Aer Arann
It's very sad news regarding Aer Arann and their present situation - but the cold, hard reality is that the entity is not viable in it's current form. You can only keep accumulating losses for so long before the ''wolves come to the door'' so to speak - unless you have a very large cash base to support operations - which EI have demonstrated very well over the past two years.
The level of losses that have been recorded are completely unsustainable. While I understand that the Volcanic Ash situation impacted RE's operations and performance, it is not credible that €6 million in losses can be attributed directly to the crisis - this is completely disproportionate to those losses recorded by both EI and FR.
The company's forward revenue projections mentioned across the business media last week also seem a little optimistic.
We must not forget the human factor involved in this and the many people who are concerned for their jobs - but I find it difficult to see any other outcome than one in which RE as an overall entity is scaled down by at least 25%.
Management may be very informed and very pro-active and it's absolutely correct that huge efforts have gone into the company over the years - but who thought it sensible to acquire a 20 year lease on the Head Office building for example?
RE are ultimately another victim of the terrible economic crisis that continues to ravage this country. Sadly, domestic demand will remain depressed for years to come as continuous austerity measures are needed to service the sovereign debt that grows larger with every passing second. The risk of the IMF being called in and a general domestic hyper crisis grows larger with each passing day.
Any future RE operation will have to be leaner, capitalised and not dependant on PSO routes.
EI Premier