Aer Lingus - 2
 

previous thread is here:
http://www.pprune.org/forums/showthread.php?t=221329

Whats up at Aer Lingus?
 

Whats happening at Aer Lingus? No cheap fares anymore. Is this because Willie Walsh left or they are trying to look better on paper for the float?

Took 5 trips to France this month. Normally 5 would have been with Aer Lingus but this time I only choose to fly with them twice and Ryanair got my custom on the other three trips.

Flew to Paris last Friday and the aircraft wasn't even half full.

Flew to Marseilles last Thursday and there were only 67 on board.

Simple math if I wanted to take the family with Aer Lingus to the S of France this summer they wanted over EUR2,000. So I flew with Ryanair to Marseilles for EUR350 on a full aircraft so what are Aer Lingus up to? Is it they have bigger aircraft that they find harder to fill or do they prefer running half full aircraft with people who never heard of alternative operators yet? My first choice was always Aer Lingus money talks!

....lesson one in the economics of operating in the Irish market! Next up for the yield manager's position.

I've just noticed that EI have upped their fuel surcharge to €80 :eek::\:uhoh::confused:

Aer Lingus
 

"I think Eli's fares are very good especially if you book early and are flexible"

I think that's all changed. Yes in the past if you booked early you got the best price but now when it looks as if demand is low they reduce their prices. In May I was caught out going to Lyon. I booked the family trip early but a week or two before departure I could have got the same flights for €350 less and even at that there were still plenty of seats unsold. So really the fare I was sold for purchasing during one of their so called 'Sales' cost me because I was effectively subsidising the seats that were left unsold. This July I left it to the last minute to book and found Are Lings cheaper in only two of my five round trips. My custom for the other three went to Ryan and I have to say Ryan flights were punctual.

If you are flexible - say you can go on their am flight on a particular Tuesday in Nov to get their headline sale price fine but in reality Aer Lingus is sometimes a low-cost carrier and sometimes just the same as they always were.

They worked hard to build an image of offering cheap fares which they appear to be having great difficulty maintaining.

I think this happens with every airline. I have booked last minute flights with EI and got great fares, when FR has been hundres of euros. On other occasions, EI is 10 times FR's fares! I think EI's low fares can be harder to find than before, but they still offer good value on a lot of flights, and provide good service! I mean, you cant beat a E300 return to Boston!

Baggage Charge
 

Aer Lingus follows Ryanair on baggage charge

http://www.rte.ie/business/2006/0801/aerlingus.html

According to the Irish Times, Aer Lingus are going to bring in charges for checked in baggage on short-haul flights.

http://www.ireland.com/newspaper/bre...breaking45.htm

It'll be interesting to see how this affects the flights where they code share with BA, KLM etc.

EI copy FR
 

air lingus to charge for checked in baggage on european flights
this sound to me like they are trying to copy ryanair

daz211

Although Ryanair weren't the originals on this move either. I believe Flybe were first.

Flybe wasnt the first to introduce charging passengers for checked luggage. PeoplExpress introduced this in the 1980's

MO'L targeting EI
 

Interesting article in today's Sunday Business Post, an interview with MO'L:

http://www.thepost.ie/post/pages/p/s...325-qqqx=1.asp

Doesn't make particularly good reading from an EI perspective; he's obviously focusing on EI's privatisation next month (as was probably clear from the press release accompanying last week's new route announcement) and trying to scare away potential investors. The question is, how can EI compete with this onslaught? I sincerely hope they can; the prospect of FR being the only major Irish airline is not one I want to entertain.

Is there any way EI can develop short haul routes and protect the markets it's already on, to an extent that FR would be dissuaded from competing head on with them; after all, there are many other untapped markets, as well as opportunities to compete with other, less healthy flag carriers, such as AZ, OA, SK, etc.

One thing is clear: the FR onslaught at DUB makes it all the more important that EI can build its long haul network from DUB as soon as possible. Oct 12th is the big day as far as that's concerned, although there needs to be a "Plan B", in case Open Skies doesn't proceed as planned.

I booked for Birmingham a while ago for December this year, €1 each way, cant go wrong there :ok:

Finally someones talking sence!!! Aer Lingus always have and always will be better than Ryanair what you pay on Ryanair is what you get 1cent no pitch on seats no pocket in front, Ryanair try and make it as uncomfertable as f*cking possible, it's grotty, crews not trained and unhelpful don't do their jobs properly I could be here until tomorrow. Aer Lingus I thin kis one of the most friendly Courteous and at least they clean up their planes on landing last time I travelled with Ryanair I found bread crumbs on my table an a used babies nappy in the pocket in front when I asked for it to be dissposed they said "What you pay is whayt you get" I wrote to Ryanair and told them about this and yet the same reply "what you pay is what you get" I hope Ryanair pull out of Cork and make way for EI and REA cause nobody likes them. Now they're trying to know EI out of Spain which is totally stupid cause people wan't to get proper food and not bloody buns that taste like card-board!!!

You say there are no pockets in front, then a few lines further on you say that you found a used baby nappy in "the pocket in front".

Shanwickman


Until very recently Ryanair had a mix of planes with and without seat pockets. Not sure if they are all refitted now but there you go!

Shanwickman, I traveled with Ryanair in 2003 since then they have started eliminating pockets on new a/c with will eventually bring them to have no pockets.

Open Skies setback for EI
 

The US DOT has said it won't be in a position to provide details of its proposed new rules on foreign o/ship and mgmt of US carriers by the EU Transport Council meeting on the 12th October. This is extremely bad news for Aer Lingus, with privatisation coming up next month and comes on top of the increased threat from FR.

http://www.unison.ie/irish_independe...issue_id=14507

What are the options here? The EU says it is still hopeful that a deal can be done by year-end, but even that's not terribly helpful; even if the US does come up with new rules, there's no guarantee that these will be acceptable and while negotiations are ongoing, it's highly unlikely that the EU will allow the govt to negotiate a special deal or dispensation with the US or even to proceed with the deal announced last November. That said, Cullen will be under severe pressure to provide some comfort to potential investors next month. With short haul coming under severe pressure, long haul is the airline's big hope and if growth is stunted there, it makes life difficult on two levels; firstly, the mere fact of not being able to grow, but secondly, the fact that because they don't know WHEN they're going to get rights, they can't plan fleet expansion.

The EU holds all the cards, so if they say "no" to the govt, as they're likely to, there's little hope of their minds being changed. However, the one remote possibility is that since the EU position has the effect of imposing a competitive disadvantage on Aer Lingus and since the proposed Irish/US mini deal doesn't pose a competitive disadvantage to any other country, the govt could threaten to insist on a provision in any reworked EU Constitution to prevent the EU from acting in this way; it's a very long shot (and pretty unlikely), but there's very few cards for the govt to play.

This latest setback once again plays into Shannon's hands.

It may give a short term advantage, but the expectation is that the US will have its proposals by year end; however, just an expectation and there have been so many setbacks and pitfalls over the years, that it's not reasonable to be confident about this. Even if they do present new proposals, will they be acceptable? Meanwhile, even though EI doesn't have any interest in buying in a US carrier, it - and most other EU carriers - lose out, and this at a time when US carriers are throwing capacity onto the Irish market with jets diverted from the domestic market.

In correspondence with the EU, I was advised that if negotiations between the EU and the US hit problems, the EU could give the Irish (or anyone else) permission to renegotiate with the US, subject to the following:

- The agreement would be subject to EU approval and would have to contain certain clauses (since the mini deal was made under EU supervision, we can assume that these clauses were in there?), and
- The EU had to be satisfied that granting the right to negotiate would not compromise or undermine ongoing EU/US negotiations. Given that the sticking point is not something which concerns Aer Lingus, they can hardly claim this is the case. Furthermore, since our US bilateral is easily the most backward, counter-productive and anti-competitive of any of the 25 EU states, amending it to allow our "mini deal" to go ahead could hardly be regarded as a threat to any other member state.

Furthermore, since the EU has said its confident that a deal can be done by year end and since, at this stage, Aer Lingus can't do anything more for the Winter, what difference would it make for the EU to allow the minister to give assurances in relation to increased US access in time for privatisation? That's really all EI and potential investors need right now. (And if Open Skies doesn't go ahead as planned, the mini deal still can, because it won't make any difference to the sticking point.)

The govt really needs to take a hard line on this. If the privatisation is a flop and if EI doesn't get the funds to increase its fleet and add new US routes, the airline will be in serious trouble and MO'L will make it hurt ...

EI should put US expansion on the back burner and go east and south.

Open Skies
 

Can't see the US making any concessions before November's election. EI need to let the Government know that the situation is very serious.

This isn't a time for political games.

It's potentially as serious as the Autumn of 2001 for Aerlingus. We must allow the transitional agreement to come into effect.

Maybe with all this stalling on the open skies, we might see HongKong, CapeTown, Bangkok or just an increase in flights to Dubai and the US!

We don't actually need any concessions from the Americans; it's the EU which is providing the obstacle. The Americans have been pushing our lot for years to move towards Open Skies and it was only grudgingly that they agreed to a phased period for letting the stopover die. The Americans would be only too happy to agree that the Irish-US deal comes into effect, regardless of the O/S problems; that's the stage we're at now. Since no Irish airline has any interest in controlling a US carrier, there'll be no objections at Congress level.

As for other long haul routes, yes, of course, they should do that, BUT there are a number of issues here:
- It's well known in the US market and that's its traditional long haul stamping ground, so it's relatively easy to establish itself in new markets.
- Similarly, it's less well known in Asia and without wishing to kick EI, its long haul product isn't quite Cathay. To establish themselves there, they'll need significant investment in the service product; do they want to do that?
- Is the A332 the optimal aircraft for these routes, particularly on the homebound legs? The A332 should be ok for BKK, possibly HKG, but KUL and SIN are out.

So, with that in mind, I think the focus will be on N/A routes; the minister has a month to get the green light from the EU to allow the Irish/US mini-deal to go ahead as it is; nothing will happen this winter; all that is wanted is an assurance for potential investors.

Open skies
 

Minister has been remarkably silent on the matter. Is the Shannon lobby
trying to stall the agreement for as long as possible?

There's not much he can usefully say, publicly, on this matter. His efforts and those of his department should be focused on getting the green light for EI on t/a access. I think that the Shannonsiders have accepted that the end for the stopover is nigh.

Quite a few interesting articles in today's papers - the Sunday Times has a large article on EI and the SBP as well; the Sunday Indo has a story on fears about the privatisation being a flop. That can't be allowed to happen; for EI's floatation to be a disaster would put its future seriously at risk, especially as far as long haul expansion is concerned and one thing that Cullen knows he can do about this is to be able to say, in advance of the privatisation (which will be in the last week of September), is that EI can expand its US routes on the basis of last year's mini-deal.

Incidentally, one of the papers (I think it was the ST) gave a list of the airline's priority list for US growth: SFO, Philadelphia, Florida, Mid-Atlantic (BWI?) and Texas. One question that occurs to me is this: Could EI return to BWI and MCO, on the basis that it did previously, i.e. without these cities counting as one (or two) of three cities is can add under the "mini deal"?

Or they could return to them under the illusion of a "charter operation" as was done with MCO before.

I think they could do that; WW once said that BWI would work without the stopover; MCO would obviously work for the Summer and they'd only have the stop in one direction, but also no cargo.

Still, there's a hell of a difference between settling for 1:1 and going for what the mini-deal should allow, 3:1. Cullen needs to push hard for this; after all EI has been through over the past few years, the EU should not be allowed to mess things up, particularly over something as irrelevant to EI as foreign o'ship of US carriers. They need to play hard ball too; Bertie has considerable clout at EU level, having concluded the Constitution deal during our last presidency, so he has a role to play. It's not just EI's interests; it's ours as a whole which will be undermined, so if the EU wants its next Constitution to get anywhere (bearing in mind it needs a referendum in Ireland), "don't mess EI about" should be the message coming from Merrion St.

3:1
 

The Americans will have no problem with the 3:1 . Cullen will be pushing an open door if he really wants to get this implemented. But does he?

Perhaps the question is, does Ahern? I think he and Cullen both do. Cullen's silence through all of this is interesting; he has neither committed himself to a particular result, but nor has he rejected it as impossible. I suspect that the Dept of Transport has its own Plan B in place for some time, i.e. if there is a delay here, this is what we'll do and this is what EI will do.

They know that they'll have little problem with the Americans, but it's the Eurocrats who are the big obstacle. Now, there is, understandably a suspicion, given the past few years' experience, that they may not be trying quite so hard, but I suspect that there is general expectation in the west that the Shannon stopover is gone and they're working to that assumption. However, I also suspect - and I may be extremely naive in this - that there is a realisation at govt level that if EI can't develop its long haul routes, they're at FR's mercy; it's not just a question of not wanting O'Leary to kill EI (though that in itself would be reason enough), but also the fact that EI's growth and development of long haul is crucial to economic growth in future; foreign airlines may come and go, but EI needs to be there, growing and developing its network. For that, a successful privatisation - and fleet renewal - is essential.

Am I right? We'll find out in the week or so leading to privatisation ...

IPO next week
 

Next week is IPO time for Aer Lingus, leading to privatisation on or about the 25th September.

It's also expected that the govt will issue a statement about Open Skies sometime during the next week or two, which will hopefully provide some confidence for the whole process. Dermot Mannion will be starting the roadshow on or about the 4th September.

Interesting points in this article from the Guardian:

http://money.guardian.co.uk/business...856906,00.html

Most we're aware of already - long haul fleet, developing hub at DUB etc, although I wonder if the recent problems at LHR (which aren't going to end anytime soon) will make Dublin a more pleasant alternative? Certainly, the DAA will need to be made do its part (and with the EUR265m it picked up from the Great Southern Hotels sale, it can hardly plead poverty), particularly as regards connection facilities.

Fingers crossed ...

Official - Govt. to sell stake in Aer Lingus
 

Govt, Aer Lingus detail privatisation plans

http://www.rte.ie/news/2006/0828/aerlingus.html

Aer Lingus price range by second week in Sept

http://www.rte.ie/business/2006/0828/aerlingus.html

Transatlantic the key?
 

The govt and EI have said that one of the key results of the privatisation will be investment in long haul fleet expansion, but so far, the "vibes" have been pretty poor, as far as reports coming out are concerned. I think the govt - and potential investors - realise now that if the privatisation process is to be a success, the govt needs to get clearance from the EU to proceed with the Irish/US mini-deal. Who knows how long the other issue will take? It could be all over by Christmas and indeed, the EU has indicated that it is optimistic that this will be the case, but then it could go on for another year.

The core issue is that since the sticking point - US airline ownership and access to LHR - has nothing to do with EI, what harm for the EU Commission if it gives the green light? The fact is that of all EU countries, our bilateral with the US is the most restrictive; virtually every other country has Open Skies or close to it - the UK (and I think, Greece, but that's their problem) being the exceptions, which means that the delays don't cost them as much as they cost EI. The govt needs to play hardball on this, if it's interested in the privatisation being a succes; otherwise, investment brokers may recommend holding off until the O/S issue is sorted out.

As far as eastbound growth is concerned, Shanghai was mentioned as a possibility, which is "out of the blue", given that HKG, BKK, SIN and KUL were said to be the front runners. Interesting option - particularly for freight, but again, is the 332 the ideal freight carrier and again, if they go for anything bigger, can DUB handle it - runway restrictions? And furthermore, if they do go east, they'll need to rethink their service product pretty dramatically ...

Well said, you should offer your consultancy services to Aer Lingus / the government. It'd probably work out a whole lot cheaper than the current consultants they're paying, and save AerLingus a small fortune :}

A bit unrelated, but I was on the Aerlingus site there one night a few months ago and the booking engine was showing flights to Bangkok, Hong Kong and Cairo :confused: Didn't notice any out of place US services.

Aer Lingus definitely need to focus on the US market, but Hong Kong would be a winner if marketed adequately. (That's the problem half the time isn't it!)

Aer Lingus should never forget or neglect its European routes either, that would simply be disastrous :ouch: Cork (of course) has potential routes screaming out left right and centre: Frankfurt, Dusseldorf, Milan, Glasgow, Venice, Palma, New York, and Brussels (of course).

I also heard Tokyo as a possible too.


The air cargo business is booming at the minute, especially in the far east. A tidy profit could easily be turned on an A330F based frieghter operation.

Ryan2000
 

EI has a great chance to expand out of Cork. In fairness they have already 4 aircraft based there but Ryanair's stubborn refusal to open new routes there leaves the field open to them.

I understand that the old terminal is already beginning to take on a semi derilict look witlh furniture removed and many fittings pulled from the walls.

Aer Lingus need to sort out a pilot base there before any more expansion....otherwise with so many crews overnighting there, they'll need to buy a motel for them.

There is still plenty of scope for short-haul expansion.

From Dublin an expansion of Scandinavian services - Oslo, Copenhagen, Stockholm, Helsinki. When they are added to the EU, services to Romania and Bulgaria. There's even potential in services to places like Istanbul or Moscow. And potentially more holiday routes - Palermo, Somewhere in Greece.

From Cork more UK routes - Glasgow, Manchester. More sun routes - Palma, Almeria, Valencia. Baltic Destinations - Riga. Frequency increases on existing routes. I'm not sure I agree on all your routes. I feel the A320 is too large an aircraft for Cork-Germany. Also, Dusseldorf (Amsterdam) and Brussels (Amsterdam & Paris) could have a negative impact on existing yields.

The most interesting question for short-haul though is how they handle a situation where they try to turn Dublin into a transatlantic hub. They'll need to up the frequency to double-daily on a number of routes (particularly UK) and need to consider night-stopping as well. This could require a rethink of existing routes in terms of how it could fit into an overall strategy, rather than how many passengers can be shifted point-to-point.

Interesting times ahead.

I agree that there's still considerable opportunity on s/h; Mannion has already mentioned Russia and Greece. However, I have to say I'm very uneasy about the idea of developing another hub in Europe; to me, it's inviting disaster. EI needs to consolidate its position at its home base; establishing a new base in Europe only invites other carriers - particularly low cost carriers - to go in and compete against it; it has to get itself established and it has to face all the costs associated with a new base - crews, support staff etc ... all money far better (and more urgently?) spent at home.

There are so many stories in business - not just aviation - of companies which made a mess of things because they lost focus. In the old days, as a state owned company, EI could rely upon the state to pull it out of trouble; in the new, privatised environment, there's no safety net. Aer Lingus's focus needs to be on developing short haul and particularly, long haul. It needs to develop an effective hub at DUB (although opinion is divided on whether the day of hubs as passed). I'd much rather see EI investing the money it might spend on building a Eurohub on boosting its long haul network, its service product and other "home" areas, rather than opening up a whole new area for other carriers to attack it on. It doesn't need to do this. Why be diverted from where the important battle really is?