decades to build up and it will take a long time to build this up ex say LGW.