Aer Lingus - 5

[Papa2Charlie]

The costs associated with setting up another airline within the EI group could well sink Aer Lingus. The capital requirements alone in terms of getting a new AOC, sourcing equipment etc. would make a bad cash situation even worse. The other problem with establishing another carrier is the simple fact that the European market is flooded with LCC's. We have Ryanair, EasyJet, Air Berlin etc. and these carriers have such a foot hold in the market that it's near impossible to establish a new carrier on a sound financial footing.

As Aer Lingus LGW effectively operated as a LCC with T&C's more akin to EasyJet, it goes to show that establishing a new carrier is just throwing good money after bad.

Finally, the management time that would be devoted to such a venture would leave a big gap in the management of the Aer Lingus group.

[EI-BUD]

I dont agree that LGW was a bad choice of base. Sadly, any airport could be deemed to be a bad choice of airport for Aer Lingus. What I mean is that when Aer Lingus announced LGW the feedback on here was broadly;
-London is a huge market and LGW is a very busy airport
-Aer Lingus will be well known due in part to the significant Irish Population in the London area.
-As LGW will attract strong passenger numbers, Aer Lingus will easily get this business with their low fares and pre assigned seating etc.
-Ryanair unlikely to be able to launch at the scale that they want to go head to head with Aer Lingus.

Aer Lingus has chosen bases ie BFS & LGW where it is unlikely that Ryanair can access directly. In BFS FR never could get a deal and the airport was unlikely to give same given that EZY was based there. LGW as stated there was a slot restriction situation (to a large extent) and Ryanair would be reluctant to operate a base at what is probably a high cost environment and a congested airport?

So if Aer Lingus are shortlisting an airport for a base strike off any where Ryanair could access. So in that sense CWL is one where Ryanair is not interested in, BLK too, as well as MAN. Outside of those in the UK Aer Lingus will not touch.

I would agree however, that most people would associate Aer Lingus with a trip to the Island of Ireland. What would be a great idea would be rather than rebranding the airline, launch a low fares website and get other airlines into this web facility.

Eg like Moneysupermarket
They sell a wide range of services from different companies under one umbrella.

That said I would always agree that an airline name that has the country of the origin in its name will always be associated with that place. However, AirBerlin may well be the exception.

EI-BUD

[EI-RB]

I dont agree that LGW was a bad choice of base

I think going up against Easyjet directly was an even bigger mistake . Easyjet like to put themselves in the low fares with care and convenience category similar to Aer Lingus's low fares way better. EI could have avoided going head to head with Easyjet at Gatwick. How incompetent were management they never learned their lesson at belfast going up against easy. Clowns ! It is very difficult to see aer lingus remaining independent. Having a strategy of just serving a small island like Ireland is madness.

[EI-BUD]

EI-RB; I think it is very easy to do a postmortum on what went wrong or what the state of play at LGW is, I think everyone was in agreement that EI needed to expand and open additional bases. As you advise that they were 'clowns', where else in the UK would you deem to have been a better choice?

[Just a spotter]

I have to agree with EI-BUD. LGW was/is a decent choice.

London is, by most population metrics, the largest city in Europe. That offers a pretty attractive catchment area for an airline with the right offering. So, if you're a manager of EI, with a foothold at LHR, how do you expand? LHR slots are expensive, STN is FR central, similarly LTN with U2 and LCY is limited with the aircraft it can accept ... by a process of elimination LGW is the only option if you want to increase your slice of the London pie.

Of course, the other elements of the equation are the right product at the right price and the right economic circumstances, but just because FR or U2 are operating in the neighbourhood is no reason to not attempt to make a pitch.

JAS

[EI-RB]

Aer Lingus did'nt stand a chance LGW, everone knows LGW is a big holiday destination gateway in the UK but Aer Lingus would'nt pop into my mind when looking for a holiday flight ( and i know who fly where ) Mr and Mrs Joe blogs looking for fight only would look at Thomas Cook, Thomson, Ryanair-Easyjet, Flybe, BA I dont think many would even think of Aer Lingus unless traveling to Ireland but even then Ryanair would be looked at before Aer Lingus...

The only way for Aer Lingus to move into other markets (UK holiday flight only) would be a re-brand...


A new brand aimed towards your new market works a whole lot better than a brand people link with flights to Ireland .
If you asked the people on the streets of London and areas around if they know where AerLingus flys most would say WHO and the the rest would say Ireland.
Thats not forgeting the people in European Cities who wish to fly to London they probabley cant even say Aer lingus or spell it, thats nothing against them its just an un-friendly European name.
By rebranding the news spreads fast of a new player in the market even if its not new people will see a new Airline.

daz211

I agree with a lot of what daz211 has said above in the LGW Thread. How many legacy or flag carriers have successfully established bases outside of their own jurisdiction using their own brand ?? Lufthansa were creative in Italy creating the name Lufthansa Italia !!! No other airline comes to my mind. EI only seem to have strong brand recognition with Irish people in the UK.

The costs associated with setting up another airline within the EI group could well sink Aer Lingus. The capital requirements alone in terms of getting a new AOC, sourcing equipment etc. would make a bad cash situation even worse.

Papa2Charlie look at the money that has just been pissed away on setting up and marketing LGW. If EI were to set up a uk subsidiary which was on the cards they could have transferred aircraft from EI onto the new lower cost new brand subsidiary.

EI-RB; I think it is very easy to do a postmortum on what went wrong or what the state of play at LGW is, I think everyone was in agreement that EI needed to expand and open additional bases. As you advise that they were 'clowns', where else in the UK would you deem to have been a better choice?

I thought there was potential at LGW with BA pulling off so many routes. When I saw EI going head to head on certain EZY routes this was crazy and they obviously did not learn any lessons from going up against EZY in Belfast.
Remember them going up against EZY on AMS twice daily from Belfast and they got roasted. I remember thinking how can belfast sustain both of them on this route.

[EI-BUD]

Remember them going up against EZY on AMS twice daily from Belfast and they got roasted. I remember thinking how can belfast sustain both of them on this route.

EI-RB; you are correct BFS AMS was a disaster, but I dont think that it was that EZY gave them a run for their money. EZY had a big drop in their daily loads as well. Not especially fair to compare BFS experience to LGW. BFS is a very small market and routes like AMS could never sustain 3 daily flights (2 EI 1 EZY as it was). The EI early departure (I think it was 0610 at the start often had as few as 30 Pax!). The experience at LGW is a very different one. There is a big pot of passengers and over capacity and Aer Lingus couldnt capture an appropriate slice of the market at an acceptable price. In BFS the cake is very small outside of the UK and Sunshine routes. All UK routes ex BFS are over subscribed and LHR is only because EI are protected by the luxury of no direct competition on this route (ie BFS/LHR, unless BA come back- unlikely). EI are well positioned on the sun routes ex BFS and they did quite well in Summer 09 on same. More of that to come this year.

How many legacy or flag carriers have successfully established bases outside of their own jurisdiction using their own brand ??

Have to agree on this one, though the opportunity to move to other markets has only been around since deregulation of the market and since that time the loco's have put paid to any notion of the flag carriers making bases in other countries. I mentioned earlier Air Berlin has had success in places like Palma (but not a flag carrier of course).

Somebody mentioned earlier that EI should look at doing contract work ACMI? Airlines like Aer Arann have done this with some success.
Also charter work. EI used to do most of the Budget Travel charter work and many over night flights. I imagine if they could do the same now since Budget are gone (with other co's), it would allow them to increase utility of the aircraft, save some jobs, only even if it was to cover costs and in turn reduce the unit costs of the airbus fleet, ie the cost of each seat mile decreases if this is significantly increased. Airlines like Monarch have boasted in the past that their high utility gives them a good cost base. Not sure how relevant that is in this instance.

EI-BUD

[racedo]

EI-RB; I think it is very easy to do a postmortum on what went wrong or what the state of play at LGW is, I think everyone was in agreement that EI needed to expand and open additional bases. As you advise that they were 'clowns', where else in the UK would you deem to have been a better choice?

LGW was a panic measure so as to be seen to do something in face of a potential takeover.

Rather than deal with the issues that were already evident in a cost base way too high for a pseudo LCC they chucked money on badly thought expansion.

Figuring they could go up against Easyjet and win was a folly because they assummed that they competed with FR at Dub where reality is something different.

The tinkering and inability to decide what they are means that any strategy just gets doomed to failure as people don't believe they will pursue it to the end.

The tie up with Aer Arran has shades of do they really know what they are doing or is it yet another jump at being seen to do something.

[CCR]

I agree with comments that Aer Lingus should try long haul from Manchester via Ireland to the US on routes where there are no direct flights ex-Manchester. They could re-introduce all the US destinations they canned from Dublin..

Manchester-Dublin-San Francisco
Manchester-Dublin-LA
Manchester-Dublin-Washington DC

Manchester-Shannon-Boston (rather than originating in Dublin)

New routes..

Malaga-Dublin-Boston
Manchester-Dublin-Dallas

There are lot's of opportunities with the open skies agreement!!
All flights could go through US immigration in Ireland avoiding the long queues in the US

[on time all the time]

EI-BUD,
Working form Gatwick the arrival of EI and the choice of destinations was seen as totally suicidal.
I don't even think about the name of the competitors but the time, the biggest economic crisis we have seen since 1929. There was already too many competitors chasing to few pax. Remember a lot of these destinations are in the Euro zone that the brits are avoiding as too expensive places to go on holiday.
We looked at it in dismay and from day one used the word suicidal. You did not need to be an expert to see it coming.
The only good point was the punter who was happy . No one made any money on the routes.
Now the punter will have a surprise for 2010....unless another clever airline decides to replace EI, the price will go up.
Competition is good but only when there is a chance to make a route viable and the product is paid at an accetable price not dumped to make numbers.
I work at gatwick and if I can see as many other people could see the move was a mistake, how could EI anagement not see it? The ivory tower must be think and tall.

[CCR]

On my last comment, I meant to say not only offer those long haul connections from Manchester via Dublin but offer those destinations via Dublin from all UK and Ireland airports in conjunction with Aer Arann as well as offering connections throughout their European network to/from US. That would sure help EI long haul numbers

[MUFC_fan]

DUB would be a fantastic transfer hub if used correctly which EI fail to do. Their current problem is:

1. They have a product that isn't comparable to Lufthansa, BA or the Skyteam duo. They would seriously need to revamp all their cabins over the pond to even stand a chance.

2. They don't advertise the onward connections. Now that they have tried to conceive themselves as a low fares carrier, the seem very reluctant to advertise the fact that actually, it is possible to fly via DUB to the US. Why, I don't know.

3. They offer no premium short haul product. If they want to fill up their front cabins on long haul from short haul routes then they need to reintroduce a premium service and revert back to a so called 'legacy carrier.'

4. Reduce fares. It seems that whenever I search for a US bound flight, their fares seem quite high compared to others such as BA etc. Reduce them, and the passengers may come flocking in.

[EI-BUD]

EI-BUD,
Working form Gatwick the arrival of EI and the choice of destinations was seen as totally suicidal.

Hi on time all the time;
Thanks for the reply to my post. I am making the point that LGW was as a good a choice for a new base as any other airport. Except LGW would probably not have Ryanair setting up shop alongside EI. The London market is big and if Aer Lingus cannot get this to work there are no other places viable for a base in the UK.

Can anyone come back with a serious to that question? What would have been a better choice in the UK other than LGW.

Can I also ask would any other airline have had it any different? Would Ryanair have been able to make this work profitably or are customers deciding I want to fly from LGW and I automatically check easyjet.com, From Stansted Ryanair.com, and Luton Easyjet.com.
Ryanair itself hasnt had a great level of success from LGW some of the routes that were set up were binned. Eg Weeze and perhaps Marseille (not sure on that one if it operated).

EI-BUD

[EI-BUD]

So 3 based aircraft at LGW with Dublin, Knock, Cork and Malaga. If AGP is x3 Daily, NOC x 1 daily, ORK x1 daily does that mean that some of the Dublin flights will be by a LGW based machine or does it mean that ORK will be twice daily?

[StephenM_SMC]

1. They have a product that isn't comparable to Lufthansa, BA or the Skyteam duo. They would seriously need to revamp all their cabins over the pond to even stand a chance.

Since they have just finished revamping their long haul cabins with full AVOD for Economy and Lie-flat sleeper seats in Premier, what further features did they leave out that would require another revamp?

[ayroplain]

All flights could go through US immigration in Ireland avoiding the long queues in the US

I used to think this might be true but it is time now for this myth be done away with once and for all. It is not easy to introduce the subject of aviation when with friends or business associates but I do try to ask the odd question if only to satisfy my own curiosity. Over the past 12 months I managed to get a feel for this particular subject and judging by the views expressed it doesn't seem to be a runner.

The first question that is usually asked is "Where do they (Aer Lingus) fly to in US?" As soon as they hear the (now ever-diminishing) list of destinations the answer is a definite no. The US immigration factor is not a factor at all. Whether with family or on business they simply do not want to have to change to another aircraft and go through all the hassle at another airport. (I promise I didn't even mention the DAA).

For straightforward destinations like New York, Chicago, Orlando, LA, SFO they have direct flights. If they wished to fly to US cities that have no direct flights it would mean two segments. The last thing they want would be a third (albeit much shorter) flight. (and most certainly not with kids in tow)

These comments come from people who are based in various parts of the UK from the South coast to Glasgow but I wonder if people from continental Europe would think any differently about a Dublin hub.

The only bit of good news is that only one of the persons consulted had never heard of Aer Lingus.

[EI320]

I am very doubtful that a third aircraft will be based at LGW. There are no other flights for it to operate. Looking at EI's schedule, the DUB route will be operated soley on a DUB based aircraft.

EI stated that they would reduce capacity at LGW from 5 to 3 aircraft. The capacity of 3 aircraft can be provided even if one aircraft is based in DUB and operating in and out of LGW all day. They didn't say that 3 aircraft would actually be based in LGW.

[airbourne]

Is there a spare A330 at the moment? Like -DUB? BA seemed to able to find a 744 to do a ferry flight to Haiti. Any chance Herr Mueller would do the same? How did the Irish reps get to Haiti?

[mathers_wales_uk]

BA find a 747? You must be kidding there has been at least 3 parked at CWL for at leats a 12 month now.

[tigger2k8]

Pilots vote to keep Aer Lingus flying - Irish, Business - Independent.ie

Sunday January 17 2010
AFTER apparently going right to the brink, the Aer Lingus pilots blinked at the last minute. By voting to accept a 10 per cent pay cut and 76 redundancies, they have kept the airline flying, at least for the time being.
Finally, three months after it was unveiled, it looks as if CEO Christoph Mueller's restructuring plan, which will shave €97m off Aer Lingus's annual costs and shed 675 jobs, will be implemented.
Last week the Aer Lingus pilots voted to accept pay and job cuts. While they have yet to agree to the pension changes and outsourcing contained in the Mueller plan, that's just posturing. Having looked into the abyss and decided that they didn't like what they saw, any future strike threats by the pilots would ring very hollow.
The bad news is that, with Aer Lingus's cash reserves likely to have hit €280m at the end of 2009, down from €757m two years earlier, the Mueller package was the bare minimum needed to keep it flying.
All around the world, former flag carriers are feeling the pinch. Last week Japan Airlines had to be bailed out.
Unfortunately, Aer Lingus can't rely on such a bailout. It's hard to see Aer Lingus surviving as an independent company beyond the very short term.
Sunday Independent

shame about redundancies, i wish those involved the best of luck.. but i guess its needed to try and keep them going