Aer Lingus - 5
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On a lighter note I came across this link on another website to a short video about the recent trip by Aer Lingus bringing supplies to Haiti in conjunction with the charity GOAL.
Special Flight to Deliver Supplies to Haiti | Aer Lingus
Special Flight to Deliver Supplies to Haiti | Aer Lingus
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Can't remember where but it was in some article end of this year and based on the reduction of cash reserves for 2009 that was equivalent to €2 mill a day.
Loosing around €2 mill a day you do the math for when they are running out of cash unless something is changing today.......
They are spending approx €1 million more per day than they are taking in which is why the cash reserves have dropped through the floor.
In 2009 they have paid almost €120 million in the process of paying off people which was agreed in 2008, in 2010 they will be paying off the people targeted in 2009 which is probably likely to be in the region of €80-90 million.
Net cash for 2009 year was forecast last March to be €420 M at the end of 2009 but clearly this is not going to be the case as they stated at half year.
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Just a brief point in relation to some of my previous posts relating to Aer Lingus. Having read through the investors day presentation I am glad to see that the management team in the airline have realised that they cannot compete with Ryanair and must pursue their own airline model. This in my mind is crucial and I feel the management have finally grasped the idea that the airline needs a vision of what it will look like in the future.
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I would assume the Aer Arann Irish domestic services are not included in the Aer Lingus franchaise deal is because the RE brand is relatively well known in Ireland whilst the countries it flies to (Britain & France) it`s brand is NOT well known. That is why the Aer Lingus franchaise will help them. I`m sure the Aer Arann/Aer Lingus Cork-Dublin interline arrangement will extend to all airports it serves in Ireland. i.e. you will be able to book your flight from say Donegal to New York on the Aer Lingus website.
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First name, one letter misspelling!
Any Ideas what EI are like with a one letter first name misspelling? Only flying between Ireland and the UK. Jonathon should have been Jonathan. Will they make me buy a new ticket?
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Aer Lingus Commuter
Is this not simply reversing the 2001 decision to bring Aer Lingus Commuter back into the main operation and subsequently wind it down.
Why was this a good strategic choice at that time and yet a mere 9 years on its reversal is being heralded as a great new direction. From 1984 to 2001 Aer Lingus had their own version of the service that Aer Arran will provide. It did not work and was removed.
I do hope that my observation is not over simplifying things and it does prove fruitful for both organisations. However it appears as though it is a choice to do something rather than nothing at all. Clearly the CEO and those that were closest to him did not agree on this strategic choice as both of his most senior executives have left.
Interesting time ahead.
Why was this a good strategic choice at that time and yet a mere 9 years on its reversal is being heralded as a great new direction. From 1984 to 2001 Aer Lingus had their own version of the service that Aer Arran will provide. It did not work and was removed.
I do hope that my observation is not over simplifying things and it does prove fruitful for both organisations. However it appears as though it is a choice to do something rather than nothing at all. Clearly the CEO and those that were closest to him did not agree on this strategic choice as both of his most senior executives have left.
Interesting time ahead.
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Hi NFF,
There are a number of substantial differences between the Aer Lingus Commuter operation and the Aer Arann / Aer Lingus Regional operation. The first is that the Aer Lingus Commuter (EIC) was a unit of Aer Lingus and the staff were Aer Lingus employees resulting in relatively high unit costs. The terms and conditions for those at Aer Arann are significantly less generous than those afforded to Aer Lingus employees when the EIC brand was in operation.
EIC operated a diverse fleet including F50's, SF340's and BAe 146's, a fleet which has relatively little in common with each other from an operational or maintenance point of view. The Aer Arann fleet is more uniform and while there are ATR42-300 mixing with ATR72-200 / 500's, the operation and maintenance of the aircraft are relatively similar.
Finally from the Aer Lingus point of view, when EIC was in operation, Aer Lingus bore the profit and loss of the routes operated. Under this deal, Aer Lingus simply pay a fee and the profit/loss is borne by Aer Arann. From Aer Lingus' viewpoint it's a predictable cost which will arguably be lower than the costs they faced flying A320's on UK regional routes.
All the best,
P2C.
There are a number of substantial differences between the Aer Lingus Commuter operation and the Aer Arann / Aer Lingus Regional operation. The first is that the Aer Lingus Commuter (EIC) was a unit of Aer Lingus and the staff were Aer Lingus employees resulting in relatively high unit costs. The terms and conditions for those at Aer Arann are significantly less generous than those afforded to Aer Lingus employees when the EIC brand was in operation.
EIC operated a diverse fleet including F50's, SF340's and BAe 146's, a fleet which has relatively little in common with each other from an operational or maintenance point of view. The Aer Arann fleet is more uniform and while there are ATR42-300 mixing with ATR72-200 / 500's, the operation and maintenance of the aircraft are relatively similar.
Finally from the Aer Lingus point of view, when EIC was in operation, Aer Lingus bore the profit and loss of the routes operated. Under this deal, Aer Lingus simply pay a fee and the profit/loss is borne by Aer Arann. From Aer Lingus' viewpoint it's a predictable cost which will arguably be lower than the costs they faced flying A320's on UK regional routes.
All the best,
P2C.
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Hi P2C,
Your points are well made and accepted without reservation. However even with these savings, and I did consider them, it must also be considered the margins on air travel are extremely tight in the current operating environment. The overall strategy is still "relatively" similar. It matters not who makes the profit or takes the loss. The point is it must be a profitable for both in order to succeed.
From EI view point - there are always hidden costs with any out sourced activity.
From RE - is this a sustainable profitable operation
I myself have no particular stand on this and wish them both every success. It is just food for thought.
NFF
Your points are well made and accepted without reservation. However even with these savings, and I did consider them, it must also be considered the margins on air travel are extremely tight in the current operating environment. The overall strategy is still "relatively" similar. It matters not who makes the profit or takes the loss. The point is it must be a profitable for both in order to succeed.
From EI view point - there are always hidden costs with any out sourced activity.
From RE - is this a sustainable profitable operation
I myself have no particular stand on this and wish them both every success. It is just food for thought.
NFF
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Aer Lingus simply pay a fee and the profit/loss is borne by Aer Arann.
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Hi Skipness,
My apologies, you are correct, Aer Arann are paying the franchise fee. I mis-read the press release yesterday.
All the best,
P2C
My apologies, you are correct, Aer Arann are paying the franchise fee. I mis-read the press release yesterday.
All the best,
P2C
Last edited by Papa2Charlie; 27th Jan 2010 at 12:46.
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I just had a read through the Investor day presentation and it's certainly worth a read:
http://www.aerlingus.com/Corporate/I...esentation.pdf
One issue that concerns me is EI's long haul; on P33 of the presentation, the airline refers to one way pax on various routes, from Sydney (c. 52/day) to DXB (around 20) and from that it concludes that there's insufficient traffic for its own route. OK, fair enough, but I noticed in the Indo this week that there were a few statistics on other carriers for DUB during the year, which told quite a different story from the gloom I expected; far from spinning downwards, a number of the carriers have seen growth, while others have held their own with only a small decline:
"The figures seen by the Irish Independent also show that passenger figures for BMI at Dublin sank 12.2pc to 467,200 last year. The British airline is owned by Lufthansa and recently announced the closure of its Dublin base. Lufthansa's own passenger traffic at Dublin was flat at 240,570.
Passenger figures for Abu Dhabi's Etihad jumped nearly 27pc to 161,000, while those for US carrier Continental Airlines fell 4.6pc to 197,240. Delta's climbed 1.7pc to 260,350.
The passenger numbers for SAS were 5.5pc lower at 225,855, while those for Air France, under its CityJet subsidiary, were 3.3pc higher at 462,500. Flybe's numbers tumbled over 23pc to 123,442"
RE traffic was down 32%, EI down 7% and FR down about 10%."
EY is the star performer, clearly; that's about 220 pax per acft per day, far in excess of the figures published by EI; I'd be very interested in knowing the final destinations of these pax; of AF, SK and LH traffic, quite a significant number connect onwards. It is interesting that in the midst of such a massive recession in Ireland, long haul traffic remained surprisingly bouyant, auguring well for the years ahead - as long as the product is right?
I guess one conclusion one can draw is that travellers prefer other options to LHR (which might explain why BD's numbers have declined so much); the fact that EY has hoovered up a lot of this long haul traffic (being the only long haul carrier flying eastbound from DUB) will have affected the EY traffic.
True, EY has a fair bit of cash behind it (the same people who bailed out Dubai!), but surely what needs to be done to EI's long haul product to make it attractive is not going to be massively expensive - perhaps premium economy class, better IFE, the advantages of a new FFP (preferably if it's linked to an alliance).
In conclusion, it seems that EI's projections for long haul traffic seem to be based on incorrect or incomplete data? Their views are probably coloured by their experience of DXB, which wasn't really their best possible effort.
http://www.aerlingus.com/Corporate/I...esentation.pdf
One issue that concerns me is EI's long haul; on P33 of the presentation, the airline refers to one way pax on various routes, from Sydney (c. 52/day) to DXB (around 20) and from that it concludes that there's insufficient traffic for its own route. OK, fair enough, but I noticed in the Indo this week that there were a few statistics on other carriers for DUB during the year, which told quite a different story from the gloom I expected; far from spinning downwards, a number of the carriers have seen growth, while others have held their own with only a small decline:
"The figures seen by the Irish Independent also show that passenger figures for BMI at Dublin sank 12.2pc to 467,200 last year. The British airline is owned by Lufthansa and recently announced the closure of its Dublin base. Lufthansa's own passenger traffic at Dublin was flat at 240,570.
Passenger figures for Abu Dhabi's Etihad jumped nearly 27pc to 161,000, while those for US carrier Continental Airlines fell 4.6pc to 197,240. Delta's climbed 1.7pc to 260,350.
The passenger numbers for SAS were 5.5pc lower at 225,855, while those for Air France, under its CityJet subsidiary, were 3.3pc higher at 462,500. Flybe's numbers tumbled over 23pc to 123,442"
RE traffic was down 32%, EI down 7% and FR down about 10%."
EY is the star performer, clearly; that's about 220 pax per acft per day, far in excess of the figures published by EI; I'd be very interested in knowing the final destinations of these pax; of AF, SK and LH traffic, quite a significant number connect onwards. It is interesting that in the midst of such a massive recession in Ireland, long haul traffic remained surprisingly bouyant, auguring well for the years ahead - as long as the product is right?
I guess one conclusion one can draw is that travellers prefer other options to LHR (which might explain why BD's numbers have declined so much); the fact that EY has hoovered up a lot of this long haul traffic (being the only long haul carrier flying eastbound from DUB) will have affected the EY traffic.
True, EY has a fair bit of cash behind it (the same people who bailed out Dubai!), but surely what needs to be done to EI's long haul product to make it attractive is not going to be massively expensive - perhaps premium economy class, better IFE, the advantages of a new FFP (preferably if it's linked to an alliance).
In conclusion, it seems that EI's projections for long haul traffic seem to be based on incorrect or incomplete data? Their views are probably coloured by their experience of DXB, which wasn't really their best possible effort.
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Hi aeroskid,
An interesting point indeed. The one thing it brought home to me was the missed opportunity when Aer Lingus were serving Dubai. If they had an interline agreement in place it could've lucrative route for Aer Lingus. That said there may have been more going on behind the scenes than we know.
All the best,
P2C
An interesting point indeed. The one thing it brought home to me was the missed opportunity when Aer Lingus were serving Dubai. If they had an interline agreement in place it could've lucrative route for Aer Lingus. That said there may have been more going on behind the scenes than we know.
All the best,
P2C
Pure speculation, but based on a) the population of Ireland has started to shrink for the first time since 1996 and b) anecdotal evidence that Aus and NZ are the migration locations of choice for 20 & 30something Irish grads wanting to leave the rubble of the "Celtic Tiger" blow out, perhaps EK and EY are the beneficiaries of that particular stream of "one way" traffic.
JAS
JAS
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Ireland Australia traffic
Difficult to accurately estimate Ireland Australia traffic as many people book the LHR Ireland sector as a point to point flight and then travel onward on a seperate ticket.
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I'm not sure of the onboard product of EI or their appeal to the business community.
HOWEVER, I do know that the airline's main base is in arguably the best geographical position of any of the long haul airlines in Europe. Not only that the airport is building a brand spanking new terminal and has slots to give away!
Is it all about investment? Because if they could get a comparative onboard product to BA/AF/KL/LH etc both short and long haul, get their arses back into a bloody alliance (OW or *A, don't particularly care) and launch a massive advertisement campaign - they have a chance!
I'll go back to my pint now and finish watching Match of the Day...
HOWEVER, I do know that the airline's main base is in arguably the best geographical position of any of the long haul airlines in Europe. Not only that the airport is building a brand spanking new terminal and has slots to give away!
Is it all about investment? Because if they could get a comparative onboard product to BA/AF/KL/LH etc both short and long haul, get their arses back into a bloody alliance (OW or *A, don't particularly care) and launch a massive advertisement campaign - they have a chance!
I'll go back to my pint now and finish watching Match of the Day...
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Having been critical of EIN strategy in this thread I have to say that I like the look of the Aer Arrann deal. I like RE having flown on them on the Waterford-Luton route. They have good staff and what seems to be a very reliable operation. I wish them luck with is expansion.