"Sky high" fleet costs grounds Aer Lingus plans?

[akerosid]

According to today's Sunday Times, rising fleet costs have left Aer Lingus's fleet replacement plans "in tatters". The ST also reports that WW was close to a fleet deal when he quit last year.

It certainly is the case that suitable widebody aircraft are difficult to come by ... 777s, A330s, etc and the new generation of widebodies, the A350 and 787, is being sold out. The big problem is that Aer Lingus still doesn't know when it can add new routes; the whole EU/US thing isn't really moving anywhere, Canada is a no go (because of the stopover) and the runway length at DUB is going to obstruct plans to expand into Asia (not to mention a less than stellar service product, which hasn't seen investment in some time). With regard to the most immediate issue - the EU/US bilateral, the lack of any progress means that Aer Lingus cannot know when it's going to get access to new routes ... this September, next year, 2007? That makes fleet planning - and consequently, financing - extremely difficult. That said, given the potential EI has for growth, it's difficult to believe that the airline won't be targeted by Airbus and Boeing for a new fleet. Most of the talk I've heard so far has centred on Boeings as EI's first choice.

DM has quite a challenge on his plate when he joins up. Unfortunately, Aer Lingus has been sliding for quite a while and it seems to be an airline in serious need of a morale boost.

[PaperTiger]

, Canada is a no go (because of the stopover)Huh ? What's that mean ?

[akerosid]

What I meant is that EI won't fly to Canada as long as the current, unrealistic bilateral is in place. As soon as Ireland (as in the govt) signals a wish for a rational and realistic approach to links with Canada, they can re-do it. Until then, AC will just operate the bare minimum service, via SNN.

[irishcc]

Could they not acquire aircraft, and use them for charter work - such as the Slatterys Capetown service, currently using the LTU A330 - or the usual Summer IT flights - again some airlines using large aircraft.
Aer Lingus could then drop these routes in favour of the scheduled service, when the bi laterel issues are sorted, and they will have aircraft and crew ready.

[akerosid]

It's certainly a possibility and it may even come down to that; i.e. do you wait until the new routes have started before you start looking? If you do, you may open the new opportunities to other carriers? Conversely, if you do acquire them before you need them, it may be hard to find those charter routes, or at least routes which can pay their way.

It must be an intensely frustrating situation for them. If Aer Lingus can get its act together as regards costs and get a fleet in place to take advantage of the new growth opportunities, it stands to be one of the most successful and fastest growing t/a operations. Unfortunately, if it's stopped at every corner; if it pulls out of routes instead of growing and if it can't plan for fleet growth because of uncertainty over when it will get rights, it could be a big loser.

Worse still, one of the biggest obstacles appears - even now - to be its shareholder. I hope DM knows what he's letting himself in for.

[Bearcat]

aer lingus has being sliding for a while is a huge understatement....sad is'nt it?

[MarkD]

irishcc

I had the same thought - acquire some newer (heavier MTOW and decent IFE) 333s and/or 332s to replace the leased airframes pending 359s and send the owned 333-301s /-201s off bucket and spading...

Now that the 359 has repositioned crew rest so it releases seat rows surely EI have no excuses for not providing it and thus reaching agreement on CPT etc...?

yeah right!

[akerosid]

I suspect that the leaning of Aer Lingus is towards Boeing for long haul; it could, of course, be a tactical thing. Obviously, they don't want Airbus to think they have EI in the bag. However, if EI's growth goes to plan, the potential size of the fleet could be double what it is now. Both manufacturers will be anxious to be a partner in that growth and given Boeing's recent success (despite the temporary AC problem), they will be anxious to get an A330 customer on board.

I think it may well come down to who will be the most flexible in being willing to provide aircraft when EI needs them. Again, EI may be able to use the size of the potential deal to help wrestle a more flexible deal. There is supposed to be an EU/US round of talks in the near future and even if it doesn't result in a deal, it may clarify matters, at least to an extent which would allow firm plans to be made. Being able to make firm plans for (say) April 2006 is better than a possibility of something happening in September or October.