Aer Lingus - Privatisation countdown begins ...

[akerosid]

Today's Sunday Tribune covers the whole issue of EI's privatisation, with an expectation that the Minister will bring the issue to cabinet in 3 weeks (from last year's experience, don't be too hopeful on the timescale!), with a decision to be expected, well, hopefully before the 787/350 enter service.

This has the potential of being something of a titanic struggle, with the unions still putting up strong opposition, although I think that with the reality of FR expanding aggressively at DUB, neither they nor the Dear Leader will want to hamstring EI in the face of competition from MO'L (there is an element of wishful thinking there, perhaps!)

Some interesting little points ... EI's t/a fleet will be getting an interior/IFE makeover ... possibility of CO expanding services (although they're already doing so this year) and UA entering the market once the stopover BS is done away with. There is still, however, an assumption, that funds from the privatisation proceeds will go towards the fleet replacement, whereas in reality, these will come from raising the necessary funds on the open market.

Finally, things are moving in a positive direction, but let's hope the cabinet doesn't give FR the competitive advantage which would arise as a result of EI being held back; it must surely be clear to the unions that had FR done what it's doing this year - expanding DUB aggressively - back in 2001/2, EI probably wouldn't be around. There are still many challenges ahead, particularly on long haul, but hopefully reality is starting to dawn on Kildare Street (and just as importantly, Merrion Square).

[akerosid]

Potentially a big spanner in the works here, if what is reported in this week's Flight is correct. Of course, bear in mind that a lot of these articles tend to be "driven" by interested parties, although that's mostly in the papers; when FI says it, it has to be taken pretty seriously.

http://www.flightglobal.com/Articles/2006/02/20/Navigation/177/204766/Congress+closes+ranks+on+EUUS+Open+Skies+plan.html

A lot of EI's plans are dependant on Open Skies; if this falls through, privatisation and expansion could be affected and worse still, with FR's expansion into DUB, the airline really needs to develop as aggressively on long haul as it has done on short haul. That really means the US.

We need a Plan B here and with the greatest respect to the govt, it's hard to have much confidence in them on this issue. Three questions need to be answered:
1) What exactly is the govt's approach; is it going to simply say "oh dear, fiddlesticks, well we'll just have to call the whole Open Skies thing off, or
2) With an EU vote having taken place (this is due next month, but is expected to support Open Skies), can't the govt simply press ahead; as our proposed Irish/US bilateral won't pose a competitive disadvantage to any other country, it should "creep under the EU's radar".
3) If the govt does this, can the EU Commission stop them; there has been talk of an "all or nothing" approach, but to hold us back means effectively maintaining a competitive disadvantage and I'm not convinced that it would be legal for the EU to do this.

Of course, the biggest concern is that realpolitik (in which aviation usually loses) might welcome this: no Open Skies means no privatisation and no privatisation is precisely what the unions and Taoiseach want. For this to fall through might be exactly what they want.

Time to start lobbying the Americans directly?