Aer Lingus - 5
Surely the answer to alot of EI's woes would be a merger with another airline
- introduce new T&Cs
- gain more economies of scale
- access more transfer traffic
- lessen reliance on Irish market
- increase market share and reach
- gain more economies of scale
- access more transfer traffic
- lessen reliance on Irish market
- increase market share and reach
-Transfer traffic to/from where?
-Less reliance on the Irish market is a must, but a merger won't change that, sensible and cost effective (both for the airline and its customers) expansion will do that.
-I don't follow what you're getting at with the last point.
The big elephant in the room for EI with regard to a merger is simply; why would anyone want them?They have performance issues, they are based in a tiny market that is potentially the worst hit by the recession in Europe and they have long standing unresolved work practice issues amongst both the staff and management. The only airline to gain by gobbling up EI is FR and then only because they kill off a persistent competitor in one of their bases.
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Am I being thick here? The consensus seems to be that they need to be less reliant on their home market, however given that's an established legacy, it ought to be their strongest market! In the current climate, further foreign expansion is unlikely. Hence if they can't make Dublin profitable in the short to medium term, they're doomed, since if their home base is loss making, cut throat competition at Gatwick with the Orange monster isn't going to save them.
As for economies of scale.... well they operate an all Airbus fleet with short haul all of one type. What the Hell would the point of a merger be? If the current fleet and people cannnot make money then no amount of rebranding is going to help. No one wants to merge with them, Ryanair just want to buy them out and do a Buzz!
As to losing out to the big European players, well Aer Lingus is a small European based airline. To compare it with Air France / KLM, BA / Iberia or Lufty is comparing small apples with giant pears.
Increasing market share at this point can only be done by undercutting your rival. Who would that be? Ryanair and easyJet. Good luck with that.
I think Aer Lingus will survive, but it'll be a tough fight. The culture change required is only beginning.
As for economies of scale.... well they operate an all Airbus fleet with short haul all of one type. What the Hell would the point of a merger be? If the current fleet and people cannnot make money then no amount of rebranding is going to help. No one wants to merge with them, Ryanair just want to buy them out and do a Buzz!
As to losing out to the big European players, well Aer Lingus is a small European based airline. To compare it with Air France / KLM, BA / Iberia or Lufty is comparing small apples with giant pears.
Increasing market share at this point can only be done by undercutting your rival. Who would that be? Ryanair and easyJet. Good luck with that.
I think Aer Lingus will survive, but it'll be a tough fight. The culture change required is only beginning.
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I don't think they have a hope of getting new T&C's as is without more strikes etc. only getting a slight improvement from the companys perspective.
Transfer traffic would depend on the merger partner for example BA will route their South American traffic via Madrid feeding into Iberia's network.
Again depending on the partner the new merged entity would have a base or bases in other markets.
I disagree with ur assessment of past performance, EI has done quite well on short haul against an extremely competitive FR. However I concede that long haul hasn't done as well even in a boom.
The last point I made was about long haul distinations - invariably if you try to book long haul out of Ireland you will end up on EI for some portion of the journey as they codeshare with BA to LHR and KLM to AMS, so it's hard to avoid EI even if you don't choose them to fly long haul with.
I don't think they can undercut their rivals by very much more and sustain the losses.
I just thought as the current plan isn't working they babdly need a new one!
Transfer traffic would depend on the merger partner for example BA will route their South American traffic via Madrid feeding into Iberia's network.
Again depending on the partner the new merged entity would have a base or bases in other markets.
I disagree with ur assessment of past performance, EI has done quite well on short haul against an extremely competitive FR. However I concede that long haul hasn't done as well even in a boom.
The last point I made was about long haul distinations - invariably if you try to book long haul out of Ireland you will end up on EI for some portion of the journey as they codeshare with BA to LHR and KLM to AMS, so it's hard to avoid EI even if you don't choose them to fly long haul with.
I don't think they can undercut their rivals by very much more and sustain the losses.
I just thought as the current plan isn't working they babdly need a new one!
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- Air France
- bmi
- Continental
- Delta
- Etihad
- Lufthansa
- Scandinavian
- Swiss
It's not that hard to avoid an EI sector for long haul destinations (not that I'm suggesting you should, just pointing out that they don't have the sort of lock on the Dublin long-haul connecting market that you imply...)
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How are all the lgw routes been getting on recently-if will would their be any mare expansion s10??
EI management and unions to meet under arbitration.
link
JAS
Aer Lingus management and unions are to attend the Labour Relations Commission for talks on cutting the airline's cost base by up to €97m a year.
link
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Astraeus
Aer Lingus reached an agreement with astraeus airlines whereby they operate for Aer Lingus at Belfast & Gatwick. Astraeus will lease Aer Lingus's A320s at these bases and operate for them on Astraeus AOC.
The obvious reason would be allowing Aer Lingus to operate Uk, particularly Gatwick to destinations outside the UK. The aircraft will also bear some Astraeus markings ie their name. The following piece of text is most of the detail....
Aer Lingus has started the process of obtaining its own UK AOC.As a lead-in to this, Aer Lingus have arranged with UK carrier Astraeus to take over 0operation of the Belfast and Gatwick bases, with Aer Lingus dry-leasing the seven aircraft concerned to Astraeus, who will
operate them on Aer Lingus’ services on a wet-lease basis. The Aer Lingus crews based
at Belfast and Gatwick will continue to operate these aircraft, but under the UK carrier’s operational control. The seven aircraft are being transferred on a phased basis to Astraeus over the next couple of months, and of course they are retaining Aer Lingus colours but with some external reference to Astraeus as the operating carrier.
The aircraft are remaining on the Irish register, at least initially. Astraeus only recently added the Airbus A320 to its AOC, having acquired former Iberia and Clickair aircraft EC-GRF, which has been placed on the British register as G-STRP. Hitherto Astraeus had been an all-Boeing operator,
with a mixture of Boeing 737s and 757s.
The obvious reason would be allowing Aer Lingus to operate Uk, particularly Gatwick to destinations outside the UK. The aircraft will also bear some Astraeus markings ie their name. The following piece of text is most of the detail....
Aer Lingus has started the process of obtaining its own UK AOC.As a lead-in to this, Aer Lingus have arranged with UK carrier Astraeus to take over 0operation of the Belfast and Gatwick bases, with Aer Lingus dry-leasing the seven aircraft concerned to Astraeus, who will
operate them on Aer Lingus’ services on a wet-lease basis. The Aer Lingus crews based
at Belfast and Gatwick will continue to operate these aircraft, but under the UK carrier’s operational control. The seven aircraft are being transferred on a phased basis to Astraeus over the next couple of months, and of course they are retaining Aer Lingus colours but with some external reference to Astraeus as the operating carrier.
The aircraft are remaining on the Irish register, at least initially. Astraeus only recently added the Airbus A320 to its AOC, having acquired former Iberia and Clickair aircraft EC-GRF, which has been placed on the British register as G-STRP. Hitherto Astraeus had been an all-Boeing operator,
with a mixture of Boeing 737s and 757s.
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Why the Hell do they need a UK AOC? Do Ryanair still use Ryanair UK? I doubt it.
Won't this cut the flexibility to mix aircraft around the system when you have "UK" and "non UK" aircraft.
As an aside, if you are going to quote, always, always, always supply a source.
You don't need a UK AOC for this. Again, ask the boys at Ryanair.
Won't this cut the flexibility to mix aircraft around the system when you have "UK" and "non UK" aircraft.
As an aside, if you are going to quote, always, always, always supply a source.
particularly Gatwick to destinations outside the UK
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I thought it was for routes outside of the EU, under their own AOC Aer Lingus are only permitted to operate from Gatwick or Belfast within the EU or to countries with an openskies agreement in place. The UK AOC will enable to them to fly to other destinations.
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Won't Aer Lingus have to establish some sort of a legal entity in the UK in order to gain access to the UK's bilateral agreements? There is some work on-going in the BA / Iberia merger to create holding companies in each airlines home country to effectively hold the rights granted via the bilaterals in their home countries. Will be interesting to see the corporate structure of the company that grows out of this idea.
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I understand that on a recent EIN flight from LGW to AGP there were only 7 pax. That bodes very badly for the winter when demand falls.
I cannnot work out why EIN needs an UK AOC unless it intends to set up a completely separate company. Maybe that is what they are planning but why?
It would surely be better to cut their risks and costs. Trying to fight EZY out of LGW and BFS seems to be a senseless policy. EZY has cash and EIN are running out of it. There looks to be only one possible end of the battle. It is surely only a matter of time now before they withdraw these pointless routes.
It is impossible for me to work out the purpose of the Astraeus deal.
Perhaps it is just evidence of a complete lack of strategy within EIN, just as Ryanair assert. There is only one option for EIN and that is to merge with RYR. Thrashing about with meaningless interim deals will just reduce shareholder value even more. IMHO.
I cannnot work out why EIN needs an UK AOC unless it intends to set up a completely separate company. Maybe that is what they are planning but why?
It would surely be better to cut their risks and costs. Trying to fight EZY out of LGW and BFS seems to be a senseless policy. EZY has cash and EIN are running out of it. There looks to be only one possible end of the battle. It is surely only a matter of time now before they withdraw these pointless routes.
It is impossible for me to work out the purpose of the Astraeus deal.
Perhaps it is just evidence of a complete lack of strategy within EIN, just as Ryanair assert. There is only one option for EIN and that is to merge with RYR. Thrashing about with meaningless interim deals will just reduce shareholder value even more. IMHO.
Skipness One Echo wrote:
Purely a guess, but operating under a UK AOC would grant EI access to UK bi-laterial flight agreements. The Irish government, under the direction of previous EI management, has only looked west with regard to routes and agreements. The UK has, due to it's historical links around the planet, had a wider view.
JAS
Why the Hell do they need a UK AOC? Do Ryanair still use Ryanair UK? I doubt it.
Won't this cut the flexibility to mix aircraft around the system when you have "UK" and "non UK" aircraft.
As an aside, if you are going to quote, always, always, always supply a source.
Quote:
particularly Gatwick to destinations outside the UK
You don't need a UK AOC for this. Again, ask the boys at Ryanair.
Won't this cut the flexibility to mix aircraft around the system when you have "UK" and "non UK" aircraft.
As an aside, if you are going to quote, always, always, always supply a source.
Quote:
particularly Gatwick to destinations outside the UK
You don't need a UK AOC for this. Again, ask the boys at Ryanair.
JAS
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There's a much bigger reason behind the UK AOC:
Aer Lingus and pilots face probe over rehire claims | Irish Examiner
Aer Lingus and pilots face probe over rehire claims | Irish Examiner
Legally employees being paid redundancy by one entity, then joining same entity in different name at same location would find their redundancy payments are null and void and would have to pay income tax on everything.
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EI are not planning to change their status from operating under an Irish AOC for their Irish operation and think you will find that Irish Govt as a 25% shareholder would not approve at an EGM
From where I'm perched looking on it doesnt look good.
