Aer Lingus - 5
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Just how bad is the A318?
Do the fuel-burn and increased landing charges completely wipe out any potential gains from not having to get things like type ratings sorted out?
Do the fuel-burn and increased landing charges completely wipe out any potential gains from not having to get things like type ratings sorted out?
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EI fleet
In the early part of the decade airlines became obsessed with standardising their short haul fleet. This was the model that FR and Air Southwest adopted.
The downside is that there is then no means of providing smaller capacity on thinner routes.
The downside is that there is then no means of providing smaller capacity on thinner routes.
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Empirical evidence from the world fleet:
Number of airlines operating:
A321: 66 airlines, 522 aircraft
A320: 173 airlines, 2025 aircraft
A319: 89 airlines, 1118 aircraft
A318... 6 airlines, 57 aircraft (7 and 59 if you count BA's 2 impending LR aircraft)
The A318 is the second lowest-selling Airbus (after the A340-500). Lots of airline finance departments' Excel sheets giving similar answers...
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Hi,
Maybe in wrong forum but I'll press on anyway.
Had the great experience of flying with AET on an A330 to Rome on the 1st August.
Since I had prebooked seats 1a and 1b I had the unique privilege of turning left on boarding.
Anyone know why I was blessed.
I'll tell you,it was pretty good and who knows what famous posteriors had occupied 2a and 2c (as it turned out).
Caio, and apologies if this doesn't fit
Maybe in wrong forum but I'll press on anyway.
Had the great experience of flying with AET on an A330 to Rome on the 1st August.
Since I had prebooked seats 1a and 1b I had the unique privilege of turning left on boarding.
Anyone know why I was blessed.
I'll tell you,it was pretty good and who knows what famous posteriors had occupied 2a and 2c (as it turned out).
Caio, and apologies if this doesn't fit
Join Date: Oct 2007
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Hi all,
The B737 classics have a significant maintenance burden so the benefits of having a smaller aircraft could be wiped out by the additional maintenance costs. Added to this, EIN's adoption of the A321 in the late 90's would have resulted in split crews and also having to hold parts etc. to service two separate fleets.
While LH use 737 classics on short haul routes, they also have a significant number of the A320 family. The 737's have a high maintenance equirement and based on LH's outstanding orders for A319/320/321 aircraft, we could well see the 737 classics depart the fleet in the not too distant future.
With regard to acquiring a lower capacity aircraft there's a number of things to consider: -
1. How do they finance them? (Recently an issue which saw the A330 deliveries pushed out). Even leasing the aircraft will have an impact on the balance sheet.
2. Can they downsize the A320 fleet sufficiently and quickly enough to not end up with even more additional capacity? Early lease termination would bring significant penalties and selling the a/c they own would return lower values due to the amount of A/C available.
3. Unless it's an A318/319 aircraft, then there's significant capital expenditure in terms of spare parts purchase, crew training and maintenance crew training....again another cash impact on the balance sheet.
At the moment, I think EIN would be mad to start down this route. They need to stabilise with the current fleet and take a strategic view of what they want the airline to look like in 10 - 20 years. Once they've done this, then it's time to look at what fleet they need to realise that vision.
Just my two cents...
P2C
The B737 classics have a significant maintenance burden so the benefits of having a smaller aircraft could be wiped out by the additional maintenance costs. Added to this, EIN's adoption of the A321 in the late 90's would have resulted in split crews and also having to hold parts etc. to service two separate fleets.
While LH use 737 classics on short haul routes, they also have a significant number of the A320 family. The 737's have a high maintenance equirement and based on LH's outstanding orders for A319/320/321 aircraft, we could well see the 737 classics depart the fleet in the not too distant future.
With regard to acquiring a lower capacity aircraft there's a number of things to consider: -
1. How do they finance them? (Recently an issue which saw the A330 deliveries pushed out). Even leasing the aircraft will have an impact on the balance sheet.
2. Can they downsize the A320 fleet sufficiently and quickly enough to not end up with even more additional capacity? Early lease termination would bring significant penalties and selling the a/c they own would return lower values due to the amount of A/C available.
3. Unless it's an A318/319 aircraft, then there's significant capital expenditure in terms of spare parts purchase, crew training and maintenance crew training....again another cash impact on the balance sheet.
At the moment, I think EIN would be mad to start down this route. They need to stabilise with the current fleet and take a strategic view of what they want the airline to look like in 10 - 20 years. Once they've done this, then it's time to look at what fleet they need to realise that vision.
Just my two cents...
P2C
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They need to stabilise with the current fleet and take a strategic view of what they want the airline to look like in 10 - 20 years
This scenario is not pie in the sky but very much a picture that could unfold.
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Hi Bearcat,
I agree, it would be very undesirable scenario. However, provided they maintain a decent balance sheet, they have options available to them.
I think it would be interesting to see if AF or LH have actively considered a purchase. LH in particular has been active lately with Swiss, BMI and Austrian on the way..
Cheers,
P2C
I agree, it would be very undesirable scenario. However, provided they maintain a decent balance sheet, they have options available to them.
I think it would be interesting to see if AF or LH have actively considered a purchase. LH in particular has been active lately with Swiss, BMI and Austrian on the way..
Cheers,
P2C
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"With regard to acquiring a lower capacity aircraft there's a number of things to consider: -
1. How do they finance them? (Recently an issue which saw the A330 deliveries pushed out). Even leasing the aircraft will have an impact on the balance sheet.
2. Can they downsize the A320 fleet sufficiently and quickly enough to not end up with even more additional capacity? Early lease termination would bring significant penalties and selling the a/c they own would return lower values due to the amount of A/C available.
3. Unless it's an A318/319 aircraft, then there's significant capital expenditure in terms of spare parts purchase, crew training and maintenance crew training....again another cash impact on the balance sheet.
At the moment, I think EIN would be mad to start down this route. They need to stabilise with the current fleet and take a strategic view of what they want the airline to look like in 10 - 20 years. Once they've done this, then it's time to look at what fleet they need to realise that vision."
I think you make very good and valid points, P2C, but on the flip side, if they continue to operate A320s only, they risk being run out of key markets. Sure, the A320 is a very fine aircraft, but look at the UK market since EI became a 320 airline; major routes like BHX and MAN have gone very much down in frequency, whereas other markets have been exited completely. Remember, back in the early 1990s, when EI used to operate F50s and they used to have a very wide UK network; if they are serious about making DUB an effective hub, then they need to look at how they can stop getting pushed out of markets. Having "commonality" provides advantages, sure, but it doesn't prevent this.
While there would be costs associated with introducing a new type, this would (a) allow them to maintain frequencies/services to marginal markets, (b) increase frequencies in some existing markets, particularly timed to feed hub services, (c) - most importantly - have an aircraft which can compete more effectively with FR. I'm just not convinced - as much as I admire the 320/321 - that this fleet mix allows EI to do this as effectively as it should.
1. How do they finance them? (Recently an issue which saw the A330 deliveries pushed out). Even leasing the aircraft will have an impact on the balance sheet.
2. Can they downsize the A320 fleet sufficiently and quickly enough to not end up with even more additional capacity? Early lease termination would bring significant penalties and selling the a/c they own would return lower values due to the amount of A/C available.
3. Unless it's an A318/319 aircraft, then there's significant capital expenditure in terms of spare parts purchase, crew training and maintenance crew training....again another cash impact on the balance sheet.
At the moment, I think EIN would be mad to start down this route. They need to stabilise with the current fleet and take a strategic view of what they want the airline to look like in 10 - 20 years. Once they've done this, then it's time to look at what fleet they need to realise that vision."
I think you make very good and valid points, P2C, but on the flip side, if they continue to operate A320s only, they risk being run out of key markets. Sure, the A320 is a very fine aircraft, but look at the UK market since EI became a 320 airline; major routes like BHX and MAN have gone very much down in frequency, whereas other markets have been exited completely. Remember, back in the early 1990s, when EI used to operate F50s and they used to have a very wide UK network; if they are serious about making DUB an effective hub, then they need to look at how they can stop getting pushed out of markets. Having "commonality" provides advantages, sure, but it doesn't prevent this.
While there would be costs associated with introducing a new type, this would (a) allow them to maintain frequencies/services to marginal markets, (b) increase frequencies in some existing markets, particularly timed to feed hub services, (c) - most importantly - have an aircraft which can compete more effectively with FR. I'm just not convinced - as much as I admire the 320/321 - that this fleet mix allows EI to do this as effectively as it should.
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10-20 year plan my hat.
a 3 yr plan is I think the stark reality
From Bloxham broker report today...
• Weekend media reports suggest Aer Lingus is close to a “huge” cost-cutting package which
will probably be released when the new CEO takes up office in early September. The article
identifies financing pressures as one of the factors behind the plan as banks are reluctant to
finance aircraft with the airline.
• Aer Lingus needs to respond aggressively to a rapid deterioration in its operating
environment and the prospect of heavy financial losses in both 2009 and 2010. Recent
reports cited comments from the group Chairman that costs of at least €130m had to be
removed from the company, implying about 13% of ex-fuel costs. Even that level of cost
reduction would leave an operating loss in 2009, which underscores the urgency for change.
Aer Lingus reports interim results on August 27th.
a 3 yr plan is I think the stark reality
From Bloxham broker report today...
• Weekend media reports suggest Aer Lingus is close to a “huge” cost-cutting package which
will probably be released when the new CEO takes up office in early September. The article
identifies financing pressures as one of the factors behind the plan as banks are reluctant to
finance aircraft with the airline.
• Aer Lingus needs to respond aggressively to a rapid deterioration in its operating
environment and the prospect of heavy financial losses in both 2009 and 2010. Recent
reports cited comments from the group Chairman that costs of at least €130m had to be
removed from the company, implying about 13% of ex-fuel costs. Even that level of cost
reduction would leave an operating loss in 2009, which underscores the urgency for change.
Aer Lingus reports interim results on August 27th.
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Bearcat, This was only in the Indo on Sunday. It was the usual rehash of old news and facts painting the usual biased opinion. Nothing new there at all, but interesting that you didn't give the reference.
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AerLingus heading for a merger
Job cuts of about 800-1000 employess will be unveiled in the coming weeks at Aerlingus.The task being handed to the newly appointed ceo mr christoph mueller.The axe man is looking to merge Aerlingus in the coming months as reality bites of an overstaffed loss making airline as it fights for survival in a cut throat market .Ba looks like a good partner for aerlingus as the lucrative heathrow slots can be utilised for longhaul .strong rumours from inside Aerlingus suggest that willy walsh may yet get his hand on the legacy carrier.
you heard it hear first
you heard it hear first
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The ( still seen as ) Irish national carrier in the clutches of the ( still seen as ) British flag carrier. Not particularly neutral at all that one (!)
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I love this expression "ring fenced". It keeps cropping up in management-speak bull**** propaganda , but I haven't a clue what it means (along with most other people I suspect) - if indeed it means anything at all. How, or indeed why, would/could anyone put a fence around a slot? Wouldn't a fence obstruct the runway/apron, or whatever other part of the airfield that a slot inhabits?
Anyone in the know care to elaborate (preferably in recognisable English, not management-speak...)
And as for asset striping - sounds very decorative! Laying them out in rows perhaps?
Anyone in the know care to elaborate (preferably in recognisable English, not management-speak...)
And as for asset striping - sounds very decorative! Laying them out in rows perhaps?