Hi all,
A couple of points from my point of view on the current state and future of Aer Lingus based on recent developments and the trading update issued today.
1. Hangar 6 debacle was a FR and Irish government debacle and Aer Lingus were right to stay as far out of the issue as possible.
2. The rate of cash burn at Aer Lingus has decreased dramatically. The delaying of aircraft delivereis to the 2011 to 2015 timeframe will aid this.
3. The airline made an operating profit of €12 million in the second half of this year. In Q4 alone (1/1/10 - 31/3/10), Ryanair are predicted to make a loss of c. €100 million based upon the Q3 results and the profit guidance given to the markets. Most of this loss is due to MOL's obsession with growth at the expense of yield and consequently shareholder value. Aer Lingus will instead maintains a stable fleet size and consequently won't need to drop yield as dramatically as FR does to maintain load factor.
4. Aer Lingus is finally being run by a chairman and chief executive with understanding of the business and a breadth of experience far higher than those who went before them. The background of Dermot Mannion, while no doubt a capable individual, was not suited to the Aer Lingus operation. Aer Lingus is a very different type of Emirates.
5. The recent vote with cabin crew along with the 230 redundancies is regrettable but demonstrates the airline will pursue its plans as it must to ensure its continued survival for the other staff working there.
6. Aer Lingus will never be Ryanair so let's just move on. Ryanair have their business model and Aer Lingus have another, this is common in industry. I amn't aware of posts daily denegrading Volkswagen for having a different business model to Dacia.
Aer Lingus will continue to operate and I believe the next 3 - 5 years will see the company develop in a mature and measured fashion. This will bring some reassurance to the markets, stabilise and increase the share price and bring some return for the shareholders, staff and travelling public. Most important of all, it will ensure there is continued competition at Ireland's gate-way airports.
Now....rant over.
All the best,
P2C.