Aer Arann
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You're right that there are increased charges - the PSOs are in large part the delivery mechanism for state funding to regional airports. But the airline bidding for the PSO is allowed and expected to show a modest profit level over and above the operating costs (and remember, the state is the one who's paying.) Furthermore, if (hypothetically) an airline has a PSO contract for 3 round trips per day from Galway to Dublin and takes (perfectly logical) advantage of that to schedule a 4th round trip at a peak time using the same aircraft and crew (operating at non-PSO charge levels), it certainly is benefitting from the base of the PSO. Or if it doesn't do a 4th Galway-Dublin but instead a Galway-Manchester or Galway-Edinburgh or something else, on a marginal basis because the full costs of aircraft and crew have already been borne by the PSO contract, are you really telling me that the airline gains no advantage from the PSO?
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Originally Posted by Cyrano
Sorry, but this is not the case. If the increased charges offset any profit, then what's the point of an airline bidding for a PSO?
You're right that there are increased charges - the PSOs are in large part the delivery mechanism for state funding to regional airports. But the airline bidding for the PSO is allowed and expected to show a modest profit level over and above the operating costs (and remember, the state is the one who's paying.)
You're right that there are increased charges - the PSOs are in large part the delivery mechanism for state funding to regional airports. But the airline bidding for the PSO is allowed and expected to show a modest profit level over and above the operating costs (and remember, the state is the one who's paying.)
Originally Posted by Cyrano
Furthermore, if (hypothetically) an airline has a PSO contract for 3 round trips per day from Galway to Dublin and takes (perfectly logical) advantage of that to schedule a 4th round trip at a peak time using the same aircraft and crew (operating at non-PSO charge levels), it certainly is benefitting from the base of the PSO.
I'm just making the point that most routes aren't reliant on the PSO routes as base to not only operate, but also be profitable.
Originally Posted by Cyrano
Or if it doesn't do a 4th Galway-Dublin but instead a Galway-Manchester or Galway-Edinburgh or something else, on a marginal basis because the full costs of aircraft and crew have already been borne by the PSO contract, are you really telling me that the airline gains no advantage from the PSO?
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You know well what I meant. If an airline bids €10m for a PSO contract and gets it, its not making €10m. It'll make a small profit from that, but a lot of that money is as you say the delivery mechanism for state funding to the regional airports by way of increased airport charges.
I never said some routes weren't reliant on the PSO routes to operate, and I even highlighted an example of where this was the case...
I'm just making the point that most routes aren't reliant on the PSO routes as base to not only operate, but also be profitable.
No I never said that actually if you read my reply...
I never said some routes weren't reliant on the PSO routes to operate, and I even highlighted an example of where this was the case...
I'm just making the point that most routes aren't reliant on the PSO routes as base to not only operate, but also be profitable.
No I never said that actually if you read my reply...
My general concern is that if (e.g.) 4 aircraft are used on PSO routes and (e.g.) 6 are used on non-PSO routes, then the disappearance of the PSO routes is going to end up pushing up the overhead costs for the remaining aircraft (even if they are doing entirely different flying). The central functions (+ spares pool, etc) won't shrink proportionally with the fleet.
C.
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Rumour has it's there's a make or break meeting on Wednesday. A potential buyer on the cards. With talk of closure if it doesn't work out. Heard that several FOs have been let go too?
WRT FOs being let go, you heard wrong Im glad to say. Hogg
WRT FOs being let go, you heard wrong Im glad to say. Hogg
PPRuNe Secret Agent!
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Court hearing was today, from RTE website timed at 1256:
The High Court has been told that the regional airline Aer Arann could return to profitability next year.
The Court has appointed an examiner to the airline after receiving a report of the interim examiner appointed last month.
The Court was told that the interim examiner was 'broadly optimistic' about the prospects for the survival of the company.
It was also revealed that 11 different parties have expressed interest in investing in the airline.
The airline, which has 320 employees, will continue to operate under court protection. Lawyers for the airline said the examinership period may only last 50 days.
Key to the survival of the company will be equity investment, the continuing support of its bank and suppliers and the continuation of the operation and expansion of a franchise arrangement with Aer Lingus on its regional services.
The Court was told that the recent decline of the airline's business was mainly due to the volcanic ash cloud, which accounted for losses of €4.5m this year.
The Court has appointed an examiner to the airline after receiving a report of the interim examiner appointed last month.
The Court was told that the interim examiner was 'broadly optimistic' about the prospects for the survival of the company.
It was also revealed that 11 different parties have expressed interest in investing in the airline.
The airline, which has 320 employees, will continue to operate under court protection. Lawyers for the airline said the examinership period may only last 50 days.
Key to the survival of the company will be equity investment, the continuing support of its bank and suppliers and the continuation of the operation and expansion of a franchise arrangement with Aer Lingus on its regional services.
The Court was told that the recent decline of the airline's business was mainly due to the volcanic ash cloud, which accounted for losses of €4.5m this year.
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What 11 nut jobs want to invest in an airline!!!
As Shamrogue said hopefully it will bring refreshed help. Lets be positive and leave the running of RE to its own management.Hogg
As Shamrogue said hopefully it will bring refreshed help. Lets be positive and leave the running of RE to its own management.Hogg
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Aer Arann is in BIG danger
Hi,
I heard this company is full of debts and will soon be out of business.
Strange to notice that nobody's talking about it on this forums.
I heard this company is full of debts and will soon be out of business.
Strange to notice that nobody's talking about it on this forums.
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Things are more positive in light of yesterday's proceedings:
FOURTEEN GROUPS have expressed an interest in investing in Aer Arann and the examiner hopes to have secured a deal for the airline by October 10th, the High Court has been informed.
In a report submitted to the court, Michael McAteer of Grant Thornton, who was confirmed as examiner of the airline yesterday by Ms Justice Finlay Geoghegan, states that indicative offers must be lodged on September 20th while final offers will have to be presented on October 6th.
The examiner said he wants to run the investment process over a “tight timeframe” in light of “cash constraints within the business”.
A scheme of arrangement would then be put to creditors, with a meeting of creditors pencilled in for October 15th.
Any agreement would be subject to the High Court’s approval.
Mr McAteer’s report states that Aer Arann had met all its “forecast targets” for this year until the airspace closures in April caused by the volcanic ash.
Judge Finlay Geoghegan confirmed Mr McAteer as examiner after considering reports to the effect that the company had a reasonable prospect of survival if certain measures were taken.
Declan Murphy, counsel for the airline, told the court that Comh-fhorbairt Gaillimh, the company that operates Aer Arann, employed 320 people and it was in the interests of both creditors and employees that a scheme of arrangement be set up to protect the company into the future.
He said despite making a profit of more than €4.4 million in 2007, the airline, which leases 13 aircraft, had lost about €6 million in each of the three years since.
While it had implemented costsaving measures and was acting as a franchisee of Aer Lingus, the airline had been hampered by the global downturn and losses incurred when flights were grounded due to the volcanic ash crisis. The court heard that creditors included AIB, which was owed €3.9 million; the Revenue Commissioners; Dublin Airport Authority; Aer Lingus; and the Irish Aviation Authority.
AIB has already made €600,000 available to the airline and offered an additional facility of €1 million if required.
Rossa Fanning, counsel for the examiner, said Mr McAteer had to report again to the court within 35 days and this would bring the matter up to within four days of the new law term.
He was granted an extension until October 11th to present the examiner’s next report
In a report submitted to the court, Michael McAteer of Grant Thornton, who was confirmed as examiner of the airline yesterday by Ms Justice Finlay Geoghegan, states that indicative offers must be lodged on September 20th while final offers will have to be presented on October 6th.
The examiner said he wants to run the investment process over a “tight timeframe” in light of “cash constraints within the business”.
A scheme of arrangement would then be put to creditors, with a meeting of creditors pencilled in for October 15th.
Any agreement would be subject to the High Court’s approval.
Mr McAteer’s report states that Aer Arann had met all its “forecast targets” for this year until the airspace closures in April caused by the volcanic ash.
Judge Finlay Geoghegan confirmed Mr McAteer as examiner after considering reports to the effect that the company had a reasonable prospect of survival if certain measures were taken.
Declan Murphy, counsel for the airline, told the court that Comh-fhorbairt Gaillimh, the company that operates Aer Arann, employed 320 people and it was in the interests of both creditors and employees that a scheme of arrangement be set up to protect the company into the future.
He said despite making a profit of more than €4.4 million in 2007, the airline, which leases 13 aircraft, had lost about €6 million in each of the three years since.
While it had implemented costsaving measures and was acting as a franchisee of Aer Lingus, the airline had been hampered by the global downturn and losses incurred when flights were grounded due to the volcanic ash crisis. The court heard that creditors included AIB, which was owed €3.9 million; the Revenue Commissioners; Dublin Airport Authority; Aer Lingus; and the Irish Aviation Authority.
AIB has already made €600,000 available to the airline and offered an additional facility of €1 million if required.
Rossa Fanning, counsel for the examiner, said Mr McAteer had to report again to the court within 35 days and this would bring the matter up to within four days of the new law term.
He was granted an extension until October 11th to present the examiner’s next report
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11 nuts don't want to invest. There will be lots of airlines and leasing companies on fishing expeditions to get the inside information that will be useful if the make an offer or not.
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Even here on Fraggle Rock the news headlines are about Billions going into Irish banks and our minister forecasting calamity and a double dip recession in Ireland. What news on Arran buyout? we need our LCY service.
Today (Oct 6th) is the deadline for offers/proposals from those interested in investing in Aer Arann.
According to yesterdays Irish Independent, there are 3 contenders.
The very best of luck to all in RE.
JAS
According to yesterdays Irish Independent, there are 3 contenders.
As many as 14 expressions of interest were originally received by the examiner, Michael McAteer of accountancy firm Grant Thornton, but the list was eventually whittled down to three (click for story).
The very best of luck to all in RE.
JAS
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And then there was "really" one
Ó Céidigh part of Aer Arann rescue bid
In this section - from the Irish Times
AER ARANN looks set to be taken over by a group comprising its current owner Pádraig Ó Céidigh and an overseas listed company.
It is understood that the airline’s examiner is in the final stages of negotiations with the parties about a multi-million-euro investment package into the cash-strapped regional airline.
This is likely to be presented to the High Court on Monday for approval. A scheme of arrangement would then be put to the company’s creditors.
If given the green light, this investment would save up to 300 jobs at the ailing airline.
In spite of making a profit of more than €4.4 million in 2007, Aer Arann, which leases 13 aircraft, has lost about €6 million in each of the three years since.
Final bids for Aer Arann were received earlier this week and it is understood that three parties submitted offers.
A spokesman for Aer Arann confirmed yesterday that a “preferred bidder” was likely to be chosen by Monday. “The examiner will then go back to the court and present his plan,” he added.
The spokesman declined to comment further.
Neither Mr Ó Céidigh nor the examiner, Michael McAteer of Grant Thornton, could be reached for comment yesterday.
The identity of the listed company that has offered to take control of Aer Arann is not clear.
Mr Ó Céidigh, a Galway native, had previously considered putting together a bid in conjunction with other Irish businessmen, including Kerry entrepreneur Jerry Kennelly. But this plan did not materialise and Mr Ó Céidigh has since linked up with the listed company.
It is believed that the Irish entrepreneur will have an equity stake in Aer Arann if the bid is successful. But it is not clear if he will retain his role as chairman.
Aer Arann was placed into examinership in August. It recorded losses of €6 million in the first seven months of this year and was in danger of running out of cash.
Its biggest creditor is AIB, which is owed €3.9 million. It also owes just under €2 million to the Dublin Airport Authority in aeronautical fees.
Aer Arann’s difficulties come in spite of a strong start to its regional service with Aer Lingus to regional airports in Britain.
This has carried more than 100,000 passengers since its launch on March 28th. Aer Lingus receives a franchise fee for every flight flown.
In this section - from the Irish Times
AER ARANN looks set to be taken over by a group comprising its current owner Pádraig Ó Céidigh and an overseas listed company.
It is understood that the airline’s examiner is in the final stages of negotiations with the parties about a multi-million-euro investment package into the cash-strapped regional airline.
This is likely to be presented to the High Court on Monday for approval. A scheme of arrangement would then be put to the company’s creditors.
If given the green light, this investment would save up to 300 jobs at the ailing airline.
In spite of making a profit of more than €4.4 million in 2007, Aer Arann, which leases 13 aircraft, has lost about €6 million in each of the three years since.
Final bids for Aer Arann were received earlier this week and it is understood that three parties submitted offers.
A spokesman for Aer Arann confirmed yesterday that a “preferred bidder” was likely to be chosen by Monday. “The examiner will then go back to the court and present his plan,” he added.
The spokesman declined to comment further.
Neither Mr Ó Céidigh nor the examiner, Michael McAteer of Grant Thornton, could be reached for comment yesterday.
The identity of the listed company that has offered to take control of Aer Arann is not clear.
Mr Ó Céidigh, a Galway native, had previously considered putting together a bid in conjunction with other Irish businessmen, including Kerry entrepreneur Jerry Kennelly. But this plan did not materialise and Mr Ó Céidigh has since linked up with the listed company.
It is believed that the Irish entrepreneur will have an equity stake in Aer Arann if the bid is successful. But it is not clear if he will retain his role as chairman.
Aer Arann was placed into examinership in August. It recorded losses of €6 million in the first seven months of this year and was in danger of running out of cash.
Its biggest creditor is AIB, which is owed €3.9 million. It also owes just under €2 million to the Dublin Airport Authority in aeronautical fees.
Aer Arann’s difficulties come in spite of a strong start to its regional service with Aer Lingus to regional airports in Britain.
This has carried more than 100,000 passengers since its launch on March 28th. Aer Lingus receives a franchise fee for every flight flown.
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Just what the aviation world needs. The failed teacher runs his business into the ground then gets a lifeline, his creditors face losses and he carries on where he left off minus presumably some of his stake in the group. Good to see that nepotism is still alive and well in Ireland. I actually thought that the administrator would have gotten a fresh set of faces in but it would appear not.
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Yes it is very disappointing if O'Ceidigh gets his hands on it again, seemingly he's not going to change a thing, which means in 2-3 years time AerArann will be back in the same situation. The company needs a clean out from the top down, its very top heavy, and management seem to hide/cover up their failings from Shultz, who seems to be doing a good job, He could probably do a great job had he all the facts, but certain people wont allow them to be brought to light. Sad really used to be a nice company. But I suppose its the Irish way.....
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Originally Posted by potkettleblack
Just what the aviation world needs. The failed teacher runs his business into the ground then gets a lifeline, his creditors face losses and he carries on where he left off minus presumably some of his stake in the group. Good to see that nepotism is still alive and well in Ireland. I actually thought that the administrator would have gotten a fresh set of faces in but it would appear not.
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Glad to see the culture of brown envelopes stuffed into someones pockets is still alive and well in Ireland.
Oh in a few years time im sure we will have another trip to Dublin Castle for some tribrunial into this one!!!
I think this is going to get messy now, very very messy!!
Oh in a few years time im sure we will have another trip to Dublin Castle for some tribrunial into this one!!!
I think this is going to get messy now, very very messy!!