Aer Lingus - 6
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I didn't want to speak of "breach of contract" as such; I don't know what was agreed between the Irish govt and IAG; I think the agreements there focused mostly on access to LHR rather than t/a routes. However, the fact of the matter is that on principal route like BOS, ORD and JFK, there would be no capacity increase if EI sticks with the 330-300 (or A330-900Neo) for another few years
I don't think there's much the Irish govt - since it's no longer a shareholder in EI - can do if IAG were to go down this route, other than express its displeasure, and I'd be surprised if it even went that far.
However, as a nuclear option, to "incentivise" a second look at this, it could also become more aggressive in touting fifth freedom routes from DUB to North American destinations, on the basis that if EI is not going to provide extra capacity, the govt will find someone who will. EK has sought fifth freedom routes from DUB to N/A in the past (but has been turned down). Maybe that would be the best response; the govt no longer has any duty towards EI and if EI does not provide the extra capacity, then the govt will have to look to alternative sources of extra capacity. EK on DUB-JFK might well "encourage" another look at EI's planned capacity growth ...
I don't think there's much the Irish govt - since it's no longer a shareholder in EI - can do if IAG were to go down this route, other than express its displeasure, and I'd be surprised if it even went that far.
However, as a nuclear option, to "incentivise" a second look at this, it could also become more aggressive in touting fifth freedom routes from DUB to North American destinations, on the basis that if EI is not going to provide extra capacity, the govt will find someone who will. EK has sought fifth freedom routes from DUB to N/A in the past (but has been turned down). Maybe that would be the best response; the govt no longer has any duty towards EI and if EI does not provide the extra capacity, then the govt will have to look to alternative sources of extra capacity. EK on DUB-JFK might well "encourage" another look at EI's planned capacity growth ...
Surely you're conflating capacity growth with profitability, too much capacity isn't what a highly seasonal operation like DUB-US needs, hence the B757s being introduced.
Also, I think it's fair to say that just because the Irish Gov has no direct stake in Aer Lingus, it's a long way from encouraging a Middle Eastern airline to aggresivley target an Irish based company, the de facto flag carrier for want of a better expression.
Wasn't there a fuss at the time when Airbus tweaked the A350 design to the XWB that this was a little too capable for what EI was after?
Also, I think it's fair to say that just because the Irish Gov has no direct stake in Aer Lingus, it's a long way from encouraging a Middle Eastern airline to aggresivley target an Irish based company, the de facto flag carrier for want of a better expression.
Wasn't there a fuss at the time when Airbus tweaked the A350 design to the XWB that this was a little too capable for what EI was after?
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Wasn't there a fuss at the time when Airbus tweaked the A350 design to the XWB that this was a little too capable for what EI was after?
3rd Mar 2016 11:33
3rd Mar 2016 11:33
It was sometime during the Aer Lingus turn around of 2009-2011 when Mueller stated the A350 was too much aircraft for them but even then he stated routes like JFK, BOS and ORD could easily absorb it. Sometime towards the end of his time as CEO Aer Lingus renegotiated the order again, this time choosing the 'Regional' version and even after reevaluating it against the newly launched A330neo, they still opted to stay with the A350.
So the only time Aer Lingus ever openly doubted the A350 was during their own crisis and restructuring.
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Aer Lingus are steadily growing transatlantic capacity, with the addition of new aircraft this year and then again in 2018 with 350's, it also has significant work with ASL. In percentage terms the T/A business is growing strongly and is being developed with prudence.
IAG is a commercial enterprise, and I would guess that there is competition on a commercial basis for the capital investments that they make. IB are getting new units for their lucrative South American routes etc.
Willie Walsh has went on the record in relation to the possibilities of getting second hand aircraft which may come available, I realise this was more for short haul, but if such aircraft can be secured, the lead time may not be as long as say buying new from Airbus....or indeed Boeing.
IAG is a commercial enterprise, and I would guess that there is competition on a commercial basis for the capital investments that they make. IB are getting new units for their lucrative South American routes etc.
Willie Walsh has went on the record in relation to the possibilities of getting second hand aircraft which may come available, I realise this was more for short haul, but if such aircraft can be secured, the lead time may not be as long as say buying new from Airbus....or indeed Boeing.
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Surely you're conflating capacity growth with profitability, too much capacity isn't what a highly seasonal operation like DUB-US needs, hence the B757s being introduced.
Surely you're conflating capacity growth with profitability, too much capacity isn't what a highly seasonal operation like DUB-US needs, hence the B757s being introduced.
Also, I think it's fair to say that just because the Irish Gov has no direct stake in Aer Lingus, it's a long way from encouraging a Middle Eastern airline to aggresivley target an Irish based company, the de facto flag carrier for want of a better expression.
Wasn't there a fuss at the time when Airbus tweaked the A350 design to the XWB that this was a little too capable for what EI was after?
Also, I think it's fair to say that just because the Irish Gov has no direct stake in Aer Lingus, it's a long way from encouraging a Middle Eastern airline to aggresivley target an Irish based company, the de facto flag carrier for want of a better expression.
Wasn't there a fuss at the time when Airbus tweaked the A350 design to the XWB that this was a little too capable for what EI was after?
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Surely you're conflating capacity growth with profitability, too much capacity isn't what a highly seasonal operation like DUB-US needs, hence the B757s being introduced.
Also, I think it's fair to say that just because the Irish Gov has no direct stake in Aer Lingus, it's a long way from encouraging a Middle Eastern airline to aggresivley target an Irish based company, the de facto flag carrier for want of a better expression.
Wasn't there a fuss at the time when Airbus tweaked the A350 design to the XWB that this was a little too capable for what EI was after?
Also, I think it's fair to say that just because the Irish Gov has no direct stake in Aer Lingus, it's a long way from encouraging a Middle Eastern airline to aggresivley target an Irish based company, the de facto flag carrier for want of a better expression.
Wasn't there a fuss at the time when Airbus tweaked the A350 design to the XWB that this was a little too capable for what EI was after?
1) Was IB's plan for A359 utilisation better/more profitable/more aggressive than that provided by EI?
2) How is DUB - being a considerably smaller market expected to complete with Madrid?
IAG sees no problem in competition between its own carriers, why should it be surprised when a govt wants to spur growth in its own markets? It can hardly be surprised, given that the Irish govt has always wanted to encourage t/a growth ex-DUB. We can look at this from the perspective of encouraging a foreign carrier to compete with EI ex-DUB ... OR, we can look at it from the perspective of a government seeking to maximise growth and trade, which it should be doing.
It's a brave new world; I think the govt should be actively exploring avenues for growth and if IAG (no longer Irish owned) won't provide that growth, then maybe it is time for the govt to seek alternatives - not wholesale, but certainly in particular markets. What's sauce for the goose ...
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akerosid,
I read that article with some interest. It makes clear what I suggested on here a few days ago, each of the carriers within the IAG group must pitch its business plan and compete for investment for new aircraft....
Vueling has been quite bolshy of late, especially elbowing in on easyJet, e.g. Luton and other UK routes, and Rome etc. Vueling has a great name in Catalunya, in many ways gaining the place of Spanair as a local airline in the Barcelona. So Vueling can certainly hold its own in that market, I'd expect them to stick around. In the same way that Aer Lingus is so well known in Ireland, the exercise to have the sister airlines almost segment the market will be a worthwhile experiment...
I read that article with some interest. It makes clear what I suggested on here a few days ago, each of the carriers within the IAG group must pitch its business plan and compete for investment for new aircraft....
Vueling has been quite bolshy of late, especially elbowing in on easyJet, e.g. Luton and other UK routes, and Rome etc. Vueling has a great name in Catalunya, in many ways gaining the place of Spanair as a local airline in the Barcelona. So Vueling can certainly hold its own in that market, I'd expect them to stick around. In the same way that Aer Lingus is so well known in Ireland, the exercise to have the sister airlines almost segment the market will be a worthwhile experiment...
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It's certainly true that IAG plays its airlines off against each other as far as investment is concerned and I suspect Aer Lingus will be having some tough conversations with IAG about its financial targets.
However, IAG's airlines are heavily dependent on each other's distribution networks and those of their alliance partners.
Vueling is, and will be even further from the end of March, codesharing extensively with BA on many routes from BCN and on its routes from UK regional airports. I suspect it will be doing the same with Aer Lingus from DUB.
It has often been claimed that one of Iberia's best performing routes is LHR-JFK, a route which it of course doesn't operate. The instant success of recent BA transatlantic route launches to San Diego and Austin is in part due to support from American Airlines, a sharp contrast to its new routes to Asia which have taken much longer to gain traction.
Distribution through AA and BA's sales channels should give Aer Lingus transatlantic a big boost and it will be interesting to see how its presence at UK regional airports will develop under IAG.
However, IAG's airlines are heavily dependent on each other's distribution networks and those of their alliance partners.
Vueling is, and will be even further from the end of March, codesharing extensively with BA on many routes from BCN and on its routes from UK regional airports. I suspect it will be doing the same with Aer Lingus from DUB.
It has often been claimed that one of Iberia's best performing routes is LHR-JFK, a route which it of course doesn't operate. The instant success of recent BA transatlantic route launches to San Diego and Austin is in part due to support from American Airlines, a sharp contrast to its new routes to Asia which have taken much longer to gain traction.
Distribution through AA and BA's sales channels should give Aer Lingus transatlantic a big boost and it will be interesting to see how its presence at UK regional airports will develop under IAG.
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Can I just throw out a few more questions on the whole EI/IAG relationship, as there are a few points I'm unclear on:
- IAG is on record as having stated that it wants to build hub at DUB. How does this manifest itself? What exactly is it going to do to ensure this happens (or is it all down to EI)?
- If there is a competition for new acft between BA, IB and EI for new long haul aircraft, in what circumstances could EI possibly win this, given that LHR and MAD are bigger hubs.
- If EI's business plans are found lacking, then why is senior management still in place? If they produce growth plans which result in aircraft intended for them being reassigned to other operators, either (a) the other markets are much bigger and EI/DUB will always be the cinderella, or (b) EI's growth plans are not sufficiently ambitious. Which is it, and what will be done to address it?
- Does EI have the right/power to source acft not ordered directly by IAG, e.g. through a lessor, if it does not get the aircraft it needs from IAG?
- IAG is on record as having stated that it wants to build hub at DUB. How does this manifest itself? What exactly is it going to do to ensure this happens (or is it all down to EI)?
- If there is a competition for new acft between BA, IB and EI for new long haul aircraft, in what circumstances could EI possibly win this, given that LHR and MAD are bigger hubs.
- If EI's business plans are found lacking, then why is senior management still in place? If they produce growth plans which result in aircraft intended for them being reassigned to other operators, either (a) the other markets are much bigger and EI/DUB will always be the cinderella, or (b) EI's growth plans are not sufficiently ambitious. Which is it, and what will be done to address it?
- Does EI have the right/power to source acft not ordered directly by IAG, e.g. through a lessor, if it does not get the aircraft it needs from IAG?
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Aeroskid - EI management will have to work within the parameters they are given by their owners IAG. IAG will control fleet purchase decisions, slots, capital investments and purchasing. They will leave the running of EI to the management within agreed business plans. There won't be the opportunity to source aircraft elsewhere avoiding IAG agreement.
It is worth remembering there are benefits to this. Take A350s for example. If for example growth didn't materialise quick enough, IAG could juggle delivery slots between the carriers in the group to better use them. I.E. create opportunities for internal deferral of deliveries etc. It works both ways can save empty seats and carrying the cost of premature deliveries for a carrier. Perhaps it could mean season movement of aircraft - EI on North Atlantic in the summer and IB on South Atlantic in the winter. Who knows.
You are right to see that this creates competition between carriers on costs and revenue. The group are also using it as a way to move management between carriers. e.g. CEO of Vuelling moving to BA, CEO of IAG Cargo becoming CFO of BA, IB CFO becoming CEO of Vuelling (may have the last one wrong).
I'm sure DUB will become an important hub. It can cover UK regions to USA cheaper than via LHR. Also it is a strategic hedge against UK runway decision or lack of it. Remember WW is a very smart guy regardless of whether people like him or not.
It is worth remembering there are benefits to this. Take A350s for example. If for example growth didn't materialise quick enough, IAG could juggle delivery slots between the carriers in the group to better use them. I.E. create opportunities for internal deferral of deliveries etc. It works both ways can save empty seats and carrying the cost of premature deliveries for a carrier. Perhaps it could mean season movement of aircraft - EI on North Atlantic in the summer and IB on South Atlantic in the winter. Who knows.
You are right to see that this creates competition between carriers on costs and revenue. The group are also using it as a way to move management between carriers. e.g. CEO of Vuelling moving to BA, CEO of IAG Cargo becoming CFO of BA, IB CFO becoming CEO of Vuelling (may have the last one wrong).
I'm sure DUB will become an important hub. It can cover UK regions to USA cheaper than via LHR. Also it is a strategic hedge against UK runway decision or lack of it. Remember WW is a very smart guy regardless of whether people like him or not.
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- IAG is on record as having stated that it wants to build hub at DUB. How does this manifest itself? What exactly is it going to do to ensure this happens (or is it all down to EI)?
- If there is a competition for new acft between BA, IB and EI for new long haul aircraft, in what circumstances could EI possibly win this, given that LHR and MAD are bigger hubs.
- If EI's business plans are found lacking, then why is senior management still in place? If they produce growth plans which result in aircraft intended for them being reassigned to other operators, either (a) the other markets are much bigger and EI/DUB will always be the cinderella, or (b) EI's growth plans are not sufficiently ambitious. Which is it, and what will be done to address it?
- If there is a competition for new acft between BA, IB and EI for new long haul aircraft, in what circumstances could EI possibly win this, given that LHR and MAD are bigger hubs.
- If EI's business plans are found lacking, then why is senior management still in place? If they produce growth plans which result in aircraft intended for them being reassigned to other operators, either (a) the other markets are much bigger and EI/DUB will always be the cinderella, or (b) EI's growth plans are not sufficiently ambitious. Which is it, and what will be done to address it?
IAG wanted to buy EI partly because of its strong brand recognition in the US and also because BA was losing transatlantic traffic from its frequent flyers in the regions to EI and DUB.
Joining Oneworld and the AA/BA/IB/AY transatlantic business, codesharing, leveraging BA's network and distribution in the UK, and adopting the Avios frequent flyer currency all will give EI a big fillip on the revenue side.
On top of that you have cost synergies and the application of IAG "know how" to areas like revenue management (which IAG completely overhauled at IB).
Remember, when comparing EI to both BA and IB, they have had the benefit of five years to gain revenue and cost synergies following the formation of IAG and IAG is still at an early stage in consolidating some back office functions like IT.
And for the record IAG's planned capacity growth in 2016 is 2.9% for BA, 6.2% for IB, 14.5% for VY and 9.4% for EI. So EI will have the 2nd highest growth rate for IAG in 2016.
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A319 Operations...
So last Sunday, 6th March EI-EPU left Gatwick for Ostrava for maintenance, ending service of the type with Aer Lingus. Gatwick Belfast City has been 320 since then and will be on the route until the end of the Winter season at the end of the month.
EIDEK and EICVB currently operating at BHD, though this may change as CVB took over from CVA on the LHR route last week...
EI-BUD
EIDEK and EICVB currently operating at BHD, though this may change as CVB took over from CVA on the LHR route last week...
EI-BUD
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EMB-190 Wet Lease
CH-Aviation reporting that EI will be wet leasing an EMB-190 this summer.
Does anyone have additional info on this? I'm not a subscriber to CH-Aviation so can't read the full article.
http://www.ch-aviation.com/portal/news/44679-aer-lingus-to-wet-lease-a-british-emb-190-this-summer
Does anyone have additional info on this? I'm not a subscriber to CH-Aviation so can't read the full article.
http://www.ch-aviation.com/portal/news/44679-aer-lingus-to-wet-lease-a-british-emb-190-this-summer
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If that's the case what routes will it operate? Will it be under the main line operation or the regional brand? It's an aircraft that could prove to be just right on a good few of their UK regional routes.
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E-190 Schedule
05.45-09.15-09.55-11.25 - PGF - SAT
12.10-15.45-16.25-18.00 - NCE - SAT
18.40-21.50-22.30-23.35 - BIO - SAT - eff 18 June
05.55-09.10-09.45-10.55 - SCQ - SUN
Would appear the Saturday LCY schedule will be reversed an operated by LCY and they no longer have the afternoon charter ex DUB
The lease runs 28 May to 4 September
12.10-15.45-16.25-18.00 - NCE - SAT
18.40-21.50-22.30-23.35 - BIO - SAT - eff 18 June
05.55-09.10-09.45-10.55 - SCQ - SUN
Would appear the Saturday LCY schedule will be reversed an operated by LCY and they no longer have the afternoon charter ex DUB
The lease runs 28 May to 4 September
Last edited by Jamie2k9; 15th Mar 2016 at 18:31.