Aer Lingus - 6

[akerosid]

There was an article today in the Times, to the effect that if FR walks away from EI, EY is ready to step in. EY, incidentally, is also about to buy a significant shareholding in Jet Airways of India.

I mention this because EY, as an investor, will presumably be very interested in encouraging EY to expand. What about the possibility of joint fleet purchasing and other economies of scale by all four airlines under the EY umbrella (EY, 9W, AB, EI); together this carriers would have a sizeable requirement for A320NEO/737MAX and A350/787 aircraft.

AB has a bit of a mish-mash of a fleet, with both A320s and 737s. I wonder if EY might "encourage" AB to co-operate closely with EI, even encourage joint management of the two, under EI. Just throwing it out there ...

[racedo]

EI's cash pile is circa €700m, with debt level of about €550m which is being reduced.

Or in real terms supposedly €150 m in cash going into a winter in the midst of a recession and they lose money in Winter.

Hmmm

[waffler]

I was wondering when you would slip your knife in Racedo.
As you know well most of the loans were used to buy aircraft which still have a value.
Back to you.

[racedo]

I was wondering when you would slip your knife in Racedo.
As you know well most of the loans were used to buy aircraft which still have a value.
Back to you

So you support the idea that Aer Lingus should buy a majority share in Virgin or disagree that Aer Lingus lose money in the winter ?

Quite a bit of the loans were used on failed bases, paying off people to re-employ them and settling employees tax debts.

[curser]

Always the same negativity racedo, post after post...year after year...its just so terribly sad. I suspect you are being deliberately obtuse in answering Waffler, who points out quite clearly that Aer Lingus's financial position is quite remarkably sound especially given the back drop of economy and local government subsidised competition. Admittedly money was wasted when a ryan air accountant popped in to show all "how it's done" but much of what you contend has cultivated a very lean machine. A machine so lean that they are making profit! Lets stick to the facts; Aer Lingus makes money. Aer Lingus competes in its market and wins. MOL wants to buy it for expressly those reasons. Hope you slept well, now pop a downer and retort...you know you're gonna!
ps. most carriers lose money over the winter racedo its the nature of the beast..suppose they could just ground the fleet on some remote airstrip for the duration but that doesn't do much for connectivity for Ireland which is kind of the point of having an air fleet but suspect that'll go over your head.

[mart901]

The business of FR grounding it's fleet over winter is being made out to be the only sensible and viable way to run an airline. Apart from the above mentioned connectivity issues just how brand damaging is it? To me it's more a drastic way to deal with having ordered far to many aircraft for the recession hit times we live in.

[MCDU2]

The business of FR grounding it's fleet over winter is being made out to be the only sensible and viable way to run an airline.

Not necessarily. He gets away with it because most of his workers are contractors who don't get paid unless they are flying. He also screws his suppliers down so that there is no fixed costs element of their contracts.

Other airlines mitigate the winter months by wet leasing. Others make stonking profits in the summer to offset lower cashflows during winter.

Most businesses have a seasonal aspect to them. Aviation is no different.

FR was lucky enough to have gotten its aircraft at heavily discounted rates. Therefore having the aircraft parked up is not so much of an issue for him, whereas it would be for a national full service airline. He will never get these discounted rates again from Boeing or Airbus. His maintenance costs are starting to rise with his fleet age and he is having to face the reality that he will start incurring significant and unavoidable costs unless he ponies up and buys some new airframes at the going rates.

[dublinaviator]

Aer Lingus are to announce in the next 24 hours that they are to commence short-haul flights from next March on behalf of another airline:

The Sunday Business Post - News - Aer Lingus expected to announce short-haul tie-up

It has to be Virgin Atlantic...

[GAZMO]

they have been talking to VS for some time re connections via LGW and LHR

[ayroplain]

So, what routes do you think EI will drop to use (how many of?) their 320's on Virgin's behalf?

[dublinaviator]

Originally Posted by ayroplain

So, what routes do you think EI will drop to use (how many of?) their 320's on Virgin's behalf?

Aren't Aer Lingus due 2 more A319s around the same time?

[Aerlingus231]

There are plenty of A320's sitting on the ramp at DUB not being used at the moment since their previous owners have collapsed, perhaps Aerlingus could get a lease on some more aircraft to operate the routes. I think it's the fact that virgin don't have pilots or crew at the moment to operate A320's that means having to lease out the route. It'd also mean that the new aircraft could be painted in virgin colours, which has been rumoured.

[Papa2Charlie]

I understood that Avion Express were going to be operating for Virgin? They have been recruiting for LHR based crews for several weeks now with a start date of March 2013 which ties in with the Virgin timing for their domestic services.

[Cyrano]

Aer Lingus had bid for the LHR-EDI/ABZ routes themselves (and lost out to Virgin) so clearly they had a solution in mind for aircraft. I believe there may be a couple of EI A320s whose leases are due to expire in 2013 and which can be extended.

Originally Posted by AerLingus231

I think it's the fact that virgin don't have pilots or crew at the moment to operate A320's that means having to lease out the route. It'd also mean that the new aircraft could be painted in virgin colours, which has been rumoured.

I think it's more the fact that Virgin has no experience of short-haul operations and no real capability to develop that experience quickly. And the Virgin livery will certainly be on the aircraft (whoever operates them) - that's not just "rumoured".

[VanBosh]

So are Aer Lingus going to operate this service in the same way that Aer Arann operate EI Regional for them?

Will they be selling the flights on their own website similar to the united MAD-IAD route?

Interesting move for them, but if they are one of only 3 airlines making money in europe as per the article, you would wonder if they could not make more with the aircraft going alone? I suppose the Virgin brand/long haul feed may be the difference

[Cyrano]

Originally Posted by VanBosh

So are Aer Lingus going to operate this service in the same way that Aer Arann operate EI Regional for them?

No, I believe it'll be a wet-lease operation. In other words, Virgin (assuming it's Virgin) pay EI a fixed amount per block hour to cover the operating costs plus some profit. It's then Virgin's responsibility to sell enough seats to make a profit. The commercial risk is with Virgin, and EI gets guaranteed revenue (hence the attraction for EI).

Aer Arann on the other hand is a franchise operation: Aer Arann pays Aer Lingus a franchise fee (typically a percentage of revenue), but if the flights don't fill up, it's Aer Arann as the operator who loses out - the commercial risk is with them.

[EI-A330-300]

I understood that Avion Express were going to be operating for Virgin? They have been recruiting for LHR based crews for several weeks now with a start date of March 2013 which ties in with the Virgin timing for their domestic services.

Indeed that would seem the case:

Carrier opportunities

Avion Express is recruiting Airbus A320 pilots and cabin crew for a longer term contract for scheduled operations based in London Heathrow, starting on March 2013.

Mabye people should look closer to home...

[racedo]

Always the same negativity racedo, post after post...year after year...its just so terribly sad. I suspect you are being deliberately obtuse in answering Waffler, who points out quite clearly that Aer Lingus's financial position is quite remarkably sound especially given the back drop of economy and local government subsidised competition. Admittedly money was wasted when a ryan air accountant popped in to show all "how it's done" but much of what you contend has cultivated a very lean machine. A machine so lean that they are making profit! Lets stick to the facts; Aer Lingus makes money. Aer Lingus competes in its market and wins. MOL wants to buy it for expressly those reasons. Hope you slept well, now pop a downer and retort...you know you're gonna!
ps. most carriers lose money over the winter racedo its the nature of the beast..suppose they could just ground the fleet on some remote airstrip for the duration but that doesn't do much for connectivity for Ireland which is kind of the point of having an air fleet but suspect that'll go over your head.

Why not address the issues rather than another personal dig.

[DollarBill]

Why not discuss the issues rationally rather than another personal anti-EI diatribe?

[PPRuNe Pop]

Cut and paste is never always a good option to encourage people to listen. I suggest you stick to facts. Its much easier that way.