Hi all,
Just to re-iterate my point, pulling out of LGW demonstrates that EI cannot sustain a base outside of Ireland. This has massive implications for the future of Aer Lingus. If they weren't able to sustain the base in LGW, they have no hope of sustaining one in Europe. EI now have a massive problem on their hands, the only way they can reliably grow is by growing their Irish bases. I respect Aer Lingus management for trying the Gatwick base as quite simply, they have no decent alternative growth path. At least they've shown they're willing to cut a base when it isn't giving a return.
Aer Lingus management now have serious strategic questions to deal: -
1. How do they maintain and hopefully grow their passenger numbers and yield? Ryanair, Easy Jet etc. have done this through opening bases and Aer Lingus attempted this also. The LGW experiment hasn't worked so we now must rule out the the UK as a base of operations and they don't have a chance in Europe due to lack of brand recognition etc.. If it didn't work at LGW, I don't see how it could work elsewhere in the UK as FR will simply establish a base with the sole purpose of running Aer Lingus out.
2. What are they going to do to deliver a return to shareholders to keep them interested? We all know about the ESOT, DoT and Ryanair shareholdings but there's another ~30% of the company held in private hands and Hr. Mueller and his team need to keep these people as shareholders. If they don't Ryanair will buy up the shares and it's game over for EI.
All the best,
P2C.