Virginblue - just picking up on your last point - exactly if RE didn't operate the PSO's then someone else would, and what makes a PSO viable from a public coffers point of view - well thats up to the elected officials to decide.. the point being that RE is much more that PSO's it's part of the business yes but there's more to it than that.
On a general point, i wish people would consider the value Aer Arann offers not just in terms of pricing - to my mind they are competitive - but I mean in terms of what they do and where they fly.
THe big boys are not interested in regional flying in Ireland. Sorry, but EI & FR both demonstrated that by changing business models completely. Aer Arann fits nicely into a niche, and that's something that EI have now recognised and supported again - but it's not EI's speciality - EI is the international beast, RE is the local one. Play to strengths.
Aer Arann and it's people are great at what they do, beit in Aer Arann or Aer Lingus uniforms. But, the ownership is what counts I think - if your focus is regional flying that's your bread and butter, by regional i mean domestic and short haul local airports, if you're an international carrier then bigger things come to play.
The idea of EI going back on its model to own a regional operation, would seem like a complete about-turn.. The current relationships seem to work - perhaps it's a recession induced cashflow problem most of all..