Aer Lingus - 5

[irish laddie]

As a regular SLF on ORK/DUB-LHR, the last thing the LHR routes need is an equipment downgrade in my view. Throughout the recessions on both sides of the Irish Sea, it's been a pleasent surprise to see how resilient the LF's have been on the LHR services, no matter what the time of day or day of the week.

In my view ORK-LHR is crying out for an A321 or the 5th daily flight back!

[ayroplain]

it's been a pleasant surprise to see how resilient the LF's have been on the LHR services, no matter what the time of day or day of the week

This opinion appears to conflict with akerosid's recent experience and also with the fact that on Saturday last EI could afford to cancel two return trips DUB-LHR about which EC-ILS commented that it is easy to cancel LHR on Saturdays and combine flights. If the LF's are as good as you say how did they manage to squeeze, what, 600 pax+ (whose flights they arbitrarily cancelled) onto the remaining flights? Unless, of course, they put them up in hotels overnight.

I go along with akerosid's point about smaller types especially with the good times unlikely to return for a great many years,

Is it likely that they will farm out more to RE instead?

[EI-BUD]

Could someone have a go and tell me what the idea was around the EI fleet in the late 90s. Bae 146's, 734/5's, A320/A321. It was such a messy mixed fleet.

The best option EI should go for would be the 100 seat aircraft, and I think the best option there is the Embraer E190. Seems to be a winner for JetBlue!

hi Airbourne
In the 90s FR were expanding rapidly with a very affordable fleet of B11s and 73S's out of Dublin on UK routes. These were reported to be on operating leases at around £50k per month (B11s and 73S purchased cheaply from LH, BY & HV amongst others) compared to EI's 737s at £250k. Ryanair were stealing the show on UK routes and at this time hadny set there sights on continental european routes except for may CRL and BVA.

EI needed a cheaper aircraft that was a jet and so a cheap enough deal was done to secure the 146s from the desert alot of ex US Air model that were parked after Gulf War. This was in 1994 if memory serves me correctly. They were certainly alot more cost effective in terms of lease repayment that 737.

About this time EI were looking at ways to be more effective in competing with FR and talked at some lenght about setting up a company called Aer Lingus Express to be low frills and more aggressive against Ryanair. That never happened.

The F50s were for domestic and thin UK routes (all of which were cancelled upon withdrawl of F50s, eg LBA, EMA, NCL etc)

The 737s were the mainstay of London routes and European routes, the 146s did the Uk regions and some other near euro routes DUS, BRU and to places like JER. For a time Aer Lingus did twice weekly BHX NOC on 146 where it fri and sun rotations!

It wasnt until WW came along and saw a value in one type which at that time seemed like the right thing to do, and the cost base was certainly shaping up but the company's firm plan was to mimic Ryanair in so many ways and now we clearly see that EI needs to be different and better and Niche.

I agree wholeheartedly that EI need a smaller type perhaps in the 100 seat market (like KLM for eg or Jetblue as you refer to). Akerosid has been saying this for some time and I agree.

Nobody on this forum ever refer to Ryanair's avoidance of competition with Flybe, FR avoid them like the plague, why? because on thin routes FR cannot compete profitably with them as BE will do high frequency and reasonably fares (never bargain basement), and this is exactly the reason why EI should persue this line of attack, and in the mean time keep developing the RE relationship.

If RE can make the routes like BRS, ABZ, GLA, EDI etc work on the back of US bound or originating passengers then FR cannot extert too much pressure. The persistence of FR in recent years to get after RE on thin domestic routes and routes ex the regions to UK eg GWY MAN etc (FR offering same destinations ex NOC and SNN only to later withdraw some of said routes) proves that FR see the small carrier with smaller aircraft as a threat and FR sought to wipe out RE for fear of a tie up with EI as currently exists. Power to EI and the link with RE for progress and niche operations.

On a final but totally separate note I was in Sligo Airport (1st visit) last Saturday. The inbound flight from DUB had 5 passengers (ATR42) and 11 outbound. In July this route will end and there will be no more scheduled services from the airport. I wonder why RE hadnt looked at putting flights like this into Regional and then marketing services from Sligo to USA and Europe as one stop via Dub. Afterall parking is cheap and with the price of fuel it certainly could be attractive to park at Sligo and fly on. It is sad that it is too late and many staff will lose their jobs.

EI-BUD

[irish laddie]

Excellent post EI-BUD

Ayroplain, I must admit my flights are usually Mon-Thurs, and I realise Saturdays can have leaner loads. My observation from about a dozen sectors year to date has been that virtually all LHR-ORK flights I have taken have had 90%+ LF's. That included during the crew dispute earlier this year. The 724 from ORK seems usually to be circa 70% but the 725 return is usually very well patronaged.

Given timings on ORK-LGW/STN nowadays, EI ORK-LHR seems to be the only show in town when it comes to frequency.

[MCDU2]

Just to put the embraer thing to bed. We are getting a few 2nd hand Spanish 319's. Apparently decision hasn't yet been made whether they are to be replacements for the older 320s or fleet growth.

[Skipness One Echo]

If RE can make the routes like BRS, ABZ, GLA, EDI etc work on the back of US bound or originating passengers then FR cannot extert too much pressure.

Certainly the point to point fares have gone through the roof where the ATR was brought in. Aer Lingus and flybe comparisons fail when one factors in legacy and unionised workforce versus (almost) clean sheet of paper. This idea about feeding the US routes with turboprops isn't new. The Glasgow Herald spouted the same line when Aer Lingus pulled the B737s out of Glasgow in 1991 and replaced them with the Fokker 50 operated by Aer Lingus Commuter at an increased frequency. Does this sound at all familiar? It wasn't a gold mine then and it's not going to be enough to make a real impact outwith the summer peak, also given EI are downsizing US operations as they can't make anything work outside leisure East Coast and Chicago.

As to smaller aircraft, why they didn't downsize some options to say...the A319 is beyond me. File that one next to competing head on with easyJet at their biggest base perhaps?

[racedo]

As to smaller aircraft, why they didn't downsize some options to say...the A319 is beyond me. File that one next to competing head on with easyJet at their biggest base perhaps?

Oh God..........Time for another New Strategy

[brian_dromey]

As I understand it the 146/737/A32X short haul fleet occurred due to various considerations,

In the late 80s/early 90s EI introduced the 737-3/4/500 to replace older 737s. Although the -300 fleet was short lived the -400s were useful for the London routes and the -500s for European services.

The 146s were, I believe, mainly introduced to enable flights to LCY, to compete with the, then new, Virgin Cityjet. of course the 146s were seen around the network, as mentioned the UK in particular. I have never herd that they were introduced to compete with FR. Although the leases may have been cheap, operating costs would not. With 4 (unreliable) engines and a sturdy construction the 146 would have a significant penalty against any 737.

The A321 was the first of the Airbusses in the SH fleet. It was purchased to provide more capacity that the 734 for London routes. It was purchased in favour of the 757. Orders for the A320 followed on as 737 replacements. A google search would suggests that there seems to have been plans to go "all airbus" as early as 2000.

[akerosid]

EI fleet development

I think the late 1980s and early 1990s must have been a hugely frustrating time for EI; the 763 would have been ideal for the ORD and BOS routes, but with no change in the SNN stopover policy, they were leased out; at one time, ALC served more cities in the UK from DUB than could be served from LHR by either BA or BD. But the biggest enemy was not BA or BD, it was its principal shareholder, the govt, which was running scared of the hugely powerful and vociferous SNN lobby.

In retrospect, the change to full Open Skies only happened about a year or so before things started going seriously south here, with the economy. On top of that, the "DubHub" was never really exploited fully, because DM was focused on "point to point" and many UK cities were wound down. It's just a history of missed opportunities.

That chance still exists, thanks to EI Express, but of course, with EI down to only four US destinations, it will only be a limited hub.

As to the A319, well it's certainly an improvement - capacity wise - on the A320; looking at the JP, I guess these must come from Iberia? They'd probably seat around 138-144 in EI configuration.

[Skipness One Echo]

ALC served more cities in the UK from DUB than could be served from LHR by either BA or BD.

I read that four times as Alicante !
Aer Lingus Commuter actually comes at the same time after BA pulled out of Ireland in March 1991 due to mounting losses. BA did have HS748s and ATPs at the time if they had been keen but they've never been able to crack Ireland, (either of them - delete as required !)

Point to point works for Aer Lingus as no one is going to connect in Dublin on anything that doesn't involve long haul. Given that is a contracting market then connectivity will be limited to 4-5 flights out in the morning, the point to point has to support the rest of the days flying.

I would see the likes of GLA being better served by a twice daily A319 than the current Aer Arann set up, certainly on price against Ryanair. I mean when I first started out it was roughly that with two daily jets, a B732 and a BAC111. Given 20 years of relative growth, they've got the same level of seats on the market than they did in 1990.

[Sober Lark]

DUB-JER 62 - (overheard cabin crewmember)

Akerosid. How can you be sure the figure you overheard wasn't in fact the number of unsold seats?

[brian_dromey]

I believe that EIR is reflective of the new strategy, more interest in yields than load factors. This is the right strategy, IMHO. EI are leaving the 1c passengers to FR and others, while there may be a lot of them, they are the first to disappear in recession.

Arguments about the runway at DUB and requirements to stop at SNN are in the past. It's time to move on. EI have a serious problem, in the shape of those A350s. They are far too large and are comically over capable for short runs over the Atlantic. Hopefully these early positions will be attractive to EIs new majority owner, or they can swap them for a dozen A321NEO. The A330 is more than capable of servig EI very well into the 2020s.

I'm not convinced about the 319 for EI, as it was envisioned above. One less cabin crew and 30 less seats is hardly worth it. The gap between the ATR and next smallest aircraft would still be too large. I would expect these to be replacing A320s, allowing better yield and higher loads. Not all routes require the 174 seats of the A320.

[Skipness One Echo]

I'm not convinced about the 319 for EI, as it was envisioned above. One less cabin crew and 30 less seats is hardly worth it.

*cough* easyJet seem to manage OK.

Unless you think a whole new manufacturer and training set up would fit the bill. If they go for the ERJ would Aer Lingus mainline fly them or would they be operated by RE? Perhaps EI own the aircraft, routes and licences, RE supply the crews. I would be surprised if EI mainline got a look in on a smaller aircraft. Before anyone shouts "Jet Blue" they have the dynamics and growth of a start up, not a damaged legacy in a mature and contracting market.

Given the A330 is too much aircraft outwith the summer peak, I agree that the A350 is not a good move.

[airbourne]

Firstly EI-BUD....GREAT POST!!!!

Second:

Does the common type of the A319 and the cost and no need to retrain crews outweigh the cost of an E190?

I know someone pointed out the lease rates between the sometime here, when I suggested in the interest in common fleet type that EI should look at the 318, seating numbers about 115. I think someone said that lease rates on them would be huge by comparison.

I dont think there is one professional, slf, spotter or wanabee that would disagree that EI needs a 100 seater aircraft, why does EI management not see this?

[Skipness One Echo]

when I suggested in the interest in common fleet type that EI should look at the 318, seating numbers about 115. I think someone said that lease rates on them would be huge by comparison.

Seat mile costs are poor, too much aircraft for the volume of seats. Would you see Aer Lingus operting these 100 seat aircraft in their own right or franchising?

[EI Premier]

Arguments about the runway at DUB and requirements to stop at SNN are in the past. It's time to move on. EI have a serious problem, in the shape of those A350s. They are far too large and are comically over capable for short runs over the Atlantic. Hopefully these early positions will be attractive to EIs new majority owner, or they can swap them for a dozen A321NEO. The A330 is more than capable of servig EI very well into the 2020s.

I'm not convinced about the 319 for EI, as it was envisioned above. One less cabin crew and 30 less seats is hardly worth it. The gap between the ATR and next smallest aircraft would still be too large. I would expect these to be replacing A320s, allowing better yield and higher loads. Not all routes require the 174 seats of the A320.

Excellent post and gets to the essence of the real longer term problem for EI. Yes, there is a current problem on some routes with the capacity of the A320. However, this isn't a constant, often cyclical in nature, correlating with seasonal demand. As others have stated, EIR are currently filling a position in the market very well. EI can hardly be expected to move from an All Airbus fleet to EMBs overnight either - that's not going to happen.

The A320 is suboptimal for some routes no doubt at the moment - but, is this issue having a significant impact on the group's overall performance, especially given the Ops of EI Regional - certainly not a material impact. Would the additional, net contribution generated from the deployment of an EMB series for example outweigh the current bottom line performance? In principle it seems very easy - such aircraft with those capacity levels would be ''perfect'' for routes with thinner demand. The reality is less than clear cut. There are extensive costs associated with training of crews and MX staff on a new series - that certainly wouldn't be appropriate for the vast majority of EI's routes.

The real, pressing issue as Brian has pointed out is in fact with the A350 Order. This order, whilst very much being a longer term issue, will have to be revised, because the series on order are entirely inappropriate for EI Operations. Even if fundamental economic principles over time were proven wrong and the economy somehow recovered from it's present abyss like state - demand would still not be sufficient for the capacity of the A350 aircraft on order, at least to ensure profitability.

Concepts of a hub style operation at DUB for EI are well meaning, but is there really any potential for this? I think that we have to accept that traffic growth is and will be limited for some time to come. ''Stagflation'' is the key word at present. Without the current levels of transfer pax through DUB and certainly during Winter 2010/2011 - many long haul flights would have been deeply loss making. There is extremely limited scope for a sharp increase in transfer passenger numbers in the near term.

Growth, at EI - will be limited for some time and the company is not in a position to embark on the acquisition of an entirely different aircraft type. It's net cash position is certainly strong, but not strong enough to withstand a shock of not being able to service further significant debt taken on in acquiring another aircraft series.

EI Premier

[racedo]

The real, pressing issue as Brian has pointed out is in fact with the A350 Order. This order, whilst very much being a longer term issue, will have to be revised, because the series on order are entirely inappropriate for EI Operations. Even if fundamental economic principles over time were proven wrong and the economy somehow recovered from it's present abyss like state - demand would still not be sufficient for the capacity of the A350 aircraft on order, at least to ensure profitability.

Having an order there may not be the worst thing in the world as can always sell that order space on to someone who wants it sooner and is happy to pay a price.

Great to be 10th in line for the new Ferrari but if someone drops £50k for you to wait a year would you do it ?

[EI-BUD]

The 146s were, I believe, mainly introduced to enable flights to LCY, to compete with the, then new, Virgin Cityjet. of course the 146s were seen around the network, as mentioned the UK in particular. I have never herd that they were introduced to compete with FR. Although the leases may have been cheap, operating costs would not

Hi Brian, this is not the case. Aer Lingus introduced the 146 as FR started adding 73S aircraft. Aer Lingus did not start flying to LCY until 1998 . In 1996 Aer Lingus started selling DUB LCY flights under code share with Cityjet who by this stage had severed ties with Virgin. All flights were operated at that time by Cityjet. Aer Lingus advertised the flights in their timetable as 'operated by Cityjet'. So technically Aer Lingus were not competing with Cityjet on London at that time.

At the same time Cityjet were operating DUB MAN ZRH route for EI and some DUB BRU flights were also operated by Cityjet. It wasnt until about 1998 that Aer Lingus started London City in there own right. (Cityjet came off ZRH and BRU in their own rite as part of this arrangement and worked for Aer Lingus instead of losing heavily operating their own services. This is well described in Pat Byrnes book about Cityjet.)

At some point Cityjet withdrew from London City and then Aer Lingus moved in and competed with Jersey European who did it for a time!
The Aer Lingus timetable of the time stated 'We have 4 146 aircraft which operate to UK Regional Airports', so clearly the 146 was purchased as a means to better compete with FR, lease costs being #1 issue compared to 737s were cheap and F50 was no competition for FRs 737s.

Personally, I would love to see Aer Lingus go for C Series. However, that is a while off!!

On the matter of 318s, this is a non starter, they are almost as expensive to operate as 319 and they were never very popular. This going to become very topical in the next year or 2 as Airbus bring out 320 Neo, and Boeing are faced with a major challenge as to what to do with their 737s. There are now good competitors coming along with seats in the 100 seat market with significantly lower operating costs by virtue of size and weight. This type of innovation may pose a real threat to 737s and to 320 family. As such I think Aer Lingus needs to look to something different hence CSeries? What does anyone else think?

EI-BUD

[Cyrano]

Originally Posted by airbourne

I dont think there is one professional, slf, spotter or wanabee that would disagree that EI needs a 100 seater aircraft, why does EI management not see this?

Your implication is that it's a complete no-brainer for Aer Lingus to acquire 100-seaters and that the management is being wilfully obtuse in ignoring the massed ranks of spotterdom waving notebooks and chanting "what do we want? a hundred seats! when do we want them? NOW!"

First, let's be grateful that fleet choices don't get made based on what the spotters want to see!

I don't know the EI management team, but actually I'm inclined to give them the benefit of the doubt on this one.

Right now there are routes which EI cannot serve optimally because the Airbuses are too big, so they have to choose either to operate them at lower-than-ideal frequency or not to operate them.

If they were to go out and buy half a dozen Embraers (for example), they'd need spare parts, training for the engineers, training for the pilots (would there be the expectation of the same salary for a 100-seat pilot as for an A320/321 pilot? I'm only asking...) etc. The one-off costs, and the overhead costs for a relatively small fleet, would be substantial. I'm not saying that there's no case to be made, I'm just saying it's likely they've calculated "with a small Embraer fleet, we could generate €x million extra revenue each year, but it would cost us €y million in new-fleet costs to do so" and the relationship between x and y is not as attractive as one might like.

In any case, if EI really wanted to try out 100-seater capacity without taking on all the associated fixed costs, they could just go and wet-lease half a dozen aircraft from CityJet, who must have a few spare...

C.

[EI-BUD]

Right now there are routes which EI cannot serve optimally because the Airbuses are too big

Cyrano
you are completely right on this one but ironically there are many routes that FR dont operate on for this reason!!! Should the FR model too look at this to be more competitive against airlines like Flybe?

EI-BUD