Aer Lingus - 6

[Jamie2k9]

It may in fact be that EI only break even or loose money on short haul.

There is no may about it, short haul makes little profit, without long haul there would be no profits. They are feeling the recent FR capacity increases out of DUB this winter and have made adjustments to off set losses.

[EI-BUD]

Jamie,

Fair enough comment and clearly the data on how they fair head to head v Ryanair is not publically available , but EI have survived in the face of incredible competition, who equally says that FR profit on every route where they compete with EI either. FR have deep pockets to hurt EI and they haven't kept on every route where the 2 meet , though there are few enough examples.

My point is EI are resilient and their model enables them to compete with FR on the scale that they do ...

[Skipness One Echo]

So eight aicraft make all the money? No wonder they're vulnerable.

[Epsomdog]

There is no may about it, short haul makes little profit, without long haul there would be no profits.

Without short haul, longhaul would have no pax to fly! Can't see them making a profit then!

You have to take account of the whole operation!

[AerRyan]

Im starting to wonder though, why does EI fly from cork?

[Jamie2k9]

Jamie,

Fair enough comment and clearly the data on how they fair head to head v Ryanair is not publically available , but EI have survived in the face of incredible competition, who equally says that FR profit on every route where they compete with EI either. FR have deep pockets to hurt EI and they haven't kept on every route where the 2 meet , though there are few enough examples.

My point is EI are resilient and their model enables them to compete with FR on the scale that they do ...

Very true and EI will do fine but it is very competitive and always a risk.

So eight aicraft make all the money? No wonder they're vulnerable.

11 but they contribute the bulk of profits which I expect is repeated across Europe. Carriers like KLM/AF/LH are not trying to set up locos for nothing.

Without short haul, longhaul would have no pax to fly! Can't see them making a profit then!

You have to take account of the whole operation!

Indeed but transit passengers are low on the grand scheme of total short haul traffic + take EI regional away and they are lower. It is good to see them targeting new European points for transit this summer which have next to no t/a services.

SH makes profit for 6 months and loses for another 6 months. Sooner EI manage to cut down losses in winter and increase LF's they will be fine. I expect the results this month will show a much better performance over this winter which is good.

[Skipness One Echo]

11 but they contribute the bulk of profits which I expect is repeated across Europe.

How do we get to eleven long haul aircraft? They have seven active A330s and three lease B757s? I didn't count the B757s as they're not mainline but you get the idea. They can't be flying 38 narrow bodies to feed around ten long haul aircraft split across two long haul airports. The only feed is at DUB, if short haul can't make it's way in that business model, then it's dangerously skewed to one part of the business?

[Heathrow Harry]

"Im starting to wonder though, why does EI fly from cork?"

politics of course

[Jamie2k9]

How do we get to eleven long haul aircraft? They have seven active A330s and three lease B757s? I didn't count the B757s as they're not mainline but you get the idea. They can't be flying 38 narrow bodies to feed around ten long haul aircraft split across two long haul airports. The only feed is at DUB, if short haul can't make it's way in that business model, then it's dangerously skewed to one part of the business?

Just because you don't count them doesn't mean they should be excluded. 11 also included the additional 332 coming.

It's 36 narrow bodies on short haul and just because it don't make major profit means nothing as it's performance is always improving however it has being hit with industrial action over the last 2 years which will always impact consumer confidence. Thankfully that's all done with now!

"Im starting to wonder though, why does EI fly from cork?"

politics of course

They would drop Cork if they needed to, politics is Shannon's tool but they wouldn't let that stop them which has being demonstrated over the last number of years.

[Una Due Tfc]

The 757s in Shannon do make money to be fair. SNN-BOS wouldn't be getting upgraded to a 767 if it wasn't making money, and SNN-LHR feeds BA so I don't see why that would go if IAG took over. Eventually the 757s will be replaced by 321 neos. However given IAG's policy of focusing on their hubs, would there be any based in SNN in the long run? If not one of DL/AA would probably go year round.

I wasn't able to decide if IAG would be good or bad for EI, going through all the positives and negatives. I now think it will be a huge opportunity missed in the medium to long term if IAG don't take over. Once again parish pump politics is threatening to screw this airline, and the Irish aviation sector as a whole.

[Skipness One Echo]

Just because you don't count them doesn't mean they should be excluded. 11 also included the additional 332 coming.

Is that an ex EI machine coming back or a new build? The B757s are not flown by Aer Lingus though, they're outsourced, so being slightly picky but hey. Also taking out the VS A320s takes it back to 35 IMHO but you get the idea.

ust because it don't make major profit means nothing as it's performance is always improving

Seriously, one bad year, one predatory competitor will kill this stone dead. Any commercial operator (excluding the usual ME3 types) could be dead in months of a sustained assualt on their long haul. The standalone Irish model of feeding long haul via DUB already appears to be at maximum capacity, what's next if not IAG?

[cuallnow]

Strange sort of a circular argument/game where we can arbitrarily discount elements of a business in order to prove viability as a whole. But sure lets play the game..if one only counted aircraft Fr's dublin based aircraft and determined their profitability should we then turn out the lights in their little swords office? Or could it be said that completion on Irish short haul routes is fierce and that consequently margins are slim..to the betterment of the Irish consumer. I'm sure Fr would have love to have done away with Aer Lingus and jack up yields like they do in every other theatre but Aer Lingus has a compelling offering unmatched by Fr although I'm delighted to see them copying the Aer Lingus model now, just a shame they haven't the grace to admit where they got their ideas.

[EI-BUD]

Good points Cuallnow,

The scale of TA ops is the key that unlocks the sustainability of the short haul operation . Stobart Air competing on UK regional routes v Ryanair is a case in point. Aer Lingus need get after growth on TA ops in my view. No good reason that Dublin cannot become a hub airport of choice for connections between US and EU and further a field. plenty of capacity in DUB to support expansion, although some short haul may need to use T1!!

[Jamie2k9]

Is that an ex EI machine coming back or a new build? The B757s are not flown by Aer Lingus though, they're outsourced, so being slightly picky but hey. Also taking out the VS A320s takes it back to 35 IMHO but you get the idea.

It appears not to be EWR, so not sure where they are getting it from. I could double check but they have 40 short haul aircraft so 36 for their own operations.

Seriously, one bad year, one predatory competitor will kill this stone dead. Any commercial operator (excluding the usual ME3 types) could be dead in months of a sustained assualt on their long haul. The standalone Irish model of feeding long haul via DUB already appears to be at maximum capacity, what's next if not IAG?

A little dramatic, they have gotten through very hard years already and short haul is much more sustainable than it has being for a long time with Ryanair on top of them. Feeding long haul is not at max capacity by a long shot. Short haul profitability can be improved and as they continue to manage capacity and closing LGW base next month, CORE which has just commenced and will deliver up to 20% savings by getting rid of older staff for new ones and they delivered record revenue in Q3.

I think you need to put transit passengers at DUB into context with actual passenger numbers:
Short Haul - 8.45 million
Long Haul - 1.35 million
Regional - 1.31 million

750,000 transit - many brought by EIR/EI to EI but EI to United as well as American have increased transit a lot last year.

[Skipness One Echo]

Funny I thought the infrastructure at T2 in terms of CBP was maxed out already? Any strategic increase would need new capital investment and passengers going West all tend to travel at the same time. Feeding long haul has growth potential, the actual long haul operation is boxed in by constraints at DUB.
Aer Lingus has been through tough times and been bailed out by.....taxpayer €€€€€. I should have said "any commercial business can die in one bad season". A certain CEO told me that as he punched a desk in time to the syllables.....

[Jamie2k9]

Funny I thought the infrastructure at T2 in terms of CBP was maxed out already? Any strategic increase would need new capital investment and passengers going West all tend to travel at the same time. Feeding long haul has growth potential, the actual long haul operation is boxed in by constraints at DUB.
Aer Lingus has been through tough times and been bailed out by.....taxpayer €€€€€. I should have said "any commercial business can die in one bad season". A certain CEO told me that as he punched a desk in time to the syllables.....

The constraints which many can be addressed without investment are not a problem for Aer Lingus at all.

[ayroplain]

Aer Lingus has a compelling offering unmatched by Fr although I'm delighted to see them copying the Aer Lingus model now, just a shame they haven't the grace to admit where they got their ideas.

Pardon me while I break out into uncontrollable laughter. Where have you been for the last 30 years?

[Belboy]

I hear Stephen Kavanagh has been appointed CEO from March 1. Maybe this is already common knowledge and I'm just late in picking it up.

[cuallnow]

You're excused ayroplane, kind of you to ask and show deference. In the last 5 years, has the Aer Lingus model moved toward Fr's or vis versa. If you can answer that honestly for yourself you may recognise a laughing fool.

[AerRyan]

Aer Lingus has very much moved towards a LO-CO business model, not the other way at all. You have to pay for everything on Aer Lingus, very much the same as ryanair. The only difference is that Aer Lingus has green planes with no internal advertising.