Originally Posted by Jack1985
I don't see how you're comparing like with like here, even with your example of Augsburg Airlines. It folded after LH ceased cooperation due to cost-cutting, LH merged its wholly owned assets (nearly all of Augsburg's fleet) into CityLine which made perfect sense.
You're right, it was due to cost-cutting but it was also as a result of a change in strategy whereby Lufthansa is now streamlining it's short-haul operations and transferring most of it's short-haul network to a newly-branded Germanwings. The franchise with Augsberg Airlines wasn't part of that future strategy and so it was discontinued.
Originally Posted by Jack1985
Also your examples of Aer Lingus Commuter and CityJet, both operate(d) less than economically viable fleets and are/were fully funded by their associated airline/owner e.g. Aer Lingus funded Commuter and Air France/KLM fund CityJet the latter for sale. Aer Lingus Regional is costing Aer Lingus nothing its making them money through the franchise fee, Aer Lingus are investing over €10m in this new fleet deal, it's clear they're committed and most definitely for the next 10 years.
I only mentioned Aer Lingus Commuter to highlight what can happen when airlines change their business model.
Also not once did I claim Aer Lingus wasn't benefitting from the franchise (just read back over my post and you'll see I actually highlighted the benefits). All I've done is highlight that there is a huge risk on Aer Arann's part by being 100% exposed to such a franchise for it's business. I just personally think there is a question mark over the sustainability of Aer Arann's business in the medium to long term.
Originally Posted by Angry Rebel
Of course EI can terminate if RE aren't meeting an agreed performance standard but they can't terminate on a whim. No business or airline would enter such an agreement as they would be left, with little notice, with aircraft and the whole airline infrastructure and absolutely nothing to do.
It wouldn't be on a whim though, they would have to give sufficient notice to the franchisee. Do you honestly think Aer Lingus would enter an agreement whereby they would tie themselves unconditionally to a franchisee for 10 years and have no way of backing out of it?