Aer Lingus - 5

[VanBosh]

Did we ever find out where they got the aircraft for the first batch of LGW routes?

[Shamrock350]

Colegate,

I wouldn't write Aer Lingus off, it will certainly be tough but not impossible for them to make a go of London Gatwick.

Aer Lingus shrugs off EasyJet Gatwick attack

Aer Lingus has described EasyJet’s move to compete on three routes being set up by the Irish carrier from Gatwick as a “panic” reaction.
Corporate affairs director Enda Corneille said Aer Lingus had big plans for Gatwick in addition to the network of new European routes being established from April.

http://www.travelmole.com/stories/1134472.php

Some interesting points:

- 75,000 seats booked

- Big plans for the base

- Route announcements imminent

[racedo]

Grim January numbers

Jan 2009 passengers 661,000 v 706,000 in 2008 down 6.4%

Shorthaul down by 6.1% with load factor of 64.6% down 1.5%

Longhaul down by 8.6% with load factor of 63.8% up 2.4% with capacity down 15%.

RTÉ Business: Aer Lingus passenger numbers down 6.4%

[Lord Lardy]

Grim January numbers

I wouldn't be concerned with numbers. It's yield at the end of the day that really only counts on the balance sheet. What the figures above prove is that it has made sense to reduce their exposure to their transtlantic operation at the present time when their simply isn't the traffic for it to make money during these winter months. This is in line with airlines across Europe who have seen a decline in long haul traffic. A long haul operation comes at a large cost. This is acknowledged by Ryanair themselves as they have openly said if they were to start such an operation you need a mixture of both low and very high fares for it to work. If Aer Lingus were unique in seeing a drop then it would be a problem. With other airlines reporting similar demand declines then it proves sensible.

The decrease in short haul is not surprising, and when you take into consideration the increase in capacity from last year in the current environment these figures don't appear to be too bad. Remember airlines don't make money in Jan, Feb or March. I think this will be further highlighted in a few months when Ryanair announce their Q4 results, which for Aer Lingus will be the equivalent of their Q1.

Ryanair are one of the few airlines that in the recent past that have increased their passenger numbers. The latest by them is 13% in Q3 and yet lost 100 odd million, which coincidently included the peak Christmas season. Ryanair's decision to park aircraft for the winter and reduce exposure to me makes sense, just like Aer Lingus have with their transatlantic operation. Bums on seats on longer flights means additional weight which means more fuel which in turn is further cost. You will find that the 'free seat' deals are usually offered on the shorter flights. If you replenish the extra cost by covering it with ancillary revenue per passenger it makes sense. However if you don't and you don't generate the extra revenue to cover the cost then it's simply financial suicide. I highlighted a long time ago the fact that Ryanair were giving away millions of free seats from last autumn. This means really only one thing. They are not immune to the current recession and were struggling with forward bookings. They have shareholder targets to increase their numbers year on year so this is a tactic used to do it. It's very easy to increase your numbers in any line of business if you hand them out for nothing, however as proven in the past few days it dosen't exactly help your financial statements.

Aer Lingus will have it's difficulties this year trying to break into the London market. Coupled with this the package holiday may prove to be popular again with the way the sterling/euro rate has gone. As such all trips to eurozone are obvioulsy more expensive.

However, if all airlines are struggling with forward bookings, and with Ryanair giving away these enormous amounts of cheap seats, I find it very hard to believe that they will not be running themselves into short term poverty when they take delivery of a 47 odd net increase in aircraft numbers in the coming months. They have said they will pick up the waste from airlines going under, which I would agree with. However the numbers they quoted as going under have not as yet come to fruition. Their exposure to a declining market in terms of yield will be enormous. With their reserves they will be in a postion to take the hit, but I suspect the bruises will remain for some time.

[suasdaguna]

they are not good at all Michael but taking it into context everyone in January is hurting, parking up aircraft etc. FR's figs will be grim too if they continue with their lunacy 1 bag on board model where one has to stuff their duty free into the one bag, believe me it is p@ssing a lot of people off and the hassle factor will see a lot of floating pax's go with the greens. 09 will be interesting for all concerned.

[Shamrock350]

The January numbers are no surprise and were to be expected. The reductions in capacity for long-haul seem to be taking effect with the increase in loads there, this should improve further over the next few months. The overall load factor has increased very slightly to 64.3%, an increase of from 64% last January.

[racedo]

I find it very hard to believe that they will not be running themselves into short term poverty when they take delivery of a 47 odd net increase in aircraft numbers in the coming months.

People keep taking this as Gospel BUT given they have 41 Operating leases then numbers of new may not be as significant as people are assumming.

[Gold Rivet]

The 'operating leases' are a tax avoidance scam. The aircraft are owned by Ryanair, as is the lease compamny which they set up in Tax Haven Cyprus to avail of capital allowances.

Full details here: Ryanair pays less tax than boss O'Leary - Irish - Independent.ie

[thebig C]

I notice Ezy are putting it up to EI as regards the Gatwick base.

In selecting routes, is there an opportuinity for EI to do Gatwick-Vilnius?? FlyLAL operated this route, until their recent demise! It was one of their better routes. I don't think Vilnius has flights to any other London airports so there is great potential. Also, EI have been flying to Lithuania for a few years so presumably have built reputation/relationships.

Also, Vilnius is the Eurpean Capital of Culture 2009! With their biggest carrier collapsing......they might be generous on landing charges to encourage tourism and new business!

Just a thought

[akerosid]

EI has decided to lease two A320s, due for delivery imminently, which were to have been delivered to Iberia.

The aircraft are both CFM engined...MSN 3755 to be registered EI-EDS and MSN 3781 to be registered EI-EDP(Was originally to be registered D6-CAU but will change to EI-EDP after delivery and for first commercial flight). Both are RBS AVIATION CAPITAL leased. No info on confirmed delivery dates yet but imagine it will be asap.

[Just a spotter]

(At the risk of being shunted into Spotters) 3755 was due to be D6-CAT and seems to have been destined for Comoro Island Airlines.

Any idea on the length of the lease? Will they be stop gap or long term?

Either way, assuming the business plan behind them is sound, it's good news.

JAS

[hamiltonyhm]

Was just looking for flights from LGW-JFK. Checked BA and fare was £1077 each, then checked with Aer Lingus albeit via DUB and a 4 hour connection time outbound but only £593 each. Well worth the 4 hour wait for 2 tickets for the price of BA's 1. Is there much difference between the two carriers with regards to on-board service? thanks

[MUFC_fan]

There is quite a big difference in service, BA being the better but for an 8 hour flight it really isn't worth the extra money but you are making a stop.

It depends whether you are not too bothered about a stop over. Personally I would hop on a plane and head up North to MAN and jump on DL's new 757s which are fantastic!

What am I saying?! Aren't we all supposed to be heading down south to LHR and not north to MAN from there?!

Seriously, DL 767-300 is rubbish from LHR but the 757 from MAN is If you are flying in the summer season then the DL 767-400 from LHR is also very good and if I am not mistaken it will include the new layout which should be fanastic!

If flying in the next month head up to MAN if the price is right.

Summer go DL direct, again if the price is right!

[Skipness One Echo]

Geeez when are you flying? The LGW-JFK must be doing better if that's the only fares that're left (!)

[The96er]

Actually, the BA LGW-JFK loadings are extremely poor, Although the back end seems to sell very well, the front end (Yield end Mr Skipness) struggles to sell at all. Average bookings for first class are about 1 per day, club class averages about 12 seats/day (Config for J class = 48), in other words, about 1/4 full. Just for comparison - the average load in J class for the MAN-JFK was about the same, i.e average of 12/day (config for J class = 24) or about 1/2 full !!

[uncomfortable]

The BA product is better than EI, but does not justify that kind of difference.
Regarding the stop, it has to be noted that in DUB you will be able to clear US Immigration, therefore saving approx 1hr in JFK and an almost guaranteed horrendous queue. People always forget about that, but I think it is one of the best selling points for EI on the transatlantic services

[tigger2k8]

have to agree with uncomfortable, have had a relative who stopped in Ireland to clear immigration, she said it was great.. as before she flew direct and had to stand in a queue after a 6+ hour flight

[CallBell]

Regarding the stop, it has to be noted that in DUB you will be able to clear US Immigration, therefore saving approx 1hr in JFK and an almost guaranteed horrendous queue.

Just a point about the pre-clearance. Not all flights from DUB will preclear. If the flight to JFK is EI109 ,(and i think with a 4 hr layover in DUB it may well be) it will not use the pre-clearance facility. Just wanted to throw that out there in case it was a deciding factor.

[Tom the Tenor]

Anyone have any info on why the return service on today's EI Lyon to Dublin has been so delayed? Now due out of Lyon around 10 pm, not sure if that is GMT+1 or not though. Normally leaves Lyon around 4 pm ish if I remember correctly. Also, last Friday's flight to LYS is reported to me as being operated by a hire-in - again, any info? Bigger hired equipment for last Saturday's rugby at Croker?

Thanks.

[uncomfortable]

Interesting. Can you tell us why the EI109 does not use the pre-clearing facilities at DUB? It seems quite a waste to have that kind of facility at DUB and not using it...