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Click below for data links:
ARL-2004 TRAFFIC STATS
ARL-2004-02 ATW PHOENIX AWARD
ARL-2008-03 JBL PARTNER
ARL-2013-04 - UPDATE-A
ARL-2013-04 - UPDATE-B
ARL-2015-04 - E MIDLANDS TO DUBLIN.jpg
ARL-2016-05 - All Female Flight Crew.jpg
ARL-2018-09 New Livery in 2019.jpg
ARL-DUBLIN HQ - 2012-10
ARL-FLIGHT CREW AD - 2010-11
ARL-VISIT IRELAND - 2012-03
ARL-VISIT IRELAND 2004
ARL-VISIT IRELAND TOUR
ARL-VISIT IRELAND-DUBLIN CASTLE
ARL-VISIT IRELAND-GALWAYS CLIFDEN CASTLE
ARL-VISIT IRELAND-LIMERICKS GLIN CASTLE
ARL-VISIT ROSA MOSS BRIDGES IRELAND
ARL-VISIT TEMPLE BAR DUBLIN.jpg
FOUNDED AND STARTED OPERATIONS IN 1936. THE NAME "AER LINGUS" IS AN ANGLICIZATION OF THE "IRISH AER LOINGEAS," MEANING "AIR FLEET." DOMESTIC, REGIONAL AND INTERNATIONAL, SCHEDULED AND CHARTER, PASSENGER & CARGO, JET AIRPLANE SERVICES.
PO BOX 180
HEAD OFFICE BUILDING
DUBLIN AIRPORT, (CO DUBLIN), IRELAND
HEAD OFFICE BLOCK
DUBLIN AIRPORT, DUBLIN, IRELAND
EIRE/IRELAND WAS ESTABLISHED IN 1919, IT COVERS AN AREA OF 70,284 SQ KM, ITS POPULATION IS 3.6 MILLION, ITS CAPITAL CITY IS DUBLIN, AND ITS OFFICIAL LANGUAGES ARE ENGLISH AND GAELIC.
Cultural affinity, stability and beautiful vistas are among the many attractions of Ireland for USA retirees. Thanks to an economic bust, housing and other living costs have come down too. Flights back to the USA are plentiful and relatively cheap.
Aer Lingus (ARL) was founded by the Irish Government in April 1936 to provide air services to/from Ireland. The first flight, from Dublin to Bristol, took place on May 27th 1936. On October 2nd 2006, (ARL) entered a new phase in its history with the airline's flotation on the Irish and London Stock Exchanges, becoming a publicly quoted company and realizing €400 million in equity for the airline's future growth.
APRIL 1993: FISCAL YEAR (FY) 1993 = -$273 MILLION (MOST TRAUMATIC LOSS, IN 57 YEAR HISTORY!).
2 737-548'S (PT169; PT170) DELIVERIES.
FEBRUARY 1994: 1 737-500 (CFM56-3C1), EX-RIO-SUL (ROS).
MAY 1994: A330 DELIVERY - DUBLIN, SHANNON TO NY & BOSTON.
JUNE 1994: TO LAY OFF -850, TEAM AER LINGUS (TEL) EMPLOYEES OF 2000.
4,813 EMPLOYEES (INCLUDING 358 FLIGHT CREW (FC), 684 CABIN ATTENDANTS (CA), & 101 MAINTENANCE TECHNICIANS (MT).
JANUARY 1995: 1994 = -$194 MILLION (NET PROFIT): +0.8% PASSENGERS (PAX).
OCTOBER 1995: CODE SHARE WITH (KLM) ROYAL DUTCH AIRLINES, AMSTERDAM TO DUBLIN AND CORK.
WITHDREW ITS LAST 747 FROM SERVICE, REPLACED BY A330'S. ALL 3 NOW IN STORAGE.
JANUARY 1996: 1995 = +15.1 MILLION POUNDS (-123.6 MILLION). AER LINGUS (ARL) GROUP = +$24 MILLION.
APRIL 1996: 1 737-400 (CFM56-3B2).
MAY 1996: 1 L-1011-100 (1093), CALEDONIAN AIRWAYS (CAW) WET-LEASED UNTIL SEPTEMBER 1996. 767 (EI-CAL), WHICH WAS SUBLEASED TO (TWA), (GUI) 5 YEAR LEASED, WAS RETURNED TO BOULLIOUN (BOU), USA (THE OWNER).
AUGUST 1996: JOHN ALLEN, GENERAL MANAGER COMPONENT OVERHAUL (TEL), EX-TECHNICAL DIRECTOR, BRITISH MIDLAND (BMA), AND BERNARD HENSEY, GENERAL MANAGER SPECIAL PROJECTS.
LEGAL PROCEEDINGS WITH (BOM), TO RETURN 2 737-200'S (PK641 & 742).
SEPTEMBER 1996: (http://www.aerlingus.ie).
5TH ORDER A330-300 (CF6-80E1A1) (MAY 1997). LAST 747-100 (19748), TO BE SCRAPPED IN ARIZONA DESERT.
OCTOBER 1996: AER LINGUS (ARL) SUBSIDIARY, AIRMOTIVE IRELAND, POSSIBLE STRATEGIC ALLIANCE WITH LUFTHANSA TECHNIK (LTK) (DLH).
TONY DOYLE, GENERAL MANAGER OPERATIONS RESIGNED. JOHN MOONEY, GENERAL MANAGER BASE & LINE MAINTENANCE OPERATIONS.
2 737-200'S (PK641 & PK742) RETURNED FROM (BOM). 1 767-300ER (PW4060), EX-(TWA).
DECEMBER 1996: CODE SHARE WITH FINNAIR (FIN) TO STOCKHOLM AND TO HELSINKI (DC-9, 122 PAX, 2 CLASS).
JANUARY 1997: LUFTHANSA TECHNIK (LTK) (DLH), ACQUIRES AIRMOTIVE IRELAND - POSSIBLE TECHNICAL COOPERATION WITH (DLH). AER LINGUS (ARL) WILL IMPLEMENT PROCESS.
ALONG WITH (RYR), (BAB), (SAS), & (SAB), (ARL) IS TAKING PART IN "ADAMS PROJECT" FOR HUMAN FACTORS IN SAFETY IN AIRCRAFT MAINTENANCE, LED BY TRINITY COLLEGE.
2 737-200'S (JT8D-9A), EX-EAST WEST AIRLINES (BOM).
MARCH 1997: 1 737-500 (CFM56-3-B1), EX-NORDESTE (NOD).
APRIL 1997: 1996 FISCAL YEAR (FY) = +$65.8 MILLION (+$23.7 MILLION).
5,620 EMPLOYEES (INCLUDING 1,284 FLIGHT CREW (FC) & 134 MAINTENANCE TECHNICIANS (MT)).
5TH A330-300 (059), EX-(ANT). (CAW) WET-LEASED L-1011-100 (1093), UNTIL OCTOBER 1997. 737-548 (25165) RETURNED FROM (ROS).
MAY 1997: 1 737-500 (CFM56-3-B1), EX-RYAN INTERNATIONAL (RYN). 1 L-1011-100 (RB211-22B), EX-CALEDONIAN AIRWAYS (CAW). 1 L-1011-385-1, WET-LEASED FROM KITTY HAWK INTERNATIONAL (CKF), TIL OCTOBER 1997, NAMED "CILIAN/ST.KILIAN."
JUNE 1997: 1 A330-300 (CF6-80E1A2).
JULY 1997: LOOKING TO ORDER A321'S SOON.
TEAM AER LINGUS (TEL) STARTED A PROGRAM CALLED "AWARE," MODELED AFTER BOEING (TBC)'S MAINTENANCE ERROR DECISION AID (MEDA), TO HIGHLIGHT PROBLEMS OF MAINTENANCE ERROR, AND IMPACT OF HUMAN FACTORS IN THESE ERRORS. EXPECT >1,000 PERSONNEL TO PARTICIPATE IN "AWARE."
AUGUST 1997: SELECTS AIRBUS (EDS) FOR SHORT-HAUL FLEET ADDITIONS. 4 ORDERS (1998) A321-200 (CFM56-5B3), 194Y OR 168 2 CLASS, 2 (ILF) LEASED, FOLLOWING 2 FROM (EDS). WILL REPLACE 737-400'S ON BUSY LONDON ROUTE.
SEPTEMBER 1997: AIRBUS (EDS) HAS 3 REPRESENTATIVES FOR AER LINGUS (ARL), 2 IN DUBLIN, AND 1 AT SHANNON.
OCTOBER 1997: 6,855 EMPLOYEES.
737-4S3 (25116), FUTURA INTERNATIONAL (FUA) LEASED.
NOVEMBER 1997: TEAM AER LINGUS (TEL) HAS MAINTENANCE CONTRACTS FOR (TAK) 727, AER LINGUS (ARL) (2) A330 & (2) 737-400, KENYA AIRWAYS (KEN) 737-200, PEGASUS (PGS) 737-400, (YEN) 727, FALCON (FLK) 737-300, SPANAIR (SPP) 767-300, AIR FRANCE (AFA) 747-200, MARTINAIR (MTH) 767-300, AND SCANDINAVIAN AIRLINES (SAS) 767.
SOLD FINAL 2 737-200'S (PK641; PK642). 737-500 (PT169) TO BE RETURNED TO (ILF) IN MARCH 1998. 737-400 (PT167), LEASED TO RYANAIR (RYR) TIL MAY 1998, + 2 737'S (PW035; PW118), EX-FUTURA INTERNATIONAL (FUA).
DECEMBER 1997: "IRISH TIMES" REPORT OF SALE OF TEAM AER LINGUS (TEL) BY AER LINGUS (ARL). (ARL) SOLD SRS AVIATION, 727 OVERHAUL FACILITY, TO UNITED PARCEL SERVICES (UPS).
TEAM AER LINGUS (TEL) IS CURRENTLY WORKING MAINTENANCE CONTRACTS ON TATARSTAN 727, AER LINGUS (ARL) 737-500 (2) AND A330, LAUDA AIR (LAL) 767-300, FALCON 737-300, FUTURA INTERNATIONAL (FUA) 737-400, VIRGIN ATLANTIC AIRWAYS (VAA) 747-100, & (EAT) 727-200'S (2).
IN SUMMER TO WET-LEASE WORLD AIRWAYS (WLD) MD-11, RATHER THAN AN A340 (MAY - OCTOBER 1998). 1 737-548 (25738), LEASED TO RYAN INTERNATIONAL (RYN).
JANUARY 1998: TO START SERVICE TO NEWARK, 45 DAYS AHEAD OF SCHEDULE, IN MARCH 1998, FROM DUBLIN/SHANNON (A330). ALSO, SERVES NEW YORK (JFK), BOSTON LOGAN & CHICAGO (ORD). MAY ADD 5TH USA GATEWAY IN 1998.
TEAM AER LINGUS (TEL) MAY BE SOLD TO FLS AEROSPACE (ATD).
+2 ORDERS (MARCH 1999) A321-200 (CFM56-5), (ILF) 8 YEAR LEASED. +1/1 ORDER (APRIL 1999) A330-200 (CF6-80E1A4).
FEBRUARY 1998: 2 B AE 146-200'S, B AE LEASED.
APRIL 1998: 5,620 EMPLOYEES (INCLUDING 1,284 FC & 134 MT).
2 B AE 146-200, JET ACCEPTANCE LEASED, 93 PAX, FOR COMMUTER FLEET. NO -300'S, 110 PAX, WERE AVAILABLE. RETURNS 737-500 (PT170) TO ILFC (NOW 6 737-400'S & 9 737-500'S). 2 737-400'S (-4YO: 1885-24690; -4S3: 2061-25116) & 737-548 (2261-25738) RETURNED FROM RYAN INTERNATIONAL (RYN). 2 737-400'S LEASED TO FUTURA INTERNATIONAL (FUA).
MAY 1998: TEAM AER LINGUS (TEL), PURGES ALL FUEL TANKS OF STORED 707F (09271), EX-(NIA). MAINTENANCE CONTRACT FOR 747-200, OF CORSAIR (COR) 747-200.
GARY MCGANN, CEO, RESIGNS. BERNIE CAHILL, CHAIRMAN, ACTS AS CEO, UNTIL A REPLACEMENT IS FOUND.
6 ORDERS (6/00) A320 (CFM56-5B4/P), 161Y PAX.
A321-211 (815) DELIVERY. DC-10-30 (152-46937), WET-LEASED FROM LAKER (LAK). MD-11 (506-48437 - "CILIAN/ST KILIAN"), WORLD AIRWAYS (WLD) WET-LEASED.
JUNE 1998: 59% EMPLOYEES REJECT SALE OF TEAM AER LINGUS (TEL)
TO FLS AEROSPACE (ATD).
JULY 1998: NOW 75% AGREEMENT, FOR TEAM AER LINGUS (TEL), BEING SOLD TO FLS AEROSPACE (ATD).
FISCAL YEAR (FY) 1997 = -$65.2M: -$42.6M ASSETS & -$78.1M FOR MAINTENANCE EMPLOYEE EXIT PACKAGES: 5.3M PAX (+10%), 75% LF (LOAD FACTOR) (+2), LONDON +8% RPK (TRAFFIC), EUROPE +14% RPK.
AUGUST 1998: ANNUAL REPORT STATES 6,400 EMPLOYEES.
1 ORDER (05/00) A330-200 (CF6-80E1), (ILF) 6 YEAR LEASED.
SEPTEMBER 1998: GARRY CULLEN, GROUP CEO, 30 YEAR AER LINGUS (ARL) VETERAN.
OCTOBER 1998: IN 5/99, NONSTOP TO LOS ANGELES (LAX) (A330-200) (5TH USA GATEWAY & RAISES TRANSATLANTIC CAPACITY BY +20% ASM).
NOVEMBER 1998: 2 737-46B'S (24124; 25736), LEASED TO RYAN INTERNATIONAL (RYN) FOR 6 MONTHS. EXTENDS WORLD AIRWAYS (WLD) MD-11 WET-LEASE FOR PEAK HOLIDAY SEASON AND MAY - OCT/99 FOR NEW YORK TO SHANNON, ONTO BELFAST. 1 ORDER (3/99) A320-214 (991).
DECEMBER 1998: 1 A321-211 (CFM56-5B2/P) (926) DELIVERY.
MARCH 1999: RETURNED 737-548 (26287) TO (ILF), LEASED TO AIR FRANCE (AFA)
APRIL 1999: 5,620 EMPLOYEES.
1998 PRE-TAX AER LINGUS (ARL) GROUP = +$77.6M (+13.7%), 5.8M PAX (+10%).
1 A321-200 (CFM56-53/P) & 1 A330-200 (CF6-80E1A4) DELIVERIES.
MAY 1999: JOINS "ONEWORLD" ALLIANCE, WITH BRITISH AIRWAYS (BAB) AND AMERICAN AIRLINES (AAL).
4TH & 5TH A321 DELIVERIES, (ILF) LEASED (1023, EI-CPG "ST AIDEN/AODHAN"). SOLD 737-400 (24474) TO UNICAPITAL AND LEASED BACK 15 MONTHS. MD-11 (506-48437, N272WA), WORLD AIRWAYS B(WLD) WET-LEASED, UNTIL 12/99.
JUNE 1999: 737-500 (24878), 2 YEAR LEASED TO TAROM (TRM).
SEPTEMBER 1999: DUBLIN - LONDON (CITY).
OCTOBER 1999: 1ST 9 MONTHS = 6.32B RPK (+14%), 98.68M FTK (FREIGHT TRAFFIC) (+2%), 5.03M PAX (+13%).
SOLD F 50 TO ELGIN AIRCRAFT (20118).
NOVEMBER 1999: $7 MILLION CONTRACT EXTENSION FOR WORLD AIRWAYS (WLD) MD-11, THROUGH SUMMER OF 2000 WET-LEASE. 1 737-800 (28608), (GEH) 5 YEAR LEASED, WET-LEASED TO FUTURA INTERNATIONAL (FUA).
DECEMBER 1999: PLANS FOR PRIVATIZATION, BY END OF 2000, AND RAISES $850 MILLION FOR FLEET RENEWAL.
FINALIZES ALLIANCE WITH AMERICAN AIRLINES (AAL) AND BRITISH AIRWAYS (BAB), INVOLVING CODE SHARE WITH (BAB) TO UK, CONTINENTAL EUROPE, INCLUDING AUSTRIA, ITALY, SCANDINAVIA, & SWITZERLAND. CODE SHARE WITH (AAL), DUBLIN/SHANNON - USA. JOINS ONEWORLD AS 8TH MEMBER.
JANUARY 2000: GOVERNMENT OK'S SALE OF 95% IN AER LINGUS (ARL), FOR $762M.
B AE 146-300 (E3126) RETURNED TO FLIGHTLINE.
FEBRUARY 2000: LARRY STANLEY, ACTING (CEO), REPLACING GARRY CULLEN, WHO RESIGNED.
TO LONDON GATWICK (LGW).
TO WET-LEASE 1 MD-11, FROM WORLD AIRWAYS (WLD), FOR SUMMER SEASON.
MARCH 2000: CODE SHARE WITH CROSSAIR (CSR), TO ZURICH (MD-80). CODE SHARE WITH BRITISH AIRWAYS (BAB), TO BIRMINGHAM, BRISTOL EDINBURGH, GLASGOW, LONDON (LHR) & LONDON GATWICK (LGW), MANCHESTER, AND NEWCASTLE. ALSO, CORK - BIRMINGHAM, & (LHR) TO BERLIN, BOLOGNA, BUDAPEST, COPENHAGEN, MUNICH, NICE, PRAGUE, VENICE & VIENNA. TO STOCKHOLM (5/WEEK).
APRIL 2000: 6,133 EMPLOYEES.
GARRY CULLEN, FORMER (CEO), WHO RESIGNED IN FEBRUARY, IS NOW (CEO) OF LIAT, CARIBBEAN REGIONAL OPERATOR.
1 737-800 (28617), GEH LEASED, WET-LEASED TO FUTURA INTERNATIONAL (FUA). 1 ORDER (FEBRUARY 2001) A330-200.
MAY 2000: 1 B AE 146-300 (E3193, EI-CTO), B AE LEASED.
JUNE 2000: ALONG WITH LANCHILE (LAN), JOINS ONEWORLD ALLIANCE: INCLUDING AMERICAN AIRLINES (AAL), BRITISH AIRWAYS (BAB), CATHAY PACIFIC (CAT), FINNAIR (FIN), IBERIA AIRLINES (IBE), QANTAS AIRWAYS (QAN), (LAN), & AER LINGUS (ARL), FOR TOTAL 8 MEMBERS: 215 MILLION PASSENGERS/YEAR, 557 DESTINATIONS, 266,000 EMPLOYEES, AND 1,817 AIRPLANES.
IN SEPTEMBER, DUBLIN - SHANNON - BALTIMORE/WASHINGTON INTERNATIONAL (BWI) (A330, 3/WEEK) (ITS 6TH USA DESTINATION). CODE SHARE WITH AMERICAN AIRLINES (AAL), TO NEW YORK (JFK), BOSTON, CHICAGO (ORD), AND LOS ANGELES (LAX), + BALTIMORE, WASHINGTON IN SEPTEMBER 2000. CODESHAR WITH (BAB), LONDON HEATHROW (LHR) TO DUBLIN, CORK AND SHANNON, INCLUDING FREQUENT FLYER PROGRAM.
737-448 (24474), "C" MAINTENANCE CHECK, AT (TEL), PRIOR TO RETURN TO (UAG), LEASED TO LUXOR AIR (LXR)). A320-200 (CFM56-5B4/P) (1242), DELIVERY.
JULY 2000: MICHAEL FOLEY, GROUP (CEO), EX-PRESIDENT HEINEKEN, USA.
1999 = +$52.14 MILLION (+$74.96 MILLION): 8.16 BILLION (RPK) (+15%); 138 MILLION (FTK) (+6%); 6.53 MILLION PAX (+13%); 6,133 EMPLOYEES.
1 B AE 146-300 (E3169, EI-CTN "ST CORMAC") DELIVERY.
OCTOBER 2000: CODE SHARE WITH CROSSAIR (CSR), TO ZURICH.
NOVEMBER 2000: 2 737-448 (25736), LEASED RYAN INTERNATIONAL (RYN), TIL MAY FOR APPLE VACATIONS.
DECEMBER 2000: $7.4 MILLION CONTRACT EXTENSION FOR SUMMER 2001 WET-LEASE OF WORLD AIRWAYS (WLD) MD-11 (EVERY YEAR SINCE 1998), FOR NEW YORK (JFK) - SHANNON, CONTINUING ON TO BELFAST.
4 ORDERS (2/03) A319-100'S (CFM56).
FEBRUARY 2001: 1 A320-214 (1394, EI-CVB "ST MOBHI") DELIVERY.
APRIL 2001: 5,635 EMPLOYEES.
PROJECTS 2000 = +$19 MILLION.
1 A320-214 (1443, EI-CVC "ST KEALIN/CAOLSHIONN") & 1 A330-202 (397, EI-DAA) DELIVERIES. 2 F 50'S (20208; 20209) RETURNED.
MAY 2001: 1 A320-214 (1467, EI-CVD "ST KEVIN/CAOIMHIN"), (GEF) LEASED.
JUNE 2001: FLOTATION OF AER LINGUS (ARL) IS DELAYED BY GOVERNMENT, IN VIEW OF CURRENT BAD BUSINESS CLIMATE - (ARL)'S NATIONAL VALUE, HAS BEEN REDUCED BY 40%.
MICHAEL FOLEY, (CEO), LEAVES COMPANY DURING ONGOING LEGAL ACTION.
JULY 2001: JOHN O'DONOVAN, ACTING (CEO).
GOVERNMENT NOW DECIDES TO SELL AER LINGUS (ARL) AS QUICKLY AS POSSIBLE. BRITISH AIRWAYS (BAB) REPORTED TO BE INTERESTED, WITH A $424 MILLION TAKEOVER BID.
AUGUST 2001: BERNIE CAHILL, 71, CHAIRMAN, DIED IN BOATING ACCIDENT. REPLACED BY TOM MULCAHY, EX-(CEO), OF ALLIED IRISH BANKS.
SEPTEMBER 2001: JOHN O'DONOVAN, ACTING (CEO) RESIGNED TO BECOME (CFO) OF THE BANK OF IRELAND. LARRY STANLEY, NEW ACTING (CEO).
FOLLOWING ISLAMIC, TERRORIST ATTACK ON NEW YORK WORLD TRADE CENTER (WTC) TOWERS & PENTAGON, AER LINGUS (ARL) CUTS (ASK)'S CAPACITY BY -25%, AND CUTS SEVERAL ROUTES. WILL CUT -1,700 JOBS
MD-11 (48437) WET-LEASE ENDS, & RETURNED TO WORLD AIRWAYS (WLD).
OCTOBER 2001: WILL CUT ANOTHER -800 JOBS, SO AS TO KEEP FLYING DURING CURRENT GLOBAL TRAVEL SLUMP. WILL CUT STAFF BY -32% = -2,026 LAYOFFS AND WAGE FREEZE FOR 2002 & 2003.
WILLIE WALSH, (CEO), FORMER AER LINGUS (ARL) PILOT (FC).
WILL GROUND 2 737-400'S, 1 A321-200, 2 A330-300'S, AND DEFER 2 A320 DELIVERIES, SCHEDULED FOR 2002.
NOVEMBER 2001: 2 737-400'S (L/N 1788 & 1850) OFFERED FOR SALE.
DECEMBER 2001: 737-448 (25052, EI-BXI) LEASED TO RYAN INTERNATIONAL (RYN). 737-46B (24124, EI-CRC) RETURNED FROM FUTURA INTERNATIONAL (FUA), LEASED TO (RYN).
JANUARY 2002: LAYS OFF -86 (FC) PILOTS, AT RATE OF 10, EVERY 2 WEEKS IN MARCH.
TO BARCELONA (5/WEEK) AND TO NICE (3/WEEK) (737'S).
2001 = 8.90 BILLION (RPK) PASSENGER TRAFFIC.
FEBRUARY 2002: AFTER SOME INDUSTRIAL DISPUTES, STILL PLANS TO CONTINUE WITH CUTS OF -2,000 EMPLOYEES FROM 6,130 EMPLOYEES.
(TELEPHONE: +353 (1) 705 22 22). (FAX: +353 (1) 705 38 32).
MARCH 2002: SITA: DUBCYEI. (firstname.lastname@example.org).
APRIL 2002: 6,400 EMPLOYEES.
(PH: +353 1 866 2222). (FAX: +353 1 886 2832).
MAIN BASE: DUBLIN INTERNATIONAL (DUB).
A330-301 (054, EI-SHN), WITHDRAWN FROM USE (WFU).
July 2002: To cut -105 more jobs, at Shannon Airport, (-50 by voluntary redundancy, and -55 cabin crew (CA), to take unpaid leave, for winter season).
August 2002: 2001 = -$123.97 Million/-EUR139.4 Million (+ EUR71.6 Million/+$63.46 Million): 6.6 Million PAX (-4.6%) due to the foot-and-mouth crisis and post-9/11 slump.
In October, to Geneva/Prague/Vienna, and Cork - Malaga.
September 2002: Code share with Swiss (CSR), to Geneva
October 2002: Projects 2002 = +EUR40 Million.
November 2002: In March, to resume service to Shannon - Baltimore (5/wk). Also, to Bologna. In April, to Jersey, and May to Lisbon.
Corpfin Capital, Spain, purchased 80% of Futura International (FUA), from Aer Lingus (ARL), who are keeping 20%. Corpfin Capital is the (FUA) management team.
January 2003: 2002 = +EUR 35.3 Million/+$37.3 Million (-EUR 139.9 Million): 79% LF (+7).
The "Irish Times" reported that David Bonderman, Chairman Ryanair (RYR), founder of the Texas Pacific Group, well-known for his ability to turn struggling airlines around, had expressed interest to the Irish government in purchasing troubled state carrier, Aer Lingus (ARL). (ARL) told "Reuters" it viewed the report as premature.
March 2003: 6,400 employees. (email@example.com).
Owns 20% of Futura International Airways (FUA).
April 2003: In June, Dublin - Palma de Mallorca (3/week).
June 2003: 4,500 employees. (http://www.aerlingus.com).
July 2003: 2002 = +$36.73 Million (-$145.52 Million).
August 2003: In October, Dublin to Toulouse and Tenerife.
September 2003: In March, Cork - Alicante, Barcelona, & Milan (LIN) (2/week).
17/10 orders (April, 2004) A320's (CFM56-5) including 10 (ILF) 7 year leased. Intends to evolve to an all-Airbus (EDS) fleet. Willie Walsh, (CEO) stated "the move to a single airplane type is a key element in our business strategy, bringing very significant cost savings while increasing capacity and greatly improving our operational flexibility."
October 2003: In March, Dublin to Berlin (SXF), Venice, Bilbao, Valencia, Lyon, and Zurich. In May, Dublin to Dubrovnik, Warsaw, and Copenhagen.
November 2003: 2 A320-214's (553, EI-CZV; 559, EI-CZW), deliveries.
January 2004: 2003 = +EUR 69.2 Million/+$85.6 Million (+96%) (+EUR 35.3 Million): 6.6 Million PAX (+6.2%); 81% LF (+3). Continental Europe passengers +27.6%, following introduction of 6 new routes, and transatlantic passengers +19.4%. Direct bookings through Aer Lingus (ARL)'s website accounted for 50% of all sales.
2 B AE 146-300 (E3169, EI-CTN; E3193, EI-CTO) returned to Trident Aviation leasing.
February 2004: Air Transport World awards Aer Lingus (ARL) 2004 "Phoenix Award."
Effective next month, will only offer business ("Premier") (C) on Dublin - Amsterdam/Brussels/Frankfurt routes within Europe.
March 2004: Resumes Dublin - Bristol (7376-500, 2/day).
April 2004: 4,650 employees.
Introduced a "FastPass" touchscreen self-service check-in initiative at Dublin Airport. The low-cost carrier (LCC) said it hopes to have approx 50% of its passengers using FastPass by the end of August. The FastPass technology was developed by (IBM) specific to Aer Lingus (ARL) requirements.
2 A320-214's (2191, EI-DEA "St Aideen/Eatoin;" 2206, B "St Nathy/Nathy"), (ILF) leased.
June 2004: Tom Mulcahy, Chairman resigned after tax scandal at Allied Irish Banks.
Ireland is expected to start "open skies" negotiations with the USA, hoping to gain traffic rights for Aer Lingus (ARL) to at least one more USA destination and one Canadian city. At present, (ARL) serves Baltimore/Washington, Boston, Chicago, Los Angeles, and New York (JFK).
Implements interline e-ticketing with OneWorld partners Iberia Airlines (IBE), and American Airlines (AAL).
Amadeus acquires a controlling 55% stake in travel portal Opodo for EUR 62M/$74.5M in cash. Opodo was created by 9 European network airlines: Aer Lingus (ARL); Air France (AFA); Alitalia (ALI); Austrian Airlines (AUL); British Airways (BAB); Finnair (FIN); Iberia (IBE); (KLM); & Lufthansa (DLH) - - whose stakes will be reduced in proportion to the investment by Amadeus. The 3 biggest shareholders: (AFA); (BAB) & (DLH) - - will hold 10.3% each, while the shareholdings of (ARL) & (AUL) will be diluted to 0.51% each. Amadeus, which is majority owned by (AFA); (IBE) & (DLH), said Opodo will continue to operate as a separate company.
OneWorld Alliance: Aer Lingus (ARL); American Airlines (AAL); British Airways (BAB); Cathay Pacific (CAT); Finnair (FIN); Iberia Airlines (IBE); LAN (LAN); & Qantas Airways (QAN).
A320-214 (2217, EI-DEC "St Fergal/Fearghal"), (ILF) leased.
July 2004: In October, Dublin to Liverpool (daily), Las Palmas (weekly), Lanzarote (weekly), and Budapest (4/week).
(ARL) senior management asks the government for permission to seek financial backing for a buyout.
2003 = +$86.89 Million (+$37.01 Million): 81% LF; 6.6 Million PAX (+6.2%).
August 2004: In April, Cork - Faro (3/week), Munich (3/week), Nice (2/week), & Rome (2/week).
Is considering leaving the OneWorld (ONW) alliance.
September 2004: 2 A320-214's (2256, EI-DEF "St Declan/Deaglan;" 2272, EI-DEG "St Fachtna/Fachtna") deliveries. 2 A320-214's (553, EI-CZV; 559, CZW) sold to Chasseral Aircraft Leasing.
October 2004: 1,560 employees from all categories of staff across the company applied for voluntary redundancy. Aer Lingus (ARL) aims to reduce its workforce by a third to about 2,700 over 3 years.
Resumes Dublin - Liverpool (daily). Dublin - Budapest (4/week). In December, Dublin - Orlando (3/week charter). In May, to resume Dublin - Shannon - Baltimore (3/week).
3 737-548's (24878; 24919; 24968), sold to Barkham Associates and leased to Air Baltic (BAU). A320-214 (2294, EI-DEH "St Malachy/Maolmhaoghog"), delivery.
November 2004: Dublin - Lanzarote, Las Palmas (weekly). In March, Dublin to Seville (2/week), Naples (3/week), Marseille (3/week), & Hamburg (4/week). Cork, Dublin - Milan (BGY).
Following a dispute with the government's Prime Minister, all top 3 senior management resigned and will leave in May: Willie Walsh, (CEO); Seamus Kearney, (COO), & Brian Dunne, (CFO).
2 737-548's returned to (ILF) for 5 year leased to Pulkovo Airlines (STG) with +3 to be delivered later.
February 2005: 2 A320-214's (2364; 2374), (ILF) leased.
March 2005: A320-214 (2399, EI-DEK), (ILF) leased.
April 2005: 2004 = +EUR 1.2 Million (-98%) (+EUR 69.2 Million): 7 Million PAX (+5.5%); 82% LF (+1).
Dermot Mannion, 47, (CEO), ex-Emirates (EAD), replaces Willie Walsh, who will become (CEO) of British Airways (BAB).
May 2005: 3,606 employees (including 457 Flight Crew (FC), 1,054 Cabin Attendants (CA), & 207 Maintenance Technicians (MT)).
The government decided in principle to sell a majority shareholding in state-owned Aer Lingus (ARL) and to proceed with a second terminal at Dublin Airport.
May 2005: A320-214 (2432, EI-DEN "St Kieran"), (ILF) leased.
July 2005: In winter schedule, will launch new direct services, Dublin to Fuerteventura, Bordeaux, Riga, and Salzburg, plus Cork - Warsaw, its first direct service to Poland.
A320-214 (2486, EI-DEO) delivery.
August 2005: 3,906 employees (+8.3%).
October 2005: Aer Lingus (ARL) will launch thrice-weekly service between Dublin and Dubai in March aboard A330s. (ARL) said the new route is the "first step in the expansion of its new long-haul network."
A320-214 (2542, EI-DEP "St Eugen/Eogha"), (ILF) leased, delivery.
November 2005: Aer Lingus (ARL) confirmed the appointment of Merrion Capital and Goldman Sachs as its advisers to assist in the privatization process recently initiated by the Irish government. New investment is essential to fund fleet acquisition and other development expenses required to underpin growth in both the medium and long term, the Irish state-owned airline stressed in a statement.
(ARL) will launch 3X weekly service between Dublin and Dubai in March aboard A330s, the first step in the expansion of its new long-haul network. Aer Lingus (ARL) will inaugurate nonstop service from Dublin to Rennes (France) on May 2nd. The seasonal summer service will run through Aug 15th with 2 flights a week on Tuesday/Sunday using an A320.
Irish and USA governments reached agreement on a revised framework for air services between the countries that will see a phase-in of an open skies policy by April 2008, subject to the ongoing negotiations between the USA and (EU) on transatlantic "open skies." Irish airlines will be allowed to fly to three additional USA gateway cities (the limit currently is five) as well as to increase frequency on Dublin nonstop services from November 2006. (ARL) will be the obvious beneficiary. The agreement abolishes the existing quota system for compulsory landings for transatlantic flights at Shannon. For the next 12 months, every second transatlantic flight will continue to stop at Shannon, but the stopover will be phased out over 18 months from November 2006. From April 2008, flights from the USA to Ireland will not be required to stop at Shannon and Irish carriers will be allowed to fly to any USA airport.
Separately, (ARL) agreed to a "fly anywhere" deal with cabin crew (CA) unions following 18 months of negotiations, the Irish Independent reported. Under the terms of the agreement, (ARL) can fly to any airport in the world. It also allows for a reduction in the number of cabin crew flying on existing routes. No deal could be reached on reduction of time off for crews between long-haul flights.
A320-214 (2583, EI-DER "St Mel"), (ILF) leased, delivery.
December 2005: Aer Lingus (ARL) countered Ryanair (RYR)'s Dublin expansion with an announcement of six new routes from Dublin and Cork. It will add frequencies on routes to Amsterdam, Rome, Nice, Warsaw, Alicante and Malaga. "We are committed to both expanding capacity and identifying new commercially viable opportunities for the airline," (COO), Niall Walsh said.
(ARL) will base a 4th airplane at Cork from June. This will allow the addition of 3 new routes as follows:
On June 20th, 3 flights a week to Birmingham (Tue/Thu/Sat);
On Jun 27th, 3 flights a week to Berlin Schoenefeld (Tue/Thu/Sat);
On July 1st, 1 flight a week to Tenerife South (Sat).
All 3 routes will be operated with A320s.
(ARL) will inaugurate nonstop service from Dublin to Poznan, Poland, on Apr 1st and will operate 1 weekly flight on Saturday with an A320. On May 3rd the frequency will double to twice a week with the addition of a Wednesday flight.
(ARL) will inaugurate nonstop service from Dublin to Rennes, France, on May 2nd and will operate 2 flights a week on Tuesday/Saturday, with an A320.
(ARL) will inaugurate nonstop service from Dublin to Palma, on April 29th and will operate 3 flights a week on Tuesday/Thursday/Saturday, with an A320.
A320-214 (2635, EI-DES), (ILF) leased.
January 2006: Aer Lingus (ARL) will order four A330s for delivery beginning later this year, according to sources at the carrier, possibly indicating it will favor the A350 over the 787 for its upcoming fleet expansion. It has a need for up to 12 A350-type airplanes. The deal is worth $400 million, according to media reports.
February 2006: Aer Lingus (ARL) signed a letter of intent (LOI) to purchase two A330s for delivery in mid-2007. They will be powered by GE (CF6-80E1)s. Aer Lingus (ARL) already operates seven A330s, four of which are leased. It continues to evaluate "new-generation long-haul fleet opportunities," according to CEO Dermot Mannion.
Aer Lingus (ARL) has placed an order for 2 additional A330s (an A330-200 & A330-300). The airplanes are expected to be delivered in mid-2007 and will take the airline's fleet of A330s to 9.
March 2006: Aer Lingus (ARL) reported summary financial results for 2005 showing that full-year operating profit from continuing activities decreased -32.3% to +€72.4 million/+$86 million from +€107 million in 2004 while pre-tax profit soared to +€82.6 million from just +€1.1 million the year before. Details were not provided. Revenue fell -2.6% to €883 million. The Irish carrier said overall expenses grew by +€10.8 million, reflecting a +€33.1 million rise in fuel cost, a -39.9% reduction in distribution cost and a -11% cut in its workforce to 3,475. No other figures were reported. The airline is hedged up to 51% of its estimated 2006 fuel requirement. Passenger numbers rose +15.6% to 8 million and load factor was 81% LF.
"2005 has been a year of success for Aer Lingus (ARL), achieved against a backdrop of challenges which were clearly highlighted last year as increasing fuel costs, fierce competition and changes in internal work practices," Chairman John Sharman said.
Aer Lingus (ARL) announced the following appointments to its senior management team: COO Niall Walsh to Deputy Chief Executive, Greg O'Sullivan to Finance Director, Enda Corneille to Commercial Director, Stephen Kavanagh to Planning Director, Liz White to Human Resources Director and Dick Butler to Ground Operations Director.
Aer Lingus (ARL) signed a contract for the purchase of one A330-200 and one A330-300, confirming an announcement made last month. The airplanes will be delivered in mid-2007 and will be based at Dublin Airport. The A330-200 will seat 24 passengers in Premier (C) and 245 in economy (Y) while the A330-300 will carry 24 in Premier (C) and 303 in economy (Y). Both will be powered by GE (CF6-80E1)s.
The airline noted that the airplanes will be used for "new long-haul routes in anticipation of bilateral changes." The order brings the Irish flag carrier's long-haul fleet to nine A330s.
Separately, Aer Lingus (ARL)'s long-awaited privatization once again is a hot and much-disputed topic in Ireland as the government is expected to announce this month the details and timing of the transition. Management prefers an Initial Public Offering (IPO) over a trade sell-off to realize its strategic plan and fund its ambitious fleet expansion. In December, (AIB)/(UBS) recommended to the government that the airline be privatized through a flotation rather than a private placement. Workers, however, oppose a sell-off and have threatened to strike.
Aer Lingus (ARL) CEO, Dermot Mannion would like to see a June flotation and has warned of significant negative consequences if there is a postponement, the Irish Times reported. "I think the difficulty a transaction post-June poses is twofold," the former Emirates Airlines (EAD) executive said after addressing a lunch hosted by the Institute of Directors. "One, it's holiday season. It's a four-month delay. Secondly, in terms of engagement with the investment community, they have a very short attention span and if it's a transaction much later in the year they won't really engage with us now and will say come back to us two or three months from now."
April 2006: Employees: 3,906.
The Irish government decided to sell off of most of Aer Lingus (ARL) through an Initial Public Offering (IPO) nearly a decade after it first announced its intention to privatize the carrier, but said it will retain a stake of "at least 25.1%." "The transaction is taking place in order to give Aer Lingus (ARL) both the commercial flexibility and the financial muscle to compete and succeed in the global marketplace," Transport Minister Martin Cullen said in a statement.
The government opted to float the airline on the stock exchange instead of selling it outright, although it did not disclose when the transaction will take place. Last month, Aer Lingus (ARL) management urged ministers to proceed as soon as possible, preferably before summer. "It's not for the government to notionally or artificially pick a date at this stage. The process is now under way, and will be the same as exacted in any company in the private or public sector," Cullen said, adding that advisers will "immediately start work on the sale."
To appease unions likely to object, the government said it instructed Aer Lingus (ARL) management to negotiate with labor on a package of measures prior to the (IPO). These include issues such as job security, pensions and possible future dilution of employee shareholdings.
Aer Lingus (ARL)'s largest union, the Services, Industrial, Professional and Technical Union (SIPTU), served protective notice of industrial action that will become effective if no agreement is reached on pensions, job security and employee shareholding ahead of the airline's privatization. The (SIPTU) pledged to continue working during the Easter travel period ending in two weeks. Union members at the carrier supported industrial action in a vote last week.
Aer Lingus (ARL) commenced thrice-weekly Dublin - Dubai service on March 28, its first non-USA long-haul flight. Passengers can reach an additional 21 destinations from Dubai through a partnership with Emirates Airlines (EAD). The carrier said it expects more than 70,000 passengers on the route in the first year.
Aer Lingus (ARL) said it will add a fuel surcharge to flights to and from the USA and Middle East of +€35/+$43.20 and +$40 each way, effective May 15. It said it is the first time it has imposed a fuel surcharge on any of its routes and that the move is "regrettable but necessary." The airline said it is 51% hedged in 2006 and that fares on transatlantic flights fell nearly -5% last year, while fuel costs increased by +€33.1 million.
Construction of a second main runway at Dublin Airport was approved by the Fingal County Council Planning Department. Dublin Airport Authority (DAA) welcomed the decision, calling the runway "a vital component of the overall future development plans to enable the airport to handle in excess of 30 million passengers per annum." (DAA) said that based on current forecasts, the runway needs to be operational within the next 6 - 7 years. However, "it is expected that [it] will not be brought into operation until usage of the current runway is maximized." The new runway will have a paved length of 3,110 m and will be built 1.6 km to the north and parallel to the present main runway, 10/28, which has a length of 2,637 m. It will replace an existing runway, 11/29, that is the shortest and is used for category AB airplanes or light propeller airplanes. The new landing strip will be designated 10L/28R while its older sibling is re-designated 10R/28L. Dublin's third runway, 16/34, is a crosswind strip and measures 2,072 m in length.
May 2006: The Irish government is targeting September or October for the sale of part of its stake in Aer Lingus (ARL), according to press reports. No schedule was announced, when it agreed last month to the Initial Public Offering (IPO), which will see it reduce its stake from 85.1% to 25.1%. Aer Lingus (ARL) management had been pushing for a flotation in June.
Aer Lingus (ARL) and Oneworld confirmed that Ireland's flag carrier is leaving the alliance. The decision was approved at the airline's board meeting last week, concluding a process that began when former Aer Lingus (ARL) boss Willie Walsh toyed with leaving the partnership as he began the transformation of the state-owned carrier from a network operator into a point-to-point Low Cost Carrier (LCC).
"Alliance membership has inevitably become less relevant for the airline over time, with an increasing number of customers availing of our new direct services at low fares," current Chief Executive. Dermot Mannion said. "Aer Lingus (ARL)'s strategy has changed fundamentally since it joined the alliance six years ago and is no longer convergent with Oneworld's," the alliance said in a statement.
The airline joined Oneworld on June 1, 2000. It did not provide a timeframe for departure, but is required to give its partners one year's notice. Oneworld said the timing and terms for the withdrawal will be considered at the next meeting of its governing board but that it likely will occur early next year when Japan Airlines (JAL), Malev Hungarian Airlines (HGA), and Royal Jordanian (RJA) are expected to join.
The alliance also noted that Aer Lingus (ARL) is its smallest member, with about 2% of total capacity (ASK)s offered in 2005, whereas its three new members will increase capacity by more than +20%. "Talks are progressing between Oneworld and other airlines interested in joining," it stressed in a statement.
Aer Lingus (ARL) has a large slot holding at London Heathrow (LHR) and operates all codeshare flights with British Airways (BAB) between Heathrow and Dublin, Cork and Shannon. It will continue to maintain bilateral relationships with Oneworld members and, according to Oneworld, does not intend to join another alliance or negotiate agreements with outside carriers.
Last month, the Irish government gave its official approval for a part-privatization of the carrier, likely through a stock flotation. The schedule for the Initial Public Offering (IPO) has not been announced, but management has indicated it could be completed during September.
Aer Lingus (ARL) leased a new A320 from ILFC (ILF) for 7 years. The airplane was scheduled to be delivered on May 2007.
June 2006: Aer Lingus (ARL) will add the following new routes from October:
Cork to Lanzarote;
Cork to Madrid;
Cork to Prague;
Dublin to Newcastle;
Dublin to Turin;
The airline will upgrade the following seasonal summer routes to year-round service:
Cork to Berlin;
Cork to Birmingham;
Cork to Faro;
Cork to Tenerife;
Dublin to Poznan;
Dublin to Seville;
and the airline will increase frequency on a number of routes from Cork and Dublin.
A320-214 (2810, EI-DET "Brendan"), CIT Group (TCI) leased.
July 2006: Irish Transport Minister, Martin Cullen outlined privatization plans for Aer Lingus (ARL) to Ireland's parliament, confirming the government's April decision to sell off most of its stake in the carrier by the end of September. The share sale will include both an offering to "domestic and international institutions" and an Initial Public Offering (IPO). It has not yet been determined how many shares will go to retail investors and how many will be put up in the (IPO), but the government will retain at least a 25.1% stake in the airline, Cullen said.
"The primary objective of the share offer is to allow Aer Lingus (ARL) to raise funds to ensure that it has the financial strength to fund business development and to withstand the external shocks and industry downturns that are a recognized feature of the aviation industry," Cullen told lawmakers, who voted to approve the plan.
He said retail investors will be required to make a minimum investment of €10,000/$12,766. He added that by retaining more than a quarter of the shares, the government will maintain "significant influence over matters requiring shareholder approval."
Aer Lingus (ARL) is offering employees a broad incentives package, including a +3% pay raise and increased pension funding, to back privatization. But that didn't stop hundreds of airline workers at Dublin, Shannon and Cork airports from engaging in a 90-minute walkout in protest of the plan. The walkout caused the carrier's flights to be delayed throughout the day.
Cullen said the sell-off would help alleviate workers' concerns. "The possibility of raising new equity also affords the company the opportunity to address the concerns of the Aer Lingus (ARL) trade unions and workers arising from the funding position of the company's main pension scheme," he explained.
Aer Lingus (ARL) will launch service from Dublin to Turin and Newcastle and from Cork to Madrid, Lanzarote and Prague from October. Flight frequency on the new routes was not announced, but the carrier did say it will add capacity by basing an extra A320 in Cork. Additionally, summer flights from Dublin to Poznan and Seville and from Cork to Berlin, Birmingham, Faro and Tenerife now will be operated year-round.
August 2006: Aer Lingus (ARL) will provide passengers on flights originating in the USA with a free 0.5-liter bottle of water. The move is in response to new USA security requirements prohibiting passengers from carrying liquids onto flights.
Aer Lingus (ARL) and the Irish government yesterday formally announced details of their plan to float more than 50% of the government's shares in the airline on the Dublin and London stock exchanges in late September.
Net proceeds of the Initial Public Offering (IPO) will be used primarily to finance expansion of the carrier's short-haul and long-haul fleets in addition to a one-off pension contribution. The sale is expected to raise €400 to €500 million/$509.9 to $637.4 million in fresh equity.
Aer Lingus (ARL) intends to order up to 14 long-haul airplanes, with negotiations starting this fall for 787s and A350 XWBs, the Financial Times reported. The airline firmed up an order for two A330s in March.
The government currently owns 85.1% of the carrier, with the remaining 14.9% owned by employees (the Employee Share Ownership Trust holds 12.6%). The government will retain a significant minority shareholding of at least 25.1%, according to the joint statement. The size of the employee trust initally will be reduced when new shares are sold in the flotation but will return to its current level through a profit-sharing scheme. Ordinary share purchases will be subject to a minimum subscription of €10,000.
"This is the right decision for the company, its employees, customers and Ireland and it is taking place in order to give Aer Lingus (ARL) both the commercial flexibility and the financial strength to succeed in what is a highly competitive global marketplace," Minister for Transport Martin Cullen commented.
To CEO, Dermot Mannion, the flotation will "enable us to capitalize on the significant profitable growth opportunities that exist for us today." Mannion, who joined the airline from Emirates (EAD) Group last year, is seeking to develop Dublin as a minihub for transferring passengers, especially between Europe and the USA.
(ARL)'s present long-haul nework is rather limited and includes four routes to the USA (New York (JFK), Boston, Chicago O'Hare and Los Angeles), and a new route to Dubai. It would benefit dramatically from an (EU) - USA Open Aviation Area and aims to add several new USA destinations, among them San Francisco, Philadelphia, Washington Dulles, Dallas/Fort Worth or Houston. Its short-haul network comprises 11 routes from Ireland to the UK.
Dublin Airport Authority (DAA) announced yesterday details of the new €395 million/$505.7 million Terminal 2 at Dublin Airport (DUB), scheduled to begin construction in the second quarter of 2007 and open in the fall of 2009, at which point it will be capable of handling 15 million passengers annually. The three-story, 75,000-sq-m facility will raise yearly passenger capacity at (DUB) to 35 million and "will feature large airy spaces in areas such as check-in, baggage reclaim, security and the departures lounge" along with "dedicated facilities to meet the needs of business travelers and families traveling with young children," (DAA) said. Total investment is €600 million, which will include a new 24,000-sq-m pier building, road and utility upgrades and other projects. (DAA) also plans to build a new parallel runway and an extension to Terminal 1 over the next 10 years. Aer Lingus (ARL) will be the primary tenant of T2.
September 2006: Aer Lingus (ARL) will report half-year profits of just under +€20 million/+$25.7 million, up +27% from the +€15.5 million earned in the first six months of 2005. It is forecasting a full-year profit of +€92.5 million, an increase of +7.8% from the +€85.8 million earned in 2005. It reportedly attributed the first-half growth partly to a +12% increase in passengers on European routes.
Aer Lingus (ARL) will list on the Dublin and London stock markets on October 2 and will announce its final share price on September 27. The Irish government unveiled plans for the Initial Public Offering (IPO). Aer Lingus set an indicative price range of €2.1 - €2.7 per share, valuing the airline at €601 - €773 million prior to the issuance of 208.4 million new shares. It reportedly will put €104 million toward its pension fund and use the rest to fund fleet expansion.
October 2006: Aer Lingus (ARL)'s life as a publicly traded company got off to a surprisingly rocky start with archrival Ryanair (RYR) announcing yesterday the launch of a hostile €1.48 billion/$1.88 billion bid for the Irish flag carrier.
The Low Cost Carrier (LCC) confirmed it already has acquired more than 16% of the issued share capital of Aer Lingus Group (ARL), which listed on the Dublin and London stock exchanges Monday at €2.20 per share. Ryanair (RYR) will pay €2.80 per share in cash for the remaining shares if it is able to acquire at least a majority of them.
Last month Aer Lingus (ARL) and the Irish government valued the airline at €1.1 billion. The government still holds 34.8% of the airline, while current and retired (ARL) employees hold 2.2% and the Aer Lingus (ARL) Employee Share Ownership Trust has just under 10%.
"This offer represents a unique opportunity to form one strong airline group for Ireland and for European consumers," Ryanair (RYR) CEO Michael O'Leary commented. He said a merger would establish an entity serving more than 50 million passengers annually and "capable of competing on the European and world stage against other large European airline groups, including Lufthansa (DLH)/(SAS)/Swiss (CSR), Air France (AFA)/(KLM), and (BAB)/Iberia (IBE)."
O'Leary said that if successful, Ryanair (RYR) would maintain Aer Lingus (ARL) as a separate company under common ownership, with the carriers operated as "competing airlines." Following Air France (AFA)'s example with (KLM), and Lufthansa (DLH)'s with Swiss (CSR), Ryanair (ARL) would retain the Aer Lingus (ARL) brand. It also is committed to retaining all "profitable" (ARL) routes and its coveted slots at London Heathrow (LHR), which are a sensitive matter to the Irish government. Ireland has retained a blocking minority in the flag carrier in order to maintain control over its 23 slots at (LHR) and said yesterday it has no intention of selling, according to press reports.
Ryanair (RYR) said the acquisition would reduce Aer Lingus (ARL) costs "through improved efficiencies and Ryanair (RYR)'s superior purchasing power" and give it "access to the benefit of Ryanair (RYR)'s lower cost airplane deliveries and lower cost financing facilities."
The (LCC) also stated it plans to "upgrade Aer Lingus (ARL)'s transatlantic fleet and improve its long-haul product," although it stressed that "nothing in this transaction [acquisition] will deflect Ryanair (RYR) from continuing to focus on its own pan-European expansion."
(ARL) Chairman, John Sharman said the airline's board rejected Ryanair (RYR)'s bid and was quoted as saying that the offer was "unsolicited, wholly opportunistic and significantly undervalues the group's businesses and attractive long-term growth potential."
The deal requires approval from competition authorities, O'Leary aknowledged, but he pointed out that there are "numerous precedents across Europe . . . The (EU) has recognized the value of competitive European airline consolidation because of the benefits which it brings to consumers." He said Ryanair (RYR) and (ARL) operate about 500 combined routes but compete on only 17.
Aer Lingus (ARL)'s (SIPTU) union, which opposed the carrier's privatization, said the bid was proof the flotation made no sense. "Anyone with a titter of wit could have foreseen this development," (SIPTU) President, Jack O'Connor said. "If they can pull it off, it will enable Ryanair (RYR) to take out its principal competitor on their main routes, acquire the critically valuable Heathrow slots, consolidate market dominance and dictate whatever price they like to airports, with obvious long-term adverse consequences for workers and the traveling public alike."
The Irish Minister of Transport, Martin Cullen formally came out in opposition to Ryanair (RYR)'s proposed takeover of Aer Lingus (ARL), a day after Ryanair (RYR) launched an unsolicited bid priced at €2.80 per share, valuing the newly privatized flag carrier at €1.48 billion/$1.88 billion.
Shares in (ARL) closed at €2.98 Friday, suggesting the market expects Ryanair (RYR) to raise its bid or another suitor to emerge.
According to the Unison.ie website, Cullen said that it is not in the interest of the Irish public to become overly dependent on one airline and that the government had retained a 28% stake in Aer Lingus (ARL) "precisely to block a hostile takeover bid."
Separately, Aer Lingus (ARL) CEO, Dermot Mannion told Irish radio that he expects the airline's major institutional shareholders to reject the Low Cost Carrier (LCC)'s bid, according to the Associated Press.
Should Ryanair (RYR) overcome government resistance and win European Commission (EC) approval for the deal, the resulting airline group will be one of Europe's five biggest, offering 6,645 weekly frequencies, 25 fewer than (SAS) Scandinavian Airlines, according to an analysis by the Official Airline Guide (OAG) Worldwide.
Ryanair (RYR) operates to 113 destinations and Aer Lingus (ARL) to 57, but the two overlap on just 18, (OAG) noted. They likely would be required by the (EC) to surrender slots at Dublin, where (ARL) operates 502 weekly flights and Ryanair (RYR) 569. The two also have a major presence at the London area airports where, according to (OAG), Ryanair (RYR) operates 1,031 weekly flights at Stansted, 102 at Luton and 63 at Gatwick. Aer Lingus (ARL) operates exclusively at Heathrow with 145 flights.
Aer Lingus (ARL) pilots (FC), under the name Irish Airline Pilots Pensions, have accumulated a 2.12% stake in (ARL) as part of an effort by employees of the recently privatized Irish carrier to block a takeover by Ryanair (RYR). According to a submission to the Irish Stock Exchange yesterday, the pilots bought 9.8 million shares at €3.04/$3.82 each. Ryanair (RYR) made a cash bid of €2.80 per share last week. Its offer is conditional on securing at least 50.1% of the carrier. It currently holds 19.2% while the Irish government has 28% and the Employee Share Ownership Trusts about 12%.
Later, the board of Ryanair (RYR) Holdings will publish and post its Offer Document to Aer Lingus (ARL) shareholders today, maintaining its cash bid of €2.80 per share that values the Irish flag carrier at approximately €1.48 billion, a total the (LCC) said is "significantly higher" than the €1.16 billion (IPO) value.
Ryanair (RYR) currently holds 19.2% of (ARL). "Ryanair (RYR) believes that its cash offer represents excellent value for Aer Lingus (ARL) shareholders and offers significant attractions to Aer Lingus (ARL)'s stakeholders," CEO, Michael O'Leary said. "This offer represents a unique opportunity to form one strong Irish airline group with over 50 million passengers per annum, capable of competing against the three European mega carriers. Ryanair (RYR)'s strategy will be to expand, enhance and upgrade Aer Lingus (ARL)'s operations. Without Ryanair (RYR), Aer Lingus (ARL) will continue to be a small regional European airline which, because of its size and regional nature, is unlikely to be of interest or relevance to the three major European airline groupings."
Ryanair (RYR) reiterated its intention to operate Aer Lingus (ARL) as a separate, competing entity and also said it would reduce (ARL)'s average short-haul fare by -2.5% per year over the next four years, lower fuel surcharges, reduce costs through "improved efficiencies, superior purchasing power and lowering overheads," offer (ARL) access to Ryanair (RYR) airplanes or negotiate better deals with airplane manufacturers, upgrade (ARL)'s long-haul fleet and product and "improve Aer Lingus (ARL)'s inferior customer service."
Although it did not mention layoffs in the preview, O'Leary was quoted as saying at a Dublin news conference, "There is no doubt in my mind there would be significant job losses at Aer Lingus (ARL) if Ryanair (RYR)'s bid succeeds," but he said that accepting the offer would afford (ARL) members of the Employee Share Ownership Trust an average profit of €60,000 each. The Associated Press reported that he said catering and clerical positions at (ARL) would be cut.
"Ryanair (RYR) believes that the consequences of its bid failing will be that Aer Lingus (ARL) employees will hold a substantial minority shareholding, the value of which will have fallen significantly," the (LCC) said, adding that the bid currently is "supporting an inflated share price."
Although Ryanair (RYR) and other low-cost carriers (LCC)s generate large amounts of revenue from "nonticket sources," legacy airlines derive significantly more by selling frequent-flier miles to partners, typically via co-branded credit cards, says a recent study by IdeaWorks Co (ideaworkscompany.com).
According to the report, Europe's top four (LCC)s raised €470 million/$589.1 million in ancillary revenues last year, by charging for things such as seat assignments, checked baggage, credit card usage, onboard snacks and beverages, aswell as other items. IdeaWorks estimated that Ryanair (RYR)'s "aggressive use of a la carte pricing" generated ancillary revenues of €7.76 per passenger in 2005, placing it well ahead of Aer Lingus (ARL) (€5.99), SkyEurope Airlines (SKP) (€4.38), easyJet (EZY) (€4.37), and Air Berlin (BER) (€2.51).
Yet these performances were eclipsed by United Airlines (UAL), which generated €9.40 per passenger from its Mileage Plus frequent-flier program, and Alaska Airlines (ASA), which generated €8.55 from its Mileage Plan credit card. In fact, the consultancy estimated that 70% "of the miles earned by Mileage Plan members are now generated by charge activity tied to" Alaska (ASA)'s co-branded card. In total, USA frequent-flier programs generated "an estimated €2.5 billion."
IdeaWorks said the figures suggest that "even greater ancillary revenues may reside in an activity traditionally scorned by (LCC)s . . . frequent-flier programs." The full report is available at IdeaWorksCompany.com.
November 2006: Aer Lingus announced an increase in European service for the 2007 summer schedule as follows :
New Daily Services:
Dublin to Budapest, Geneva, Lisbon, Prague, Venice and Zurich will increase to daily flights.
Dublin to Barcelona, Berlin, Bologna, Dubrovnik, Krakow, Madrid, Naples, Nice, Rennes, Riga and Seville will have increased frequency.
Cork to Birmingham, Faro and London Heathrow will have increased frequency.
New For Summer 2007:
Cork to Manchester will commence from March 7 with 5 flights a week.
Cork to Madrid and Prague with 3 flights a week each.
Dublin to Newcastle and Milan-Malpensa.
Dublin to Athens will commence from June 7 with 3 flights a week.
Aer Lingus (ARL) intends to add 26 long-haul flights per week, following delivery of two new A330s in May and June that will boost its long-haul fleet to nine airplanes. "The arrival of two new long-haul airplanes next year, marks the first phase of the long-haul expansion plan and gives Aer Lingus (ARL) the opportunity to develop its presence in the USA market," CEO, Dermot Mannion said in a statement.
The Irish carrier, which is the target of a hostile takeover by Ryanair (RYR), currently serves four destinations in the USA and one in the Middle East. The announced expansion for next year contains an increase in frequencies on its current network, including boosting Dublin - New York (JFK) to twice-daily, and Shannon - (JFK) to daily. Its Boston service will increase from 11 flights per week to two flights daily (one from Dublin and a second from Dublin, via Shannon) and its flights to Chicago O'Hare will rise from daily, to twice-daily (one nonstop from Dublin and the second from Dublin via Shannon). Dublin - Los Angeles will go from five flights weekly to a daily service and Dublin - Dubai from three to four weekly flights.
The carrier also is eyeing an expanded short-haul network. It announced additional frequencies and new destinations for its European network that will bring to 65 the number of short-haul routes it will operate for summer 2007. It will launch a five-times-weekly Cork - Manchester service in March, and three-times-weekly service from Cork to both Madrid and Prague. Beginning in June, it will commence new Dublin routes to Newcastle and Milan Malpensa, and a thrice-weekly service to Athens. Flights from Dublin to Budapest, Geneva, Lisbon, Prague, Venice and Zurich will increase to daily. It will also expand frequencies from Dublin to Barcelona, Berlin, Bologna, Dubrovnik, Krakow, Madrid, Naples, Nice, Rennes, Riga and Seville and from Cork to Birmingham, Faro and London Heathrow.
Later, Ryanair (RYR) extended the deadline for its offer for Aer Lingus (ARL) to December 4 from November 13, as it conceded that fewer than 0.1% of (ARL) shareholders have accepted its €2.80/$3.60 per share bid.
The Low Cost Carrier (LCC) said that "valid acceptances of the offer had been received in respect of 504,994 Aer Lingus (ARL) Shares," representing about 0.095% of the issued share capital. (ARL) urged its shareholders earlier this month to take no action on the offer.
Ryanair (RYR) said the deadline for it to raise its bid price or revise its takeover strategy if it fails to gain a majority stake will be December 8. It currently holds 19.16% of its Irish competitor and has made its bid conditional on securing at least 50.1%. In addition to the opposition of (ARL) management, the Irish government repeatedly has said it will not sell its 25.35% stake under any circumstances.
Later, Ryanair (RYR) increased its stake in Aer Lingus (ARL) to 25.2% from 19.2%, which brings the (LCC)'s holding in the recently privatized national carrier on a par with the 25.4% held by the Irish government.
Ryanair (RYR) said that it bought just under 32 million shares for about €87.4 million/$114.9 million, or an average price per share of €2.75. Its takeover bid for Aer Lingus (RL), launched on October 5, is set at €2.80 per share. Deadline for the bid is December 4. Thus far, the "anti-Ryanair (RYR)" bloc comprising the government, (ARL) management, employees and pilots (FC) controls more than >46% of the airline. The Employee Share Ownership Trust, which holds 12.58%, voted to reject the offer last week.
Aer Lingus (ARL) CEO, Dermot Mannion, speaking at the Future of Air Transport Conference in London, reiterated his opposition to the takeover. "We have just completed the Initial Public Offering (IPO) process. We want to stay independent. We are not seeking another takeover bidder," he said.
(ARL) is expected to publish its final argument against the bid Friday, when it also will present details of its cost-cutting program to unions. The Irish Takeover Panel, the Irish (M&A) watchdog, has told the carrier that it must provide details of its plans to cut costs by December 1. According to FinFacts Ireland, management is seeking to trim €75 million off its cost base.
The European Commission (EC) is scheduled to release its position on the competitive aspects of the bid December 6.
December 2006: Aer Lingus (ARL) presented its unions with a 12-point cost-cutting plan as part of its continuing effort to thwart Ryanair (RYR)'s floundering takeover bid and succeed as an independent carrier. According to press reports, (ARL) has promised not to cut jobs without workers' consent. It also intends to simplify pay grades, enact standard work rules, renegotiate airport and ground handling contracts, introduce a fuel efficiency plan and look into the establishment of overseas bases, according to "The Irish Times."
Ryanair (RYR) extended the deadline for its offer for Aer Lingus (ARL) shares once again, this time to the afternoon of December 22, lending credence to (ARL) CEO, Dermot Mannion's acknowledgement at the Future of Air Transport conference in London, that the (LCC) is "not going anywhere anytime soon." Ryanair (RYR) issued the extension despite the fact that valid acceptances have been received for just 4.96 million shares, representing 0.93% of the issued share capital of the recently privatized flag carrier. It already holds 25.2% of Aer Lingus (ARL).
Discussing Ryanair (RYR)'s rising stake, Mannion said that (ARL) accepts its fiduciary responsibility to the (LCC) as it does to all of its shareholders, but stressed again that his airline wishes to remain independent. He told the conference that (ARL) is second only to Ryanair (RYR) in Europe in profitability margin, pointing out that the two have been competing on short-haul routes for 20 years or so. "We have dramatically changed our revenue strategy and dramatically reengineered our business model to compete with the best of the rest [of the] low-cost carriers," he said. "Almost 80% of our selling activity is now online and we want to grow it well beyond that and probably close to 90% within the next 12 months."
Ryanair (RYR) sent a comprehensive letter to all Aer Lingus (ARL) shareholders urging them to approve the (LCC)'s €2.80/$3.70-per-share takeover bid before a December 22 deadline. Ryanair (RYR) investors voted overwhelmingly to back the takeover at an extraordinary general meeting of shareholders.
The (LCC) appears to be making a last push to convince (ARL) shareholders to accept its offer, which it said is "generous" and will not be increased. The letter from Ryanair (RYR) CEO, Michael O'Leary asserted that (ARL) management is incapable of driving down costs and operating the airline profitably, repeatedly pointing to a "recent decline" in financial performance and passenger numbers. In contrast, he said, Ryainair (RYR) would "lower fares, lower fuel surcharges [and develop] a better long-haul product, better service delivery, [operate] cheaper airplanes and significantly lower costs."
Later, Ryanair (RYR) shelved, at least temporarily, its plan to acquire Aer Lingus (ARL), following the European Commission (EC)'s decision to refer its hostile €1.48 billion/$1.95 billion takeover offer to a Phase II inves tigation, which can take 3 to 5 months.
The (LCC) said that owing to the (EU) regulatory investigation, its offer automatically lapsed under takeover rules, yet it added that it intends to make a further offer for its smaller competitor if the (EC) clears the bid after its Phase II review. The offer was set to expire this month.
Ryanair (RYR) CEO, Michael O'Leary accused (EC) competition chiefs of bias against his carrier. He noted that the same authority approved a merger between Air France (AFA) and (KLM) after less scrutiny and with fewer remedies.
"The (EC) appears to be applying different and totally inconsistent principles to the Ryanair (RYR) - Aer Lingus (ARL) deal than it applied to the much larger Air France (AFA) - (KLM) deal, which was waved through with little difficulty in Phase I," O'Leary said. He noted (AFA) and (KLM) offered to give up just over 120 slots at their main airports to secure Phase I clearance, whereas Ryanair (RYR) had offered to surrender "over four times more [over 500] of the combined Ryanair (RYR)/Aer Lingus (ARL) slots, including valuable slots at London Heathrow (LHR)."
O'Leary said the (LCC) will continue to work closely with the (EC) to assist it in its review of the potential merger, "which is in line with the European Commission (EC)'s stated aim of encouraging consolidation amongst European airlines."
In the long-haul sector, Aer Lingus (ARL) remains a full-service airline and stands to benefit significantly from transatlantic liberalization. Mannion pointed out that Dublin and Shannon are the only two airports in Europe offering pre-clearance through USA customs and immigration.
Starting March 27th, Dublin - Santiago de Compostela, 2/week, using A320s. Starting May 29th, Dublin - Vilnius, 3/week.
January 2007: Aer Lingus (ARL) carried 8.6 million passengers in 2006, up +7.3% year-over-year, as it added new routes and +11.6% more seats. Passenger numbers grew +9.3% on short-haul flights, and fell -4.4% on long-haul flights. Load factor dropped -3.8 points to 77.6% LF, including a -5.8-point decline on long-haul services.
Aer Lingus (ARL) could be facing industrial action after CEO, Dermot Mannion warned in a letter to union employees that they must accept new work rules, because the airline is facing "commercial challenges and threats that are unprecedented in the history of the company."
In the letter, widely reported by the Irish press, Mannion stated that (ARL)'s costs are out of line compared to its competitors in "some critical areas," adding, "Given our significant growth and expansion plans, this is no longer sustainable."
The new rules, which include fewer holidays and reduced overtime pay, will apply to new staff from February 1st and to existing staff from March 1. (ARL)'s two largest unions, (SIPTU) and Impact, said they will ballot staff for industrial action, up to and including strike action, if management seeks to impose the changes without consultation.
Aer Lingus (ARL) management reportedly said it will "address the issues by all available alternative means" if unions reject the changes. Employees are said to believe this means the airline will cut jobs and outsource certain operations unless the new work rules are accepted.
February 2007: The European Commission (EC) extended until June 13th, its deadline to rule on Ryanair (RYR)'s €1.48 billion/$1.94 billion hostile bid for Aer Lingus (ARL), both the (EC) and Ryanair (RYR) confirmed, although neither offered a reason for the 20-day extension. The regulator set an initial deadline of May 11 to investigate worries, that the acquisition would raise "serious competition concerns." The Low Cost Carrier (LCC) reiterated its confidence that the transaction will be cleared, "as it is a pro-competitive and pro-consumer deal which will bring lower fares, greater efficiency, new airplanes and more choice for consumers around Europe." It reportedly plans to revive its bid if it meets with (EC) approval. It also dismissed completely a report claiming CEO, Michael O'Leary is considering an increase in Ryanair (RYR)'s offer to a possible €3.10 per share.
JetBlue Airways (JBL) confirmed that the airline is committed to launching an online partnership with Aer Lingus (ARL), under which the carriers will make their combined networks available to customers visiting their respective websites. The exact nature of the tie-up, which will be unique among low-fare airlines, has not been determined, and eventually may include a booking facility or interline agreement. Aer Lingus (ARL), which will exit the Oneworld alliance on April 1, serves JetBlue (JBL)'s New York (JFK) base, as well as Boston.
JetBlue (JBL) said (ARL) prompted the negotiations as part of its effort to remodel itself as a low-fare carrier. Aer Lingus (ARL) said 71% of its customers book through its website. "Their business model is very similar to ours. They have truly transformed from the old school to the new school of airlines," JetBlue (JBL) said. Aer Lingus (ARL) CEO, Dermot Mannion told reporters in Dublin the partnership, which would "significantly extend Aer Lingus (ARL)'s reach into North America," could take effect by late summer, Reuters reported.
Oneworld confirmed that Royal Jordanian (RJA), Japan Airlines (JAL)/(JAS), and Malev Hungarian Airlines (HGA) will join the alliance as full members on April 1. Five additional subsidiaries of JAL Group (JAL)/(JAS) will join the same day as affiliates: JALways (JAI), Japan Asia Airways (JAA), JAL Express (JEX), J-AIR and Japan Transocean Air (SWL). At the same time, Aer Lingus (ARL) will withdraw from the alliance. Three other airlines are lining up to join as affiliates in 2007: Dragonair (DRG), LAN Argentina (LNR), and LAN Ecuador (LNE). The membership changes will expand Oneworld's reach to almost 700 airports, nearly 150 countries and 9,000 daily departures by around 2,500 airplanes.
Aer Lingus (ARL) will launch thrice-weekly, Dublin - Vilnius flights in May, and twice-weekly Dublin - Santiago de Compostela service in March.
SIPTU union members voted by an "overwhelming majority" for industrial action against Aer Lingus (ARL), the union said, citing management's announcement that it would alter agreed-upon work rules in order to remain competitive. SIPTU, which represents approximately 1,800 (ARL) employees, did not detail the nature or extent of the actions under consideration. "Management waited until they had secured employee shareholder support for the defense against the Ryanair (RYR) bid, before announcing their proposals to reduce terms and conditions of employment for both new and existing staff," the union said. "The reductions cover the whole spectrum of employment conditions such as pay, grading, annual leave, overtime and shift premiums."
March 2007: A tumultuous year that featured an Initial Public Offer (IPO), an attempted takeover by Ryanair (RYR) and an announced withdrawal from Oneworld ended on a down note for Aer Lingus (ARL) as a lengthy list of exceptional items resulted in a -€69.9 million/- $91.9 million full-year loss compared to a 2005 profit of +€88.9 million. An +11.3% rise in revenue to €1.12 billion and a +12.9% climb in costs to €1.04 billion had a slight effect on (ARL)'s operating result, reducing its profit to +€76 million from the +€81.4 million earned the year before. But a charge of -€104 million related to creation of a fund designed to pay inflationary increases in pensions, a €17 million payment to the Employee Share Ownership Trust related to the carrier's IPO and the €16.2 million spent to fend off Ryanair (RYR)'s hostile bid had disastrous effects on the bottom line. CEO, Dermot Mannion said that "2006 has been a year of fundamental change" and the carrier's fortunes will improve in 2007. "In addition to our continuing focus on cost reduction in 2007, following a period of static capacity, we are investing in our long-haul fleet, enabling us to expand our transatlantic services," he said. He added that last year's "underlying operating profits . . . were better than expectations at the time of the (IPO)," which raised €400 million. (ARL) said it plans to add six airplanes this year, and will place a long-haul order "shortly."
The airline flew 13.36 billion (RPK)s passenger traffic last year, a +6.4% year-over-year increase, against an +11.6% climb in (ASK)s capacity to 17.23 billion. Load factor dipped -3.8 points to 77.6% LF, but the average short-haul fare rose +3.9% to €90.99 and long-haul fare lifted +6.9% to €280.90. Unit cost, excluding fuel, fell -3.2% to €0.042. Ancillary revenue was ahead +34% to €63.4 million.
"The first quarter for 2007 is seeing solid traffic flows, albeit with some pressure on yields," (ARL) said. "Our outlook for the full year 2007 in operating profit terms is in line with market expectations at the time of the (IPO), as Aer Lingus (ARL) continues to benefit from its profitable growth strategy as well as continued strong performance in the sale of ancillary products."
April 2007: Aer Lingus (ARL) flew 1.12 billion (RPK)s passenger traffic in March, a +9.5% increase from the year-ago month. Capacity was up +12.9% to 1.48 billion (ASK)s, dropping load factor -2.3 points to 75.5% LF.
Aer Lingus (ARL) will charge passengers who wish to pre-book a specific seat on short-haul flights starting April 4. Customers will pay €3/$4 to choose their seat online. From the end of May, passengers also will have the option to reserve a seat in the first five rows for €10 and in an exit row for €15. Seat selection at check-in will remain free of charge.
May 2007: Starts Dublin - Vilnius, using A320s. Starting June 5th, Dublin - Athens, using A320s. Starting September 3rd, Dublin - Washington (IAD), using A330-200s. Starting October 28th, Dublin - San Francisco, using A330-200s. Starting October 30th, Dublin- Orlando, using A330-200s.
The European Commission (EC) extended its investigation into Ryanair (RYR)'s proposed acquisition of Aer Lingus (ARL) Group by another 15 working days to July 4 from June 13, itself an extension from the original deadline of May 11. The extension followed Ryanair (RYR)'s submission of new commitments to address competition concerns raised by the European regulator. An (EC) spokesperson confirmed that the Low Cost Carrier (LCC) (RYR) offered extra remedies. Ryanair (RYR) launched a €1.48 billion/$2.01 billion hostile takeover bid for Aer Lingus (ARL) soon after the flag carrier completed its Initial Public Offering (IPO) last September. The (LCC) (RYR) withdrew its bid in December, after the (EC) launched its in-depth inquiry citing "serious competition concerns" over the proposed merger of Ireland's two principal airlines. Ryanair (RYR) said in February it hoped to renew its bid, when the probe was completed. It holds 25.2% of (ARL), just under the Irish Finance Ministry's 25.35%.
Conversely, the (EC) opted to clear the proposed merger of Thomas Cook (JMA) and MyTravel (GUE)/(PRH) Group, which will combine to form Thomas Cook (JMA)/(GUE)/(PRH) Group. The tie-up remains subject to several conditions, including approval from MyTravel (GUE)/(PRH) shareholders, court consent and the listing of (JMA)/(GUE)/(PRH)shares. Assuming they are satisfied, finalization is expected on June 19, the companies said in a statement.
Regarding the agreed-upon acquisition of First Choice (ATZ) Holidays by TUI (HAP)/(HLX), the (EC) expressed concern over the combined company's potential dominance in Ireland. Following last week's meeting with the Competition Case Team, First Choice (ATZ) agreed to consider specific undertakings to address that concern, including the potential sale of one of its Irish businesses. "First Choice (ATZ) and TUI AG (HAP)/(HLX) remain confident that the proposed merger will be cleared by the European Commission (EC)," the companies said, adding that they now expect the (EC) to announce its decision on whether to clear the proposed merger at Phase I, or extend it to a Phase II investigation on or before June 4. Both the combined TUI Travel (ATZ)/(HAP)/(HLX) and the Thomas Cook (JMA)/(GUE)/(PRH) Group will be headquartered in London.
Aer Lingus (ARL), as the national airline of Ireland, operates domestic and international, passenger and cargo, jet airplane services to more than >75 destinations throughout Europe and to 4 USA cities, in addition to Dubai in the Middle East.
Employees = 3,556.
(IATA) Code: EI - 053. (ICAO) Code: EIN - SHAMROCK.
Parent organization/shareholders: Government of Republic of Ireland (28.29%); Ryanair (RYR) (25%); Free Float (28.82%); ESOT (9.9%); employees (3.4%); Irish AirlinePilots Pensions (2.27%); & Denis O'Brien (2.1%).
Shareholdings: Futura International Airways (FUA) (20%).
Alliances: OneWorld (ONW); & (KLM).
Main Base: Dublin International airport (DUB).
Domestic, Scheduled Destinations: Cork; Dublin; & Shannon.
International, Scheduled Destinations: Alicante; Almeria; Amsterdam; Barcelona; Berlin; Birmingham; Bordeaux; Boston; Bristol; Brussels; Budapest; Chicago; Dusseldorf; Edinburgh; Faro; Frankfurt; Fuerteventura; Geneva; Glasgow; Hamburg; Krakow; Lanzarote; Las Palmas; Lisbon; Liverpool; London; Los Angeles; Lyon; Madrid; Malaga; Manchester; Milan; Munich; New York; Nice; Paris; Prague; Riga; Rome; Salzburg; Tenerife; Venice; Vienna; Warsaw; & Zurich.
Aer Lingus (ARL) flies to and from nearly 70 destinations across Ireland, the UK, Continental Europe, the United States and the Middle East:
North America: Boston, Chicago, New York (JFK), Los Angeles,
San Francisco*, Orlando*, & Washington*
Middle East: Dubai.
North America: Boston, Chicago, & New York (JFK).
(Some routes operate seasonally)
United Kingdom: London Heathrow, Birmingham, Bristol, Edinburgh, Glasgow, Manchester, Newcastle, & Jersey.
Austria: Vienna, & Salzburg.
Canary Islands: Tenerife, Lanzarote, Las Palmas, & Fuerteventura.
Channel Islands: Jersey.
Czech Republic: Prague.
France: Paris, Bordeaux, Lyon, Marseille, Nice, Rennes, & Toulouse.
Germany: Berlin, Dusseldorf, Frankfurt, Hamburg, & Munich.
Italy: Rome, Bologna, Milan, Naples, Turin, & Venice.
The Netherlands: Amsterdam.
Poland: Warsaw, Krakow, & Poznan.
Portugal: Lisbon, Faro, & Funchal.*
Spain: Madrid, Alicante, Almeria, Barcelona, Bilbao, Malaga, Palma, Seville, & Santiago de Compostela.
Switzerland: Zurich, & Geneva.
United Kingdom: London Heathrow, Birmingham, & Manchester.
Canary Islands: Lanzarote, & Tenerife.
Czech Republic: Prague.
France: Paris, & Nice.
Germany: Berlin, & Munich.
The Netherlands: Amsterdam.
Spain: Madrid, Alicante, Barcelona, & Malaga.
United Kingdom: London Heathrow.
*New Routes for 2007:
Dublin to Vilnius, Lithuania - commencing May 2007.
Dublin to Athens, Greece - commencing June 2007.
Dublin to Washington Dulles, USA - commencing August 2007.
Dublin to San Francisco, USA - commencing October 2007.
Dublin to Orlando, USA - commencing October 2007.
Dublin to Copenhagen, Denmark - commencing October 2007.
Dublin to Helsinki, Finland - commencing October 2007.
Dublin to Bucharest, Romania - commencing October 2007.
Dublin to Funchal, Portugal - commencing October 2007.
Dublin to Agadir, Morocco - commencing November 2007.
A320-214s (3129, EI-DVE "St Aideen/Etacin"), (ILF) leased, (3136, EI-DVF "St Jarlath/Iarfglaith"), AerCap (DEA) leased, and A330-202 (841, EI-DUO "St Columba/Colum"), deliveries.
June 2007: Aer Lingus (ARL) Group placed an order for six A330-300Es and six A350 XWBs, with deliveries commencing in 2009 and running though 2014.
The carrier also holds the option to purchase a further six A350s for delivery by 2018 as part of an order valued at $2.4 billion at catalog prices. It noted in a stock exchange filing that "substantial discounts off the catalog prices have been negotiated." The transaction is subject to shareholder approval.
"These airplanes are key to our growth ambitions which include new routes to the USA following the "Open Skies" agreement. The airplanes will complement our existing Airbus (EDS) fleet and enhance our long-haul network," CEO, Dermot Mannion commented. (ARL) already has announced plans to serve Washington Dulles, San Francisco and Orlando International before year end.
The airline operates an all-Airbus fleet, comprising 30 A320 family airplanes and eight A330-200s/-300s. It started expanding its long-haul fleet this year with the May delivery of a new (CF6)-powered A330-200. A new A330-300 is scheduled for delivery this month. This order will lift the long-haul fleet to 14 in 2014 through five deliveries, and the replacement of one older airplane in 2009 and two in 2011. A further four will be replaced in 2015 and 2016.
"In addition, over the next few years Aer Lingus (ARL) will be substantially improving the levels of passenger comfort in its existing airplanes in an upgrade program," the carrier said.
Finally at the end of this month, in what clearly can be called an unprecedented decision, the European Commission (EC) did move to prohibit the proposed takeover by Ryanair (RYR) of smaller rival Aer Lingus (ARL). The (EC) said a merger would harm consumers by creating a monopoly on 22 routes, and a dominant position with a market share of more than >60% on a further 13. "Monopolies are bad for consumers, because they reduce choice, lower quality and give rise to higher prices. Low-cost carriers (LCC)s like Ryanair (RYR) are no exception to this rule," Competition Commissioner, Neelie Kroes said. The (EC) confirmed it is not in a legal position to require Ryanair (RYR) to divest its minority shareholding in (ARL).
This marks the first time that the (EC), which publicly advocates airline consolidation, has vetoed a combination in the (EU). It cleared the merger of Air France (AFA) with (KLM), and the acquisition of Swiss International Air Lines (CSR) by Lufthansa (DLH). It did not intervene in the tie-ups between SN Brussels (DAT) and Virgin Express (EBA) or between (TAP) Portugal and PGA Portugalia Airlines (POR). In the early 1990s, it okayed the merger of (AFA), (UTA) and Air Inter, and always has granted antitrust immunity to alliances or route-specific joint ventures.
Kroes acknowledged that precedent, but argued that this merger presented unique issues because Ireland's two main airlines operate from the same home airport of Dublin. "That fact has led to an unprecedented number of routes where competition would have been harmed, affecting a significantly higher number of European passengers than in any other case in the past," she said at a news conference in Brussels. She would not confirm Ryanair (RYR), CEO Michael O'Leary's claim that no competitors filed objections to the proposed merger. The (EC) said most airlines were unlikely to enter into direct competition against a merged Ryanair (RYR)/Aer Lingus (ARL) in Ireland, in part because the (LCC) "has a reputation of aggressive retaliation against any entry attempt by competitors." It added that "the likelihood of entry is further reduced by peak-time congestion at Dublin Airport and other airports on overlap routes."
Kroes said she is confident the (EC)'s decision will "bear scrutiny of the Court of First Instance should it be appealed." Ryanair (RYR) confirmed that it will appeal, and declared that "this prohibition will be overturned."
A330-301 (847, EI-DUZ "St Aoife/Aoife"), delivery.
July 2007: Touting the success of last year's €400 million/$544.6 million Initial Public Offering (IPO), Aer Lingus (ARL) said it remains on track for "mid-teen operating profit growth" for full-year 2007. Operating profit in 2006 was +€76 million, reduced from +€81.4 million the year before. Speaking at the company's annual general meeting (AGM), Chairman, John Sharman said the (IPO) proceeds are "facilitating the purchase of both growth and replacement short-haul and long-haul airplanes and the ongoing development of new routes." The carrier has taken delivery of an A330-200 and an A330-300 this summer and announced its intention to buy six additional A330-300s and six A350 XWBs. Sharman said the 12 airplanes will be purchased at "significant discounts."
(ARL) plans to boost capacity by +14.6% in 2007, including +19% on long-haul routes. Sharman said two key issues will affect that growth: Operating costs and airport capacity. He said the airline's focus on cost reduction will be "relentless," adding, "We have made significant progress in reducing costs but a legacy of inappropriate work practices and inefficiencies remains." He also called for "additional capacity" at "highly congested" Dublin Airport.
Aer Lingus (ARL) said it will launch four-times-daily Dublin - London Gatwick service "from the end of October." It already serves London Heathrow.
August 2007: Aer Lingus (ARL) launched four-times-weekly Dublin - Washington Dulles (IAD) service. (IAD) is (ARL)'s fifth USA destination. It plans to begin serving Orlando International and San Francisco from October.
Aer Lingus (ARL) will establish its first base outside the Republic of Ireland in December, when it will base three A320s at Belfast International Airport, and launch the first three of eight new routes.
Among the new services will be 21-times-weekly flights to London Heathrow beginning January 14, which will mark the end of (ARL)'s service to the UK capital from Shannon. "In the current climate, Aer Lingus (ARL) believes the Belfast (BFS) - London Heathrow services present an accelerated growth opportunity, using its available fleet and slot resources," the carrier said, adding that the new base could provide up to 1 million passengers annually. It will invest €150 million/$207.1 million in the project. CEO, Dermot Mannion said (BFS) "offer[s] 24/7, all-weather operations and long runways capable of accommodating all current and future Aer Lingus (ARL) development potential."
Other new routes from (BFS) will be 14-times-weekly to Amsterdam, five-times-weekly to Barcelona, and twice-weekly to Geneva from December 10; four-times-weekly to Rome Fiumicino, thrice-weekly to Budapest, four-times-weekly to Malaga, and thrice-weekly to Faro from February 25.
Irish media were reporting that up to -50 job losses are expected at Shannon as a result of the move.
Aer Lingus (ARL)'s decision to open a base in Belfast, and transfer its Shannon (SNN) - London Heathrow (LHR) service to Northern Ireland, met with predictable opposition in the western part of the Republic, as well as from Ryanair (RYR), which holds 25% of the flag carrier and has appealed to Prime Minister, Bertie Ahern to maintain the status quo. The (LCC), whose effort to acquire (ARL) was rebuffed by the European Commission (EC) in June, said the government's approval of the Belfast switch "proves that both Aer Lingus (ARL) and the Irish government lied to the European Commission (EC)." It presented a portion of the Minister of Transport's October 2006 statement, that said the government "is unlikely to support a proposed disposal of any [(LHR) - (SNN)] slot pair" as (LHR) "serves a unique role in ensuring connectivity to/from Ireland." "If the Irish government wants to preserve connections between Shannon (SNN) and Heathrow (LHR), then Ryanair (RYR)'s offer will allow this to come about," CEO, Michael O'Leary said, adding that both (ARL) and the government "assured the [EC], that an independent Aer Lingus (ARL) was the only way to maintain competition and choice, between Aer Lingus (ARL) and Ryanair (RYR). This sacrifice of Shannon (SNN) in favor of Belfast, reduces that competition."
Later, Aer Lingus (ARL) pilots (FC) indicated they were planning a two-day strike to protest the carrier's plan to set up a base at Belfast International Airport (BFS), where the Impact Trade Union claims the proposals for pay and work rules "are less favorable" than in the Republic. (ARL) confirmed that Impact gave formal notice of a 48-hour stoppage scheduled to begin just after midnight on August 21 and that subsequent strikes will be organized. Impact stressed it will not allow (ARL) "to treat its Belfast-based pilots as second-class citizens, who can be paid less and treated worse than their colleagues in Dublin." The airline said it intends to recruit approximately 30 pilots (FC) locally at a starting salary of £72,000/$145,300, which CEO, Dermot Mannion said is "very much in line" with rates south of the border, "Bloomberg News" reported. "What we are trying to do is to have terms and conditions appropriate to the local market," he told the news service.
Aer Lingus (ARL) said it "hopes to operate a limited schedule of European flights" during a two-day pilot (FC) strike called in protest of its decision to open a Belfast base. The airline said it has agreed to wet-lease "a number" of airplanes for August 21 to 22.
(ARL)'s plans to open a base at (BFS), its first outside the Republic, and shift flights to London Heathrow (LHR), north from Shannon (SNN) has stirred considerable emotion among Irish labor, politicians and other stakeholders. While the Labor Party already has announced it will bring a motion against the decision in parliament, Ryanair (RYR) seized on the opportunity to announce it will operate three additional daily flights from Shannon to London-area airports if (ARL) moves forward with its plan to end (SNN) - (LHR) service by January 14. The (LCC), which holds 25% of (ARL), said it also requested an extraordinary general meeting "to allow Aer Lingus (ARL) shareholders the opportunity to exercise their statutory right to [ask the (ARL) board] to reverse the Shannon closer decision."
The Irish government apparently will not intervene in Aer Lingus (ARL)'s decision to open a base in Belfast and transfer flights to London Heathrow from Shannon to Northern Ireland, despite pleas from officials with ties to Western Ireland. In a statement by the Prime Minister's office, the Minister for Education & Science, Mary Hanafin said the government is "particularly disappointed" in (ARL)'s decision, but that "as a listed plc, Aer Lingus (ARL) has to take it own decisions. It is inappropriate for the government to intervene in the decision-making of a private company. To do so would ultimately be damaging to the company and its customers." Hanafin added that the government remains "committed to ensuring the connectivity of Shannon."
The Minister for Defence, Willie O'Dea, who represents Limerick East near (SNN), was one of a few key officials who spoke out against the move, saying that the government "should do all it can to get this decision reversed," according to "Bloomberg News."
Meanwhile, (ARL) CEO, Dermot Mannion said the carrier is sticking with its plan despite the pilots strike. "We are a publicly quoted company. We do have an obligation to make tough commercial decisions in terms of how we allocate our available slots," he said in broadcast remarks. (ARL) announced that it will operate no scheduled flights during the two-day strike and advised passengers to avoid booking new travel through August 26. It will offer a limited European program Tuesday and Wednesday with "a number" of wet-leased airplanes, comprising flights from (LHR) to Dublin, Shannon and Cork, plus services from the Irish capital to Manchester, Amsterdam, Malaga, Faro, Milan Malpensa and Dusseldorf.
At the last minute, Aer Lingus (ARL) pilots (FC) called off a two-day strike after the carrier and the Irish Air Line Pilots Assn (IALPA) agreed to commence talks through Ireland's Labour Relations Commission on pay and conditions at (ARL)'s new Belfast base. "We welcome the decision of (IALPA) to suspend the planned strike action," the airline said in a short statement. (ARL) resumed its full transatlantic schedule, but said its Dublin - New York (JFK) flight and a later Dublin - Chicago O'Hare service would remain cancelled.
The "Irish Times" reported that Ryanair (RYR) increased its stake in (ARL) to 28% from 25% for €37.6 million/$50.4 million. The (LCC) declined comment on "any market speculation."
Aer Lingus (ARL) said it had an underlying profit of +€6.8 million in the first six months of 2007, a -58% decline from +€16.3 million in the year-ago period. Under International Financial Reporting Standards (IFRS), that the carrier adopted in conjunction with last year's Initial Public Offering (IPO), however, first-half 2006 income totaled +€3.6 million. It noted that current-period results include an exceptional charge of €7.8 million related to Ryanair (RYR)'s unsuccessful takeover bid. Revenue rose +12.9% to €574 million, with ancillary revenues jumping +68.6% to €50.4 million. Measured against this, was a +11% lift in expenses to €573.1 million, including €1.6 million in employee profit-sharing. Operating profit before profit-sharing was +€2.6 million, compared to an operating profit +€10.6 million in 2006, or an operating loss of -€8.1 million, if results are restated to (IFRS). "Aer Lingus (ARL) delivered a solid financial performance in the first six months of 2007," commented CEO, Dermot Mannion, who added that the result was achieved "in a keenly competitive marketplace."
(ARL) carried 4.4 million passengers in the first half, up +5.9% and contributing to a +10.5% rise in passenger revenue. (RPK)s passenger traffic rose +5.8% to 6.7 billion, but capacity (ASK)s climbed +8.3% to 8.9 million, and load factor dropped -1.8 points to 75.3% LF.
While not reflected in its first-half performance, (ARL) will suffer an estimated -€3.5 million loss as a result of this month's threatened two-day pilot (FC) strike, which ultimately was called off. "The company and [the Irish Airline Pilots Assn] are working under the auspices of the Labour Relations Commission to seek a resolution of this dispute," Mannion said, referring the pilots' dissatisfaction with (ARL)'s plans for hiring at its new Belfast base.
September 2007: Aer Lingus (ARL) said it will "assist" the European Commission (EC) in upholding the decision to block its takeover by Ryanair (RYR), arguing competition "would suffer" if the merger of Ireland's two largest airlines was allowed. Ryanair (RYR) has appealed the (EC)'s decision disallowing the takeover; Aer Lingus (ARL) said it has "no doubt" its rival's appeal "will fail."
October 2007: Aer Lingus (ARL) and British Airways (BAB) signed a codeshare agreement covering all (ARL) flights between its new Belfast (BFS) base and London Heathrow (LHR). (ARL) will launch thrice-daily, (BFS) - (LHR) service on January 14, and add a fourth daily flight at the end of March.
Aer Lingus (ARL), saying it is in "a regrettable position where we have no option," imposed an immediate pay freeze on all staff, citing labor unions' rejection of its "Program for Continuous Improvement" cost-saving initiative. Until it can implement the program, (ARL) said it is forced to withhold a series of promised raises. CEO, Dermot Mannion said, "Aer Lingus (ARL) cannot continue to wait indefinitely to achieve essential savings. It is within this context, that the decision to suspend, increases has been taken." He said the carrier is open to talks with unions "at the earliest possible date."
Aer Lingus (ARL) asked the European Commission (EC) to consider ordering Ryanair (RYR) to reduce its stake, both (ARL) and the (EC) confirmed. According to "MarketWatch," (ARL) accused the (EC) of failing to act within the (EU) merger regulations, by allowing Ryanair (RYR) to keep its sizable stake in Aer Lingus (ARL), despite its failed merger attempt. Director General Competition spokesperson Jonathan Todd said (EU) competition authorities received the notice about failure to act two weeks ago, and would respond by October 17.
In June, the (EC) prohibited the proposed takeover by Ryanair (RYR) of its smaller rival, arguing the merger would harm consumers by creating a near-monopoly in the Irish market. While supporting the decision, Competition Commissioner, Neelie Kroes stated the (EC) was not in position to require Ryanair (RYR) to divest its then-25% shareholding. Ryanair (RYR) since has built up a 29.4% stake and early last month submitted its appeal against the (EC)'s veto to the European Court of First Instance. It also called for an extraordinary general meeting of shareholders following (ARL)'s decision to transfer slots to London Heathrow from its current base at Shannon to a new base in Belfast. (ARL) twice rejected the request, arguing that to do so would result in an infringement of Irish and European competition law.
Aer Lingus (ARL) CEO, Dermot Mannion warned in a letter to pilots (FC) that those who "fail to confirm your willingness to unreservedly engage in your full range of duties" related to (ARL)'s new Belfast base, will be suspended from the payroll from the morning of October 16.
Later, Aer Lingus (ARL) CEO, Dermot Mannion announced that the airline reached an agreement with pilots (FC) over issues concerning the opening of (ARL)'s Belfast base, and that "the threat of disruption of services this week has been lifted." Mannion had threatened to suspend noncompliant pilots (FC). (ARL) said the base will open on time with "staff employed on local terms and conditions" and that the agreement with the Irish Air Line Pilots Assn "provides a framework for the opening of future bases on local terms and conditions."
November 2007: Aer Lingus (ARL) said it will add three new airplanes and expand capacity by +10% across its European network in 2008, including the addition of new Belfast International - Nice (twice-weekly), Dublin - Ibiza, and Cork - Jersey services. It plans to operate 59 routes from Dublin, 18 from Cork and nine from Belfast next year. Frequencies across the network will be raised, including on flights to San Francisco, Orlando International, and Washington Dulles.
The Aer Lingus (ARL) Group lodged a formal appeal with the European Union (EU) Court of First Instance in Luxembourg, as part of what it called "the legal process towards removing Ryanair (RYR) from its shareholder register." Last month, the European Commission (EC) said it does not have the legal authority to order Ryanair (RYR) to sell off or reduce its shareholding in (ARL) because it holds only a minority stake and does not have effective control. Aer Lingus (ARL), however, believes the merger regulation does give the (EC) that power, as the stake was part of the original takeover attempt that the regulatory body prohibited. Aer Lingus (ARL) also asked the court, "as a matter of urgency, to make an order to prevent Ryanair (RYR) from interfering in the running of Aer Lingus (ARL)'s business pending judgment."
Ryanair (RYR) dismissed the (ARL) announcement. "The European Commission (EC) has already confirmed that since Ryanair (RYR) has neither de facto nor de jure control over Aer Lingus (ARL), there are no legal grounds for such a compulsory disposal," it said in a statement. (RYR) currently holds 29.4% of its smaller rival.
Aer Lingus (ARL) said it signed a contract with Airbus (EDS) for six A330-300Es and six A350-900 XWBs. The order was announced in June. (ARL) also holds six A350 XWB options.
A320-214 (3318, EI-DWG), delivery.
December 2007: Aer Lingus (ARL) flew 1.21 billion (RPK)s passenger traffic in November, up +17.4% over the year-ago month. Capacity rose +23.3% to 1.65 billion (ASK)s, and load factor fell -3.7 points to 73.4% LF.
Aer Lingus (ARL) launched operations at its new Belfast International base with three A320s and flights to Amsterdam and Barcelona. Service to Geneva has begun, to London Heathrow on January 14, and to five more European destinations "before the spring," (ARL) said. It expects to transport 500,000 passengers during the first year of operations.
Peter O'Neill, Operations Director. Stephen Kavanaugh, Corporate Planning Director. Enda Corneille, Corporate Affairs Director. David Manifold, Deputy Finance Director.
A320-214 (3345, EI-DVH), delivery.
January 2008: Aer Lingus (ARL) flew 1.11 billion (RPK)s passenger traffic in December, up +14.8% from the year-ago month. Capacity climbed +22.7% to 1.63 billion (ASK)s, cutting load factor -4.6 points to 68% LF.
2007 statistics: 14.81 billion (RPK)s passenger traffic +10.8%; +14% capacity (ASK)s; -2.1 load factor for 75.4% LF. SEE ATTACHED COMPARISON CHART TO SELECTED OPERATORS - "ARL-2007-STATS."
Aer Lingus (ARL) selected lastminute.com to provide hotel accommodation for its passengers through aerlingus.com or aerlingushotels.com.
Aer Lingus (ARL) launched thrice-daily, Belfast International - London Heathrow service aboard an A320. It is (ARL)'s fourth route from its new base, from which it will start flights to Rome Fiumicino, Budapest, Malaga, and Faro on February 25, and Nice on April 1.
February 2008: Aer Lingus (ARL) flew 1.07 billion (RPK)s passenger traffic in January, a +16.4% increase over the year-ago month. Capacity climbed +25.9% to 1.67 billion (ASK)s, lowering load factor -5.2 points to 64% LF.
JetBlue Airways (JBL) and Aer Lingus (ARL) unveiled details of their strategic partnership, nearly one year after the alliance initially was revealed. The tie-up will take effect April 3 and will feature a booking engine on (ARL)'s website, that will allow customers to purchase tickets on (ARL) flights to the USA and JetBlue (JBL) services from New York (JFK) in one transaction. (ARL) will have a transfer desk in the arrivals lobby of (JFK)'s Terminal 4, where passengers can check in and drop their luggage upon clearing customs. Those flying to Ireland will be able to check their bags through from their initial USA departure point. "Our partnership with Aer Lingus (ARL) is a perfect fit with our brand and culture and we are thrilled to extend our network," JetBlue (JBL) CEO, Dave Barger said. (ARL) CEO, Dermot Mannion said, "We are proud to be pioneering the model of linking low-fare networks."
Aer Lingus (ARL) exercised its rights under a 2003 agreement with Airbus (EDS) to purchase four A320s. While the airplanes are valued at $56.7 million each, the carrier said it had "obtained certain price concessions from Airbus (EDS)."
March 2008: Aer Lingus (ARL) flew 1.07 billion (RPK)s passenger traffic in February, a +16.3% increase over the year-ago month, against a +30.7% capacity increase to 1.61 billion (ASK)s. Load factor fell -8.3 points to 66.7% LF.
Aer Lingus (ARL) did well in its first full year as a privatized company, with a net profit of +€105.3 million/+$161.8 million compared to a net loss of -€69.9 million in 2006. Revenue rose +15.2% to €1.28 billion on a +7.8% growth in passengers to 9.3 million. Operating costs increased +15.1% to €1.19 billion, primarily owing to greater volumes and higher oil prices. Fuel cost jumped +26.3% on an underlying basis to €253.3 million. Operating profit before employee profit share came in at +€88.5 million, up +16.4% from +€76 million a year earlier. "2007 was a year of further progress for Aer Lingus (ARL) and the group's first full year trading as a quoted company. We continued to grow the network, drive up ancillary revenues while at the same time reduce unit costs. Despite soaring oil prices and an increasingly competitive marketplace, operating profits remained strong in 2007 and were better than expectations," CEO, Dermot Mannion said.
(ARL) opened a new base in Northern Ireland and added 14 new European routes and three to the USA. It also expanded its Airbus (EDS) fleet from 35 airplanes to 41. Passenger traffic (RPK)s grew +10.8% to 14.8 billion against a +14% rise in capacity to 19.6 billion (ASK)s. Load factor fell -2.2 points to 75.4% LF. Unit cost, excluding fuel, declined -1.2% to €4.19 cents.
Aer Lingus (ARL) and Jet-Blue Airways (JBL) are launching their new web-based partnership - SEE ATTACHED ARTICLE - "ARL-JBL-MAR08" AND "ARL-PLANS-MAR08."
April 2008: Aer Lingus (ARL) and United Airlines (UAL) signed a codeshare agreement under which (ARL) will place its code on (UAL) flights departing from all seven of (ARL)'s USA gateways, while (UAL) will add its code to (ARL)'s transatlantic flights to/from Dublin and Shannon. The agreement takes effect November 1, pending USA government approval.
Aer Lingus (ARL) confirmed a June order for six A350 XWB-900s and six A330-300s following receipt of shareholder approval for the purchase. Ryanair (RYR), which holds 29% of (ARL), voted against the acquisition and had insisted on a renegotiation or cancellation of the contract, saying it was negotiated at an all-time high in the last airplane value cycle. "We would strongly urge your board and management . . . to take advantage of the recent market downturn and the significant reduction in airplane prices, to secure these same airplanes at significantly lower prices," Ryanair (RYR) said in a letter to the (ARL) board. A330 deliveries are scheduled to begin next year, with all airplanes arriving by 2015. "The A350-900 fits well into our ambitious plans to expand existing routes and to open up new ones from our hub in Dublin. The new airplanes will fit in seamlessly with our all-Airbus (EDS) fleet," (ARL) CEO, Dermot Mannion said. The contract brings total firm orders for the A350 to 362 from 22 customers, Airbus (EDS) noted.
Sabena Technics (SAB) signed a 10-year base maintenance contract with Aer Lingus (ARL) to perform "C" checks and structural checks on its A320 family and A330 airplanes.
May 2008: Aer Lingus (ARL) flew 1.38 billion (RPK)s passenger traffic in April, up +9.3% on the year-ago month. Capacity climbed +25.7% to 1.95 billion (ASK)s, and load factor dropped -10.6 points to 70.5% LF.
Aer Lingus (ARL) appointed Finance Director, Greg O'Sullivan to group Company Secretary, replacing Laurence Gourley, who becomes Head of Legal Affairs.
Aer Lingus (ARL) will increase its checked baggage fee on short-haul flights effective May 8. The cost for airport check-in will rise to €18/$27.84 from €12, and online check-in will go to €12 from €9. (ARL) does not charge baggage fees on long-haul services.
June 2008: Aer Lingus (ARL) flew 1.53 billion (RPK)s traffic in May, up +18.7% from the year-ago month. Capacity rose +25.3% to 2.01 billion (ASK)s, dropping load factor -4.2 points to 76.1% LF.
Aer Lingus (ARL) said it will reduce its long-haul capacity by -15% for the 2008 to 2009 winter season, owing to "unprecedented" fuel costs, the weak USA dollar, and a slowing economy. The carrier conceded that based on current fuel prices and the uncertain economic outlook, it expects "at best" to break even for 2008. The reduction will include suspension of its five-times-weekly Dublin - Los Angeles service from November 2. It also decided to take two A330s out of service in 2009, when it takes delivery of two new A330s, keeping the fleet to nine rather than expanding to 11 as had been planned.
Aer Lingus (ARL)'s short-haul winter schedule includes a new twice-weekly, Dublin (DUB) - Sofia, extension of summer (DUB) - Hamburg to year-round, and the relaunch of winter service to Salzburg, Agadir, and Newcastle. Expansion brings (ARL)'s (DUB) network to 50 routes. In addition, it will increase frequencies to Paris Charles De Gaulle, Dusseldorf, Warsaw, Bucharest, Geneva, Milan (it flies to both Malpensa and Linate), Barcelona, Malaga, Lisbon, and Manchester. It recently announced a -15% reduction in winter long-haul capacity.
Dublin Airport Authority awarded Siemens a €40 million/$63 million contract to design and build a baggage handling system for Dublin Airport's new passenger terminal T2. The project is scheduled to open in spring 2010. (DUB)'s €395 million T2 will be capable of handling up to 15 million passengers per year.
Aer Arann and Aer Lingus (ARL) will interline on the former's five-times-daily flights between Cork and Dublin and the latter's USA services.
Aer Lingus (ARL) named Ryanair (RYR) Director Scheduled Revenue, Sean Coyle as its new CFO. He will join (ARL) on August 11.
A320-214 (3501, EI-DVI), delivery.
July 2008: Aer Lingus (ARL) flew 1.62 billion (RPK)s traffic in June, up +12.4% on the year-ago month. Capacity rose +13.3% to 1.98 billion (ASK)s, dropping load factor -0.7 point to 81.5% LF.
Ryanair (RYR) announced the acquisition of 3.5 million ordinary shares in Aer Lingus (ARL) worth €175,000/$275,919, lifting its stake in (ARL) to 29.82%.
Dublin Airport was operating at 80% capacity following days of disruptions owing to a fault in the radar system. "The cause of the problem with the Air Traffic Control (ATC) system has been identified and a comprehensive system evaluation process by the suppliers, Thales (THL) ATM, is ongoing," the Irish Aviation Authority (IAA) said in a statement. "In the interest of safety, the (IAA) will continue to take an incremental approach towards operating the system at normal capacity."
Lufthansa Technik (DLH) (LTK) signed a 10-year deal with Aer Lingus (ARL) to provide component support for 34 A320s and nine A330s. The contract volume likely will exceed >€90 million/$143 million. Services will be coordinated by an (LTK) representative in Dublin and launch November 1.
August 2008: Aer Lingus (ARL) flew 1.72 billion (RPK)s traffic in July, up +8.1% from the year-ago month. Capacity rose +8.9% to 2.06 billion (ASK)s, and load factor fell -0.7 point to 83.3% LF.
Citing unprecedented fuel costs, slowing economic growth in its main markets, and weakness in the USA dollar and UK pound, Aer Lingus (ARL) reported a net loss of -€20.6 million/-$30.3 million for the first half of 2008, reversed from a +€6.8 million/+$11 million profit in the year-ago semester. Revenue rose +10.2% year-on-year to €633 million, while operating costs increased +14.6% to €655.2 million, with fuel costs soaring +48.7% to €172.4 million, in spite of hedging savings and dollar weakness. Fuel represented 26.3% of total costs in the period, up +6 points. Operating loss was -€22.3 million, reversing a profit of +€2.6 million in the first half of 2007. "Even with the reduction in fuel prices over the last few weeks, competitive pressure on fares and volumes will continue and we are at best expected to break even in the second half, delivering a loss for the full year," Chief Executive, Dermot Mannion said, adding that (ARL) will continue to develop new revenue partnerships and initiatives such as those with United Airlines (UAL) and JetBlue Airways (JBL). He also conceded that "it is now clear that we will require further fundamental changes in our operating cost base in order to minimize losses in 2009 and to help ensure the long-term viability of the business."
First-half passenger numbers grew +10.5% to 4.4 million, comprising a +9.5% increase on long-haul and a +10.6% lift on short-haul. Average fare fell -2.6% to €110.43. Load factor lost -5.1 points to 70.2% LF, with a -10.2-point decrease on its long-haul network to 67.7% LF, and a -1.4-point drop on short-haul routes to 72.2% LF. Long-haul traffic (RPK)s rose +14.5% against a +31.4% gain in (ASK)s, while short-haul traffic grew +16.5% on a +18.8% capacity hike.
Aer Lingus (ARL), which had a good 2007, now finds itself in a financial hole that’s getting deeper.
Aer Lingus (ARL) will abandon its Dublin - Copenhagen on November 1.
Aer Lingus (ARL) welcomed Sean Coyle, ex-RyanAir (RYR) as CFO. The Aer Lingus (ARL) Group appointed Babcock and Brown Air (BBB) CEO, Colm Barrington as Chairman, succeeding John Sharman, effective next month. Barrington currently is a nonexecutive director of the Dublin Airport Authority, from which he will resign before taking over at (ARL).
September 2008: Aer Lingus (ARL) flew 1.68 billion (RPK)s traffic in August, up +8.8% from the year-ago month. Capacity rose +10.3% to 2.08 billion (ASK)s, and load factor was down -1.2 points to 80.5% LF.
October 2008: Aer Lingus (ARL) will add nine new routes from Ireland to the UK and Europe in its 2009 summer schedule: Dublin to Catania, Sofia, and Newcastle; Cork to Lanzarote, Lisbon, and Rennes; Belfast International to Milan, Munich, and Lanzarote. (ARL) also will increase frequencies on 17 existing routes.
Aer Lingus (ARL) said that it will "proceed with a cost-reduction program to deliver . . . substantial savings," adding that "fundamental change" is needed to keep the carrier "competitive" going forward. Meetings are planned to detail the cost-cutting plan to (ARL)'s labor unions. The (SIPTU) union, representing more than >1,500 ground workers, voiced "total opposition to outsourcing any part of the Aer Lingus (ARL) operation." (ARL) reportedly has approached labor groups about outsourcing ground handling operations.
It is unclear what measures the carrier will take. It declined to provide any details or state how much money needs to be saved. Irish media reported that it is seeking to slash costs by -€100 million/-$139.1 million annually. "Given the extremely challenging revenue environment, the board is committed to delivering these cost savings as a matter of urgency," the airline said in a statement. (ARL) reported a net loss of -€20.6 million for the first half of 2008, and projected a full-year loss.
Aer Lingus (ARL) intends to cut up to -1,500 jobs as part of an effort to save -€74 million/-$101.8 million, it announced following meetings with unions, according to widespread press reports. (ARL)
management its intention to follow through with the cost-reduction program, saying it sought "fundamental change." The carrier said it will lower its payroll by -€50 million, cut an additional -€14 million from distribution, marketing and other activities, and realize -€10 million in savings from a reduction in long-haul services. Cabin crew (CA) bases at Shannon and London Heathrow will be closed, while some North American flights (New York (JFK), Boston and San Francisco) will be cut or served with USA-based crew, beginning next summer. All ground operations at Dublin will be outsourced and those at Cork will be reduced. Those employees who remain will have their pay frozen until the end of next year, and given new contracts tying wages to performance. (ARL) intends to implement the plan by November 1.
An Impact union spokesperson told "The Irish News" that the measures are "draconian and severe" and said it will be consulting with members, while the (SIPTU) told the (BBC) it will ballot members for "all-out" industrial action and that (ARL)'s cuts "represent a fire sale of good quality jobs by a management, that can see no further than the next quarter's profit and loss sheet."
November 2008: Aer Lingus (ARL) said its full-year operating loss will be "closer" to the lower end of the projected -€20 to -€30 million/-$25.7 to -$38.5 million range forecast previously, but that it expects another operating loss in 2009. The operating loss through the first half of 2008 was -€22.3 million. It said the Irish Airport Travel Tax of €10 per departing passenger expected to be introduced on March 30, will have a -€30 million negative impact on its bottom line as it absorbs the duty on 75% of bookings. It said nine-month revenue rose +8.5% year-over-year (figure not disclosed) on a +9.7% increase in passenger numbers to 7.7 million. Winter schedule capacity will fall -11% on long-haul and -1% on short-haul and it will reduce its long-haul fleet by one airplane to eight for the summer 2009 schedule.
Regarding its previously announced cost reduction program, (ARL) said it "has engaged with unions in order to seek alternative cost reduction proposals," but that in the "absence of alternatives" it will proceed with the approved plans "required to ensure the group's long-term viability as an independent airline" beginning December 1.
Aer Lingus (ARL) employees at Dublin, Cork and Shannon represented by the (SIPTU) union voted "overwhelmingly" to take industrial action before December 1 in response to (ARL)'s proposal to cut -1,245 full-time-equivalent positions. Ireland Minister for Transport, Noel Dempsey called on the two sides to restart talks, according to Irish media.
December 2008: Aer Lingus (ARL) said that a "sufficient" number of (SIPTU) employees accepted voluntary leave at Dublin, Cork, and Shannon to deliver the carrier's targeted savings of -€25 million/-$31.7 million, which also will include work rule and pay changes accepted by the union. (ARL) CEO, Dermot Mannion said the restructuring "will provide an excellent platform for growth at each base in the future."
(ARL) cabin crew represented by Impact voted in favor of the airline's cost-cutting proposals by a 59% to 41% margin. Approximately 150 cabin staff (CA) will lose their jobs - - 94 at Dublin, Cork, and Shannon (SNN) combined, and an extra 60 at (SNN), according to press reports. The (SIPTU) union accepted a similar deal involving ground staff. (ARL) CEO, Dermot Mannion said the labor deals will allow the carrier to "recalibrate" its budget for 2009 and that it now expects to "come out with a much better figure . . . than anything that is currently there." (ARL) is facing another takeover bid from Ryanair (RYR).
(RYR) officially presented its €1.40/$1.87 per share offer to (ARL) investors, giving them until January 5 to decide whether to create "one leading, financially strong, Irish-run airline group." The offered share price represents a €748 million offer, a premium of approximately 28% over the average closing price for the 30 days ended November 28 (the last business day prior to (RYR)'s announcement that it would launch a second bid for (ARL)) and a considerable drop from the €2.80 it offered two years ago. (RYR) guaranteed that (ARL) would stay a separate company and that both its brand and its slots and connectivity at London Heathrow (LHR) would remain. It plans to double (ARL)'s short-haul fleet over the next five years to 66 airplanes, creating 1,000 new jobs.
It also promised the (ARL) Chairman a seat on the (RYR) board and said the Irish government - - which (RYR) said has "no realistic alternative" - - would receive €188 million in cash while (ARL) staff and the employee stock ownership trust would gain +€137 million. (RYR) currently holds 29.8% of (ARL).
The Irish Takeover Panel blocked an effort by (RYR) to court governmental favor by offering it control of (ARL)'s (LHR) slots and two €100 million bank guarantees. In the document, (YR) said it would convene an extraordinary general meeting of (ARL) to propose a "special resolution" ensuring that the (LHR) slot holding "cannot be sold, transferred, leased, switched, surrendered, mortgaged . . . or otherwise disposed of by (ARL) or (RYR) . . . without the affirmative vote of both Houses of the Oireachtas." It said the bank guarantees, linked to a promise of a cut in short-haul fares and elimination of fuel surcharges, would go to charity. "Only (ARL) believes it has an independent future," (RYR) said, citing the sales and/or mergers of flag carriers from Austria, Belgium, Switzerland and the Netherlands and pending combinations in Italy, Spain and elsewhere. It also claimed that a tie-up with either Lufthansa (DLH), British Airways (BAB) or Air France (AFA)/(KLM) would "damage Ireland."
(ARL) responded with another rejection. Chairman, Colm Barrington said in a statement that the (RYR) document "contains nothing new" and was "the usual stream of invective, spin and misrepresentation that we expect from the people at (RYR)." He said it also "fails to address the recent (EU) prohibition decision which found emphatically that (RYR) wants to destroy consumer choice."
(ARL) will establish its first base in Great Britain in April at London Gatwick (LGW) with four A320s operating to Dublin, Knock, Malaga, Munich, Zurich, Nice, Faro, and Vienna. (ARL)'s only other base outside the Republic of Ireland is at Belfast International, which it opened one year ago. "The (LGW) operation will complement our existing services out of London Heathrow (LHR) and position (ARL) for growth as we roll out new routes and bases in future years," CEO, Dermot Mannion said. He added that (ARL) is "offering consumers flights to top European business and leisure destinations at convenient times and competitive fares as part of a superior offering that sets us apart from our rivals." (ARL), which is trying to fend off a second takeover attempt from investor and arch-rival (RYR), expects to expand to eight airplanes at (LGW) within a year with the potential for up to 2.5 million passengers annually. Investment will amount to £100 million/$154 million in the first year. It said 120 new jobs will be created through local recruitment of pilots (FC) and cabin crew (CA). (RYR) operates bases at London Stansted and Luton.
Meanwhile, (RYR) said it was "concerned" by comments from (ARL) regarding its trading performance and prospects following the launch of its recent takeover offer. (RYR) claimed that (ARL) was much more upbeat than in its interim management statement in November. "We, as a large shareholder, are concerned about some of these apparently contradictory claims and forecasts, and their impact upon (ARL)'s forecast post exceptional net profit (loss) after tax for 2008 and 2009," (RYR) CEO, Michael O'Leary said in a shareholder letter to (ARL) Chairman, Colm Barrington. In the letter, (RYR) asked (ARL) to clarify the exact cost reduction of its recently announced "transformational deal," to specify the cap (ARL) placed on the cost to defend itself against the (RYR) offer, and to confirm the current deficit in its defined benefit pension schemes. (RYR) also asked to know the revenue impact of (ARL)'s decision to eliminate long-haul fuel surcharges and the group's forecast post exceptional net profit (loss) after tax for both 2008 and 2009.
(ARL) will resume its Shannon (SNN) - London Heathrow (LHR) service with twice-daily flights beginning March 29. It closed the route in January but said recent cost-saving measures agreed to by (ARL) staff at (SNN), Cork, and Dublin, along with a "new deal" on charges with the Shannon Airport Authority and a fall in fuel prices, have prompted it to restart service. (RYR) made the restoration of (SNN) - (LHR) service a focus of its most recent bid for (ARL).
Datalex reached agreement with (ARL) to provide its Travel Distribution Platform offering "flexi" fare customer pricing and service options expected to enhance ancillary and merchandising business.
January 2009: Aer Lingus (ARL) flew 1.09 billion (RPK)s traffic in December, down -6% year-over-year, against a -4% fall in capacity to 1.57 billion (ASK)s. Load factor was down -1.5 points to 69.4% LF.
(RYR) extended to February 13 the deadline for (ARL) shareholders to accept its takeover offer while confirming that on the initial closing date of January 5 it had received acceptances totaling just 29.83% of the shares in (ARL), including its own stake of 29.82%. (RYR) also confirmed that it held a meeting with representatives of Tailwind Nominees Ltd, which owns approximately 2% of (ARL) on behalf of its pilots (FC). (RYR) did not reveal the meeting's result. It already had held similar discussions with (ARL)'s Employee Share Ownership Trust (which controls 14%) and the Irish government (25%).
In an update to shareholders, (ARL) said it now expects to report a profit for 2008 "despite an operating loss of approximately €20 million/$27.5 million." It also expects a profit this year, reversing its previous warning of a "significant loss." "The 2009 financial outcome includes the impact of lower net interest income and the benefits of the recently agreed cost reduction program and the significant reduction in fuel prices," (ARL) said. It expects "significantly higher cash balances resulting from a substantially better performance in 2009 than was anticipated in August and the positive impacts of funding arrangements available for the 2009 airplane deliveries, offset by one-off cash costs associated with the implementation of our cost reduction program."
(ARL) CEO, Dermot Mannion and CFO, Sean Coyle agreed to waive a controversial new clause in their contracts that provided for a €2.8 million/$3.8 million parachute payment for Mannion if they left (ARL) following its acquisition. (RYR), which has offered to buy its rival, claimed the payments proved that (ARL) did not foresee a future as an independent carrier. The amount of Coyle's prospective payment was unclear. "We have no hesitation in terminating this condition with immediate effect in order to focus our attention on defeating the unsolicited bid from (RYR)," the executives said in a joint statement. (RYR) CEO, Michael O'Leary told the "Associated Press" that the payment, "which did not have the support of the [ARL] board let alone the shareholders, was nothing less than an attempt to defraud the company and its shareholders."
(RYR) is willing to raise its offer for rival (ARL), though it warned it will not engage in a lengthy regulatory clearance process unless it receives significant support from (ARL) shareholders, including acceptance of the offer by either the Irish government or the Employee Shareholder Ownership Trust. Those entities control about 25% and 14% of (ARL) respectively. (RYR) extended its €1.40 per share offer to February 13 after receiving next to no acceptances from other (ERL) shareholders. It holds 29.82%.
(RYR) CEO, Michael O'Leary argued that the potential benefits of a merger "are compelling" but said, "We don't intend to waste our time or that of the Irish government or (EC) over the next six months if (ARL) shareholders do not want the only merger offer currently available to them to secure (ARL)'s future." He indicated (RYR) is willing to raise the offer price, yet insisted that no decision has been made and that it has "no intention of increasing our offer to a price of €2 or above. We are not stupid people and will not pay stupid prices."
(ARL) reiterated its belief that the offer is "diversionary and fatally flawed" and is "unlikely to be capable of completion" because (RYR) "has failed to disclose to (ARL) shareholders the nature of any new remedies that it believes will enable it to secure competition approval from the (EC). We believe this failure is unacceptable in the context of a bid that seeks to overturn a recent prohibition." It asked (RYR) to provide the details of any potential remedies and maintained it has a "vibrant future as an independent airline."
Later, the Irish government rejected (RYR)'s €1.40/$1.81-per-share offer for its 25% stake in (ARL), killing off (RYR)'s bid, which required 90% acceptance. (RYR) said it "will respect and abide by" the decision but continued to claim that its offer, which valued (ARL) at €748 million, "greatly exceeds the intrinsic value" of its smaller rival.
(ARL) and United Airlines (UAL) announced creation of a transatlantic partnership intended to "capitalize on the growth opportunities presented by the (EU)-USA "open skies" agreement . . . by opening new transatlantic nonstop services." The first joint route will be a daily, Madrid - Washington Dulles service scheduled to launch in March 2010. (ARL) and (UAL) said it is "intended" that they will share equally commercial and operating benefits and risks, with (ARL) managing operations and (UAL) managing revenue generation. Flights will be operated and sold under both codes. "Further expansion and development of the partnership's activities will be jointly assessed and agreed by the partners and may develop into a broader and deeper joint venture," they said in a joint statement. Additional routes may be added in summer 2011. The pair launched code share services between Ireland and the USA last October, which they said "are proving to be successful based on initial traffic performance."
Previously, (RYR) said it would be open to increasing the offer. Before the Irish government's announcement, (RYR) CEO, Michael O'Leary indicated that any boost would be small and would occur only if a significant number of shareholders signaled they would accept. (RYR) had until January 30 to amend the offer and (ARL) shareholders had until February 13 to accept, but (RYR) now has opted to move in a different direction after two failed bids.
O'Leary said it "will now focus all of our energies on continuing to successfully grow and develop Ireland's biggest airline and we will ensure that Ireland will still be home to one of Europe's big four airline groups," while (ARL) "will be isolated as a small, peripheral, loss-making airline." (RYR) claimed it will create +1,000 jobs in Ireland over the next five years.
February 2009: Aer Lingus (ARL) flew 1.01 billion (RPK)s traffic in January, down -5.6% year-over-year. Capacity fell -6.1% to 1.56 billion (ASK)s and load factor rose +0.3 point to 64.3% LF.
United Airlines (UAL) pilots (FC) represented by the Air Line Pilots Association and (ARL) pilots (FC) represented by the Irish Air Line Pilots Association announced a protocol agreement designed to "protect the interests" of pilots (FC) from both carriers ahead of the transatlantic partnership scheduled to take effect in March 2010. Pilots (FC) said the initial Washington Dulles - Madrid route will be operated under (ARL)'s certificate but will not be flown by neither (UAL) nor (ARL) crew (FC). "This partnership . . . will set a dangerous precedent regarding international air travel, where pilots (FC) on both sides of the Atlantic will pay a steep price," (UAL) (MEC) Chairman, Steve Wallach said.
2 A320-214s (3755, EI-EDS; 3781, EI-EDP), RBS Aerospace leased and A330-302 (985, EI-EAV), delivery.
March 2009: Aer Lingus (ARL) flew 992 million (RPK)s traffic in February, down -7.5% year-over-year. Capacity dropped -14.4% to 1.38 billion (ASK)s, lifting load factor +5.3 points to 72% LF.
(ARL) posted a 2008 net loss of -€107.8 million/-$136.7 million, a sharp reversal from the +€105.3 million earned the previous year, citing "exceptionally challenging trading conditions for the aviation industry as a whole." CEO, Dermot Mannion said, "Falling consumer demand in key markets, a weakening dollar and sterling, and increased competition across the network combined to put sustained and significant pressure on our business throughout the year."
Ryanair (RYR), which last year made an unsuccessful bid for its smaller competitor, called on (ARL) Chairman, Colm Barrington to apologize for "misleading" shareholders and the market when he claimed the carrier would earn a 2008 profit. (RYR) noted that in the document urging the Irish government to reject (RYR)'s offer bid, Barrington stated flatly, "(ARL) is and will be profitable." (RYR) CEO, Michael O'Leary said, "We intend to submit formal complaints to the London and Irish Stock Exchange, the Takeover Panel and the Financial Services Regulator about the patently false claims and misleading advice given by (ARL) to shareholders."
(ARL)'s 2008 revenue increased +5.6% to €1.36 billion while operating costs before employee profit sharing and net exceptional items lifted +14.9% to €1.37 billion. Operating loss after net exceptional items was -€159.5 million compared to an operating profit of +€82.2 million a year earlier.
Passenger load factor lost -2.6 points to 72.8% LF as (RPK)s rose +9.9% to 16.27 billion and capacity increased +13.9% to 22.37 billion (ASK)s. (ARL) conceded that its previous guidance for 2009 is no longer pertinent. "In the current climate, we believe that in 2009 (ARL) will experience a larger operating loss than in 2008 and that in these circumstances, the group is unlikely to meet its previous guidance of a pre-tax profit in 2009," it said.
A330-301 (070), returned to (ILF), 7 year leased to Vladivostok Air (VLK) as (VQ-BCW).
April 2009: Aer Lingus (ARL) flew 1.23 billion (RPK)s traffic in March, down -13.1% year-over-year, against a -13.5% fall in capacity to 1.63 billion (ASK)s. Load factor rose +0.3 point to 75.6% LF.
(ARL) said that its full-year loss "will be materially below the bottom of the range of current market expectations" and that it is reorganizing its senior management structure in order "to safeguard the long-term viability of the group," according to Chairman, Colm Barrington. (ARL) said six weeks ago that it expected its operating loss this year to be "larger" than the -€159.5 million/-$209.7 million posted in 2008. Dermot Mannion resigned as CEO this month.
(ARL)'s first-quarter revenue fell -16% year-over-year on a -6.5% drop in passenger numbers to 2.1 million and a -9.6% decrease in revenue per passenger. It said the "average fare trend" for the rest of the year "will be worse than previously expected." In response, it is "reviewing the sustainable shape and size of both the long-haul and short-haul businesses" in addition to its order for six A350-900s and six A330-300s.
Designed "to meet the new challenges of a deteriorating outlook," the management reshuffle comprises the appointment of Deputy CEO, Niall Walsh as COO; CFO, Sean Coyle's expanded role as Head Short-haul, Information Systems and e-Commerce Operations; and Corporate Planning Director, Stephen Kavanagh's expanded role as Head Long-haul, Cargo, Alliance & Resource Planning Operations. Recently, the (ARL) board named The Zygos Partnership of London as its adviser in a search for a new CEO.
During the first quarter, the average short-haul fare dropped -10.8% year-over-year, while the average long-haul fare was down -18.9%. Total yield decreased -14.5%. (ARL) held €593.6 million in net cash as of March 31.
JetBlue Airways (JBL) and (ARL) said bookings during the first year of their partnership exceeded targets by +50% and that (JBL) was able to connect more than >80 passengers a day from Ireland. The deal allows customers in both the USA and Ireland to book a single connecting fare on (ARL)'s website and provides for baggage transfer. It originally involved connections between Dublin and Shannon, New York (JFK) and 25 (JBL) onward destinations but now includes flights via Boston as well. (ARL) CEO, Dermot Mannion said the companies will "continue to grow and develop new opportunities."
Dermot Mannion's eventful tenure as (ARL) CEO, which featured privatization, two successful defenses against a Ryanair (RYR) takeover and a reversal in fiscal fortunes leading to a -€107.8 million/-$145.3 million loss last year, ended with his resignation after 3.5 years on the job. "It has been a privilege . . . to have led the company through a period of profound change," Mannion said in a statement. "My decision to step down will allow a new CEO to bring fresh thinking and new ideas to the business."
(ARL) said Chairman, Colm Barrington will assume Mannion's duties until a replacement is appointed. "Against the backdrop of challenging market conditions, the board and management team are focused on maximizing revenues, reducing operating costs while maintaining a strong balance sheet to deliver value for all shareholders."
(ARL) has its work cut out following a poor 2008 performance. (RYR) called on Barrington to resign over claims he made during (RYR)'s takeover bid that (ARL) would be profitable, and Mannion was forced to waive a potential €2.8 million parachute payment (in case he left following (ARL)'s acquisition) owing to negative publicity.
(RYR), which holds 29.8% of (ARL), upped its rhetoric, claiming that the fact Mannion was the 10th CEO in the past 16 years is "the product of a dysfunctional board which has repeatedly prevented management from running the airline in the interests of its shareholders." CEO, Michael O'Leary, who last month said he regretted his investment in the flag carrier, said (ARL) "will continue to make large losses" this year.
The Irish Airlines Superannuation Scheme (IASS), the pension fund for Aer Lingus (ARL) and the Dublin Airport Authority (DAA) employees, is likely to suffer a €628 million/$830.8 million shortfall, according to a (SIPTU) report cited by "The Independent." The union called the shortfall "an extremely challenging vista that must the addressed" and called on (ARL) and the (DAA) to set aside funds from cash reserves to "secure the viability" of the scheme. (ARL)'s and the (DAA)'s combined net cash balance is nearly €1.4 billion, (SIPTU) said. It also noted that Ryanair (RYR) was the only major investment that made money for the (IASS) last year.
A320-214 (3857, EI-DVJ), RBS Aerospace leased.
May 2009: A330-202 (330), returned to (ILF).
SEE ATTACHED "FLIGHT INTERNATIONAL" ARTICLE - - "ARL-NEWS-MAY09."
June 2009: Aer Lingus (ARL) flew 1.47 billion (RPK)s traffic in May, down -3.8% year-over-year. Capacity fell -0.6% to 2 billion (ASK)s, lowering load factor -2.4 points to 73.7% LF.
(ARL) is "facing the most difficult period in its 73-year history," Chairman, Colm Barrington told shareholders at the company's annual general meeting (AGM) in Dublin, conceding that yields in all its markets continued to decline in April and May. "The trading environment and outlook remain highly uncertain and it is not possible to accurately forecast demand and yield for the remainder of 2009 and beyond," he stated, declining to provide any financial guidance. (ARL) reported in late April that yield fell -14.5% year-over-year in the first quarter.
(ARL), which reported a consolidated net loss of -€107.8 million/-$152.8 million in 2008, in April announced a reorganization of its management "in order to safeguard the long-term viability of the group" and a review of its short-haul and long-haul businesses. The board and management are "finalizing" the fundamental evaluation, Barrington said, confirming that (ARL) already has agreed to early termination of one A330 lease and is working with Airbus (EDS) to reduce near-term fleet commitments. He also announced it will add a fifth airplane at its new and "growing" London Gatwick base.
He said (ARL) is not seeking a "white knight" buyer for the moment, "but we are certainly talking to various people in the market about various things," according to "Reuters."
Ryanair (RYR), which is (ARL)'s largest minority shareholder with a 29.8% stake, said it "regrets" the rejection by (ARL)'s board of two resolutions proposed at the (AGM) to reduce fees paid to the nonexecutive directors and Chairman. "This perhaps explains why (ARL) continues to lurch from crisis to crisis, losing passengers, losing money and burning through the cash that shareholders provided to (ARL) at its September 2006 Initial Public Offering (IPO)," it stated.
(ARL) said it has offered pilots (FC) and cabin crew (CA) unpaid leave, will cut long-haul winter seat capacity by about -25% for 2009 to 2010 compared to the 2008 to 2009 winter and also will trim short-haul capacity at Belfast and Dublin while adding frequencies and routes at Shannon and London Gatwick. The actions follow the review of all operations announced at the end of April and "will help safeguard the long-term viability of the group and represent an important first step in the right-sizing of our business," Chairman, Colm Barrington said.
(ARL) will suspend flights from Dublin to Washington Dulles and San Francisco from October 25 as well as flights between Shannon (SNN) and Chicago O'Hare from September 1. The four-times weekly service between (SNN) and New York (JFK) remains under "close review" and could be maintained because Delta Air Lines (DAL) will terminate its service on the route. The long-haul capacity reduction is being facilitated by the early termination of a leased A330, (ARL) said.
Short-haul capacity changes include reductions from 24 airplanes to 22 for the winter period at Dublin, and from three to two at Belfast (BFS). A fifth airplane has been added to its new London Gatwick (LGW) base and an A320 will be based at (SNN) effective October 25 to "facilitate an increase in the Shannon - London Heathrow (LHR) services to three per day and is subject to confirmation of slots."
In August 2007, (ARL) withdrew its (SNN) - (LHR) services and transferred its (LHR) slots to its base at Belfast, which caused a storm of public dissent including from shareholder and rival Ryanair (RYR). It resumed a twice-daily service on the route at the end of March.
A330-302 (1025, EI-EDY), delivery.
July 2009: Aer Lingus (ARL) flew 1.6 billion (RPK)s traffic in June, a -0.7% decline year-over-year. Capacity dipped -0.5% to 1.97 billion (ASK)s and load factor slipped -0.2 points to 81.3% LF.
(ARL) named Christoph Mueller, CEO, replacing Dermot Mannion, who stepped down in April. Mueller, 47, most recently served as TUI Travel (TUG)'s Aviation Director, a position that gave him responsibility for the company's seven airlines. He joined TUI in early 2006. Prior to that, he was DHL Worldwide's CFO and a member of Duetsche Post's executive committee. (ARL) said he also has held senior positions with Daimler Benz Aerospace, Lufthansa (DLH), and Sabena (SAB).
He will take over the position on Oct. 1, ending a period of more than five months in which Chairman Colm Barrington assumed most of the CEO duties (ATWOnline, April 7). Barrington said Mueller has a "proven track record within the aviation industry" and was selected following a "thorough and rigorous recruitment process."
August 2009: Aer Lingus (ARL) flew 1.72 billion (RPK)s traffic in July, up +0.2% year-over-year, against a +1.5% increase in capacity to 2.09 billion (ASK)s. Load factor fell -1 point to 82.3% LF.
Warning that it expects a "continuation of the current market trends," (ARL) reported a -€73.9 million/-$105.5 million loss in the first semester of 2009, widened more than threefold from the -€21.6 million lost in the year-ago period. "While traffic volumes have stabilized, average fare yields continue to be significantly down year-on-year. Forward visibility on revenue expectations remains poor. Therefore, ongoing significant cost reduction remains critical to manage through the difficult market environment," (ARL) said, adding that "there has been a structural change in fares and in demand for our long-haul business class (C) product in particular."
Half-year revenue fell -12.2% to €555 million against a -1.1% decline in costs to €648 million. Operating loss deepened to -€93 million from -€23.4 million in the first six months of 2008. Passenger numbers rose +1.7% to 4.9 million but average fare plunged -17.1% to €91.36. "The scale of the operating loss clearly illustrates the extent of the challenges facing (ARL)," Chairman, Colm Barrington said. "We see no sign of any improvement in the near term."
(ARL) launched a cost reduction program last December that it said will produce savings of €65 million this year. It plans to cut winter schedule capacity on short-haul routes from Dublin by -14% year-over-year and on its long-haul network by -24%.
During the January - June period, (ARL) flew 7.58 billion (RPK)s traffic, down -2.6% year-over-year, against a -5.9% cut in capacity to 10.44 billion (ASK)s. Load factor rose +2.4 points to 72.6% LF. It cancelled service on seven routes and reduced frequencies on 24 others. Christoph Mueller is set to take over as CEO next week.
The Aer Lingus Group reached agreement with Airbus (EDS) on deferred delivery of its new long-haul airplanes and terminated lease agreements on two A330s ahead of schedule. One leased A330 will leave the fleet in October, 18 months ahead of schedule, and the second will depart next March, 14 months ahead of schedule. (ARL) already has returned two leased A330s this year and now plans to operate eight long-haul airplanes until 2013.
(ARL) placed an order in June 2007 for six A330-300Es and six A350s with A330 deliveries scheduled for 2009 through 2011 and the A350s in 2014 through 2015. It took purchase rights on a further six A350s for delivery by 2018. Under the agreement, which (ARL) said was negotiated "at no additional cost," it will take delivery of one new A330-300 as planned next April. It already has taken two new A330s this year. The fourth now will arrive in the 2013 third quarter, the fifth in the 2013 fourth quarter and the sixth in the 2014 first quarter. The first two A350s now are scheduled to arrive in the first half of 2015, with the remainder being added through the first half of 2016. One of its eight current long-haul airplanes will be dedicated to its new venture with United Airlines (UAL) on the Washington Dulles - Madrid route.
September 2009: Aer Lingus (ARL) announced the purchase of 5.6 million of its ordinary shares from the Employee Benefit Trust for just over >€280,000/$401,300. The shares were cancelled.
(ARL) named former Bank of Ireland executive, Michael Grealy as Director Human Resources & Organizational Change, effective September 28.
(ARL) may stop operating its loss-making routes to the USA, especially those from Shannon, and transfer them to a third party or code share partner as part of initiatives to address its long-haul deficits, according to Irish press reports. (ARL) CEO, Christoph Mueller stated that he appreciates the "national importance" of the carrier's American routes but said his airline is "not a charity," suggesting that the Shannon (SNN) - New York (JFK) route has survived only because of pressure from the Irish government, IrishCentral reported. In July, (ARL) confirmed it would reduce long-haul capacity by -24% this winter and suspend service from Dublin to Washington Dulles and San Francisco from October 25 until March 2010 and (SNN) - Chicago O'Hare on September 1. (ARL) confirmed only that it will release its newest cost restructuring plan in the coming weeks.
An (ARL) source confirmed that (ARL)'s ambitious cost-cutting plan is targeting "every single part of the company," especially its long-haul operations. (ARL) announced significant capacity cuts on its transatlantic network in June but has suffered further declines in bookings along with a "huge" decrease in business class (C) traffic. "Taking major costs out is the only option," according to the source, who confirmed that (ARL)'s long-haul operation, despite comprising just a handful of routes, represents up to two-thirds of its operating losses.
Analysts are forecasting a full-year operating deficit of -€120 to -€150 million/-$177.5 to -$221.8 million, which (ARL) has not denied.
Additional adjustments may include suspension of its loss-making Shannon - New York (JFK) service, allowing (ARL) to concentrate on Dublin. The source indicated that the fate of (ARL) likely rests on successful achievement of the targeted cuts, confirming off-the-record comments from CEO, Christophe Mueller that (ARL) has a 50% chance of survival.
(ARL) is refusing to bridge a €350 million pension shortfall in the Irish Airlines Superannuation Scheme, which is expected to provoke industrial action before year end. "If the company is not prepared to consider resolving this in a fair manner, it is fair to say there will be calls for industrial action," (SIPTU) Civil Aviation Sectoral Organizer, Dermot O'Loughlin told the "Irish Independent." "This is one of the highest deficits seen in a scheme so far and (ARL) doesn't seem to realize the consequences of saying it will not contribute anything more." (ARL) reportedly said it is not required to increase its contributions.
October 2009: Aer Lingus (ARL) flew 1.44 billion (RPK)s traffic in September, down -4.5% year-over-year. Capacity was down -7.6% to 1.85 billion (ASK)s and load factor rose +2.5 points to 77.5% LF.
Ryanair (RYR) said there is "no substance" to a "Financial Times" report claiming that it could take control of Aer Lingus (ARL) if (ARL) launched a rights issue. (RYR) is currently (ARL)'s largest shareholder with a stake of just under <30%. "Our position on (ARL) was recently confirmed at the (RYR) Annual General Meeting (AGM), which is that we are 'highly unlikely' to make a third offer," CEO, Michael O'Leary said, adding that (ARL) "would now be profitable, growing and creating new jobs" if the Irish government had accepted either of (RYR)'s two previous offers.
(ARL) revealed a two-phase "transformational" restructuring plan to reduce annual operating costs excluding fuel by -€97 million/-$142.7 million before the end of 2011 and remove "legacy work" practices from its operation. (ARL) also will use an Airline Operating Certificate (AOC) in the UK to decrease its current dependency on the Irish consumer. Phase one of the plan will target operational cost reductions and changes in work practices in both the short-haul and long-haul networks, though the bulk of cuts/reforms will fall on long-haul operations. The second stage of the plan will focus on a series of initiatives to deliver revenue growth, improved customer service and further cost savings through business process improvements.
"The outlook in each of our current core markets is poor and, in line with the macroeconomic outlook, we do not expect any near-term recovery," CEO, Christoph Mueller said. "Against this backdrop, (ARL) cannot continue with an operating cost base which is structurally uncompetitive when compared to that of its closest peers."
About €74 million in cost savings will come from its workforce through a reduced head count, cuts in pay for employees whose basic pay exceeds €35,000 annually and reduced variable pay and staff allowances. Another €23 million will come from nonstaff cost savings. Its workforce numbering 3,879 will be reduced by 676, cuts that are in addition to the approximately -100 staff reductions announced last month. (ARL) said it hopes the redundancies will be achieved on a voluntary basis or through releasing fixed-term staff at the end of their contract period, but warned that it "reserves the right to reduce staff numbers on a compulsory basis if agreement on changes with staff cannot be reached. In addition, if it is not possible to deliver the required cost savings in line with the plan, and within the required time frame, it may be necessary to reduce staff numbers further in order to ensure the continued viability of (ARL)."
(ARL) said passengers carried rose +4.1% year-over-year in September to 960,000 despite a -20.4% decrease in long-haul passengers. Short-haul passengers lifted +7.4%.
(RYR) called on the Irish government to explain why it rejected its December 2008 offer for Aer Lingus (ARL) that it maintains would have led to the doubling of (ARL)'s short-haul fleet and created +1,000 new jobs over a five-year period. The request followed the announcement by (ARL) of its restructuring plan that seeks to reduce annual operating costs excluding fuel by -€97 million/-$142.7 million) before the end of 2011 and cut its workforce by -17%. (RYR) CEO, Michael O'Leary asserted that if (ARL) keeps cutting costs and fails to grow, the government eventually will be asked to bail out the former state carrier. Meanwhile, United Airlines (UAL) said it will move forward with its planned transatlantic partnership with (ARL) even as (ARL) is preoccupied with cutting costs.
Ireland's three main carriers again called on the government to remove the €10/$14.80 tourist tax added to airline tickets on April 1. In a joint statement, (RYR) CEO, Michael O'Leary, (ARL) CEO, Christoph Mueller, and CityJet CEO, Geoffrey O'Byrne-White said the tax has had a "devastating impact on traffic and visitor numbers at Ireland's airports" since it was introduced, including a -15% decline in monthly throughput at Dublin (DUB). They predict passenger numbers at (DUB) may fall from 24 million to approximately 21 million this year owing to the tax.
November 2009: Aer Lingus (ARL) flew 1.32 billion (RPK)s traffic in October, down -8.9% year-over-year, against a -10.4% cut in capacity to 1.77 billion (ASK)s. Load factor rose +1.3 points to 74.6% LF.
(ARL)'s third-quarter revenue fell -9.7% year-over-year on a -17.6% drop in average fare, it announced, adding that it has launched the "first phase" of a restructuring aimed at "reducing any costs within our control so that we can cope with continued falling fares, compete and maintain balance sheet strength."
The ailing airline was -€73.9 million/-$109.7 million in the red through the half-year and announced a comprehensive "Transformation Plan" last month designed to save -€74 million in staff costs and -€23 million in non-staff costs per year. (ARL) said that the plan's first stage "has commenced" and that (ARL) management expects to conclude its consultation with union representatives. Productivity enhancements and "changes in . . . pension arrangements" are being discussed, (ARL) said.
Third-quarter passenger numbers rose +7% to 3.1 million, comprising a +10% increase on short-haul routes and a -13.2% drop on the long-haul network. Average revenue per passenger was down -14.8% as the average short-haul fare dropped -12.3% and long-haul fares plunged -17%. The decline was buffered slightly by a +8.5% increase in ancillary revenue per passenger. Short-haul capacity rose +10.5% year-over-year, long-haul was down -18% and overall load factor gained +1.3 points to 80.4% LF.
(ARL) announced A330/A350 deferrals and lease terminations over the summer and said an October (RFI) for sale or sale/leaseback deals "on a number of its airplanes" has generated "a significant number of expressions of interest."
It said that while year-over-year yield decrease continues, "the pace of decline in average fares does not appear to be accelerating currently," although it sees "further expected (GDP) declines and unemployment increases in our major markets." With that bleak outlook in mind, British Airways (BAB) CEO and former (ARL) CEO, Willie Walsh last month said (ARL) may need to merge to survive, but that its current ownership structure makes it "difficult to attract investors."
In a speech in Limerick, Walsh was quoted as saying, "Given what has happened to the economy here and given the way (ARL) has struggled in recent times, you could now make an argument that its future as an independent carrier is not that secure and maybe (ARL) does need to look at a relationship with some other carrier or a number of other carriers . . . With Ryanair (RYR) a significant shareholder at 30% and the Irish government with 25%, plus the Employee Share Ownership Trust with 15%, I struggle to see how anyone would invest or would want to invest with that sort of structure." Walsh said he always found it "a challenge" to understand why (RYR) would want to control (ARL), arguing that "there are serious competition issues and there is a very significant overlap between (ARL) and (RYR) and the competition regulators will always struggle with that. I wouldn't say a (RYR)-(ARL) merger is impossible, but it would be very difficult." (RYR) has said it is "highly unlikely" to make another offer for full control.
The Irish unemployment rate is now 13%, which is the second highest in western Europe after Spain.
December 2009: Aer Lingus (ARL) flew 1.08 billion (RPK)s traffic in November, down -6.4% year-over-year. Capacity dropped -4.7% to 1.51 billion (ASK)s and load factor slipped -1.3 points to 71% LF.
(ARL) will "resort to other measures" in its pursuit of its required cost savings, with capacity reductions and immediate and "compulsory" redundancies in the pipeline, CEO, Christoph Mueller said after negotiations with several unions broke down. "We have narrowed the gap with most union groups . . . and this has brought us very close to signature with them," Mueller said, adding that the Irish Airline Pilots Association (IALPA) and, "to a lesser extent," cabin crew (CA) represented by Impact are the exception. (IALPA) offered "only temporary savings over a short few years" and "asked for very high compensation in return," he said. Although a "majority" of (ARL) staff "understands [the need] for significant and urgent change," (ARL) said it now will "take whatever actions are necessary to stabilize the business" in the absence of an agreement.
(ARL) announced a €97 million/$146 million savings program in October and launched the "first phase" last month, when it announced a -9.7% year-over-year drop in third-quarter revenue and a -17.6% decline in average fare. Now, "in the absence of real cost savings being delivered from all employee groups," it said it will "have to resort to other measures." (ARL) will "move to" eliminate additional loss-making routes, resulting in operation of fewer airplanes and requiring a manpower reduction "beyond those included in the [October] Transformation Plan." (ARL) did not specify which routes or airplanes will be cut. The number of redundancies could exceed -1,000, according to press reports.
Mueller said he "remain[s] confident that (ARL) can pursue an independent future," but Impact was not nearly as optimistic. The union called (ARL)'s decision "radical and severe" and said its proposal includes a "significant" number of job cuts it called "deeply unfair and devastating." It said (ARL) has "returned to staff repeatedly looking for savings" over the past eight years and Impact members delivered €15 million in the spring. "As we predicted then, (ARL) has come back looking for more with no regard to existing agreements."
Impact Assistant General Secretary, Christina Carney told "RTE Radio" that employees wanted a stake in (ARL) in exchange for concessions. "If [workers are] investing in (ARL) by contributing money in terms of pay cuts or productivity, I think there should be recognition for that investment," she said. (IALPA) had not commented.
(ARL) announced the resignation of CFO & Head of Short-haul Operations, Sean Coyle. He will leave (ARL) at year end. Meanwhile, CEO, Christoph Mueller warned that the airline remains at risk of a Ryanair (RYR) takeover. He told "The Financial Times," "If (ARL) isn't capable of mastering its own destiny, then of course the likelihood that some form of non-independence might occur is more likely." (RYR) is permitted to make a third bid for (ARL) after late January. "I know that it is the desire of all our employees to stay independent and that is the reason I feel obliged to do everything I possibly can to reach an agreement with the unions," he said. "One group of employees [pilots (FC)] is resisting and bringing (ARL) closer to a situation where we might lose our independence."
(ARL) named Rentokil Initial CFO, Andrew Macfarlane as interim CFO. Former CFO, Sean Coyle resigned recently.
Swissport International signed a five-year deal with (ARL) to manage cargo handling at 10 European airports.
January 2010: Aer Lingus (ARL) flew 1.07 billion (RPK)s traffic in December, down -1.4% year-over-year, against a -4.9% cut in capacity to 1.49 billion (ASK)s. Load factor rose +2.5 points to 71.9% LF.
(ARL) warned that it expects market conditions will remain "extremely challenging" in 2010 and that full-year revenue will be "lower than 2009, with the first half of 2010 being particularly weak."
In an investor update, (ARL) said it will "enhance" its business model and begin offering "appropriate additional optional service enhancements to customers in a modular way." In addition, it will "adjust" its revenue management model through an extension of its network into new short-haul markets, partially through a new franchise agreement with Aer Arann. (ARL) will adopt a multichannel distribution strategy and increase cooperation with its code share partners "in the longer term to improve long-haul connectivity, particularly to Asia."
Gross cash fell by about -€400 million/-$566.2 million in 2009 owing to an operating loss, restructuring costs, capital expenditure on airplanes and repayment of debt. However, (ARL) stressed that it has a "strong balance sheet" and that at the end of December, it had gross cash and deposits of €825 million, of which €770 million was unencumbered, "more than sufficient liquidity" to meet short- and medium-term requirements.
It is moving forward with its €97 million cost-cutting program and continues to negotiate with pilots (FC) on a couple of outstanding matters. It said the cash cost of redundancies is expected to be approximately €40 million this year, while the cost-reduction program should deliver around €44 million in savings.
The franchise agreement with Aer Arann covers flights from Dublin to Edinburgh (EDI), Glasgow International (GLA), Cardiff (CWL), Blackpool, Doncaster Sheffield, and Durham Tees Valley and from Cork to (EDI), (GLA), (CWL), Bristol La Rochelle and Jersey. Flights will be branded "Aer Lingus Regional" and be operated by Aer Arann ATR72-500 airplanes and crew (FC) - (CA). Arann will assume full operational and commercial responsibility and pay (ARL) a franchise fee.
(ARL) announced the departure of Deputy CEO & COO, Niall Walsh, effective immediately. (ARL) CEO, Christoph Mueller will assume Walsh's duties temporarily with assistance from Chief Engineer, Fergus Wilson. A search for a new COO is underway.
The Aer Lingus Group will scale down its base at London Gatwick (LGW) to three A320s from five at the start of the summer schedule as it anticipates demand will remain "soft" in the first half of 2010, although it expects to report a "small" operating profit before exceptional items in the second half of 2009. The improved second-half performance "primarily reflects better-than-expected yields," Aer Lingus (ARL) said. It cited last September's reduction in its long-haul fleet and "tactical route cancellations" in November as drivers of the yield improvement. It was -€73.9 million/-$106.2 million in the red through the first six months of 2009.
EasyJet (EZY) said it would add three airplanes to its (LGW) base in response to cutbacks by (ARL) as well as Cimber Sterling (STR). The expansion will increase (EZY)'s fleet at the airport to 43 airplanes.
Effective March 31, (ARL) will close 11 of the 14 routes it currently operates from (LGW): Bucharest, Eindhoven, Faro, Lanzarote, Munich, Nice, Tenerife, Vienna, Vilnius, Warsaw, and Zurich. The remaining three airplanes will serve Malaga, Dublin, and Knock, plus a new route to Cork. The base opened only last April and initial plans foresaw expansion to eight A320s by summer 2010. "These changes reflect weak consumer demand and continuing challenges in the UK operating environment," (ARL) said. As part of its focus on "tight capacity management to improve yields," it also reached agreement with Airbus on deferral of two A320s by about six months to April and May 2011. It negotiated the revised delivery schedule at no additional cost.
(ARL) pilots (FC) represented by the Irish Airline Pilots Association (IALPA) accepted annual pay cuts of -€30 million/-$43.5 million that were recommended by an Irish Labor Relations Commission arbitrator. The reductions are part of (ARL)'s continuing effort to implement a -€97 million savings program, which the airline has said is being held up by pilots (FC)'s reluctance to agree to cuts. (ARL) said that the pay cuts are part of an "integrated package" that includes redundancies, pension changes and other elements "which must be implemented in full along with changes in work rules." (ARL) said it has "invited (IALPA) to immediate talks on the final elements of arbitration with a view to agreement on Jan. 21 as set out in the arbitration document." (IALPA) said that 65% of pilots (FC) accepted the pay reduction and the union "is eager to get into discussions with (ARL) management on the detailed implementation of this plan."
Irish air traffic controllers at Dublin, Cork, and Shannon represented by Impact, plan to strike for 4 hours. The Irish Aviation Authority (IAA) said controllers are demanding a +6% pay increase and that it already has suspended 12 who "stopped doing work on a number of ongoing projects." The (IAA) said the +6% increase would cost the authority €6 million/$8.6 million per year and would be passed on to airlines. Ryanair (RYR) announced the cancellation of 48 flights, while Aer Lingus (ARL) said it would cancel "a number" of flights and Aer Arann said six flights are subject to cancellation and 11 to delay.
Aer Lingus (ARL) reportedly is alliance shopping nearly three years after quitting the Oneworld (ONW) alliance. CEO, Christoph Mueller told "Bloomberg News" that (ARL) "will prepare ourselves for a discussion that the alliances might work on an exclusive basis in the future" and that a decision could come "very soon." He said alliance membership is attractive again because the "Irish market will remain low fare . . . we need to differentiate ourselves." He told "The Guardian," "The fact that Ryanair (RYR) is a shareholder is a limiting factor in attracting other airline shareholders in the framework of a global alliance."
February 2010: Aer Lingus (ARL) flew 942 million (RPK)s traffic in January, a -6.3% drop year-over-year. Capacity was cut -10.7% to 1.4 billion (ASK)s and load factor rose +3.1 points to 67.4% LF.
(ARL)'s summer schedule at Cork will include new service to Bristol, Cardiff, Edinburgh, Glasgow International, Jersey, La Rochelle, London Gatwick, and Tenerife. (ARL) will operate 140 weekly flights from the airport to 22 destinations.
March 2010: Aer Lingus (ARL) flew 884 million (RPK)s traffic in February, down -10.9% year-over-year, against a -8.2% cut in capacity to 1.27 billion (ASK)s. Load factor fell -2.1 points to 69.9% LF.
The Aer Lingus Group reported a loss before taxes and exceptional items of -€66.2 million/-$90.4 million in 2009, reversed from an +€18.8 million profit in 2008, and a quadrupling of its operating loss to -€81 million from -€20 million. (ARL) released the figures in a brief trading statement that came a day after it said it was delaying publication of detailed full-year results because of its inability to list an accurate charge relating to cost reduction agreements it is attempting to reach with unions.
Revenue fell -11% to €1.21 billion, with fare revenue decreasing -13.7% to €992.7 million. Average fare declined by -16.8% from 2008, comprising a -12% drop of the average short-haul fare to €77.10 and a -15.9% slide in average long-haul fare to €255.70. Ancillary revenue increased +16.2% to €173.9 million. Operating costs were cut -6.4% to €1.29 billion, as fuel costs fell -17.3%.
In order to complete its planned €97 million cost savings, full approval of which is being held up by cabin crew (CA) represented by Impact, the (ARL) board reportedly approved compulsory flight attendant (CA) redundancies. CEO, Christoph Mueller informed the government of -230 layoffs, according to widespread press reports.
(ARL)'s 2009 passenger numbers rose +3.8% to 10.4 million, encompassing a -14.8% long-haul reduction to 1.1 million and a +6.5% short-haul increase to 9.3 million. Traffic measured in (RPK)s was down -2.8% to 15.82 billion on a -5.1% capacity reduction to 21.23 billion (ASK)s. Load factor gained +1.7 points to 74.5% LF.
Aer Lingus (ARL) released its full 2009 financial results, three weeks after a preliminary announcement, and reported a -€130.1 million/-$175.2 million loss that represented a -18.4% deterioration from the -€109.9 million deficit suffered in 2008.
Revenue fell -11% to €1.21 billion as ticket revenue dropped -13.6% to €992.7 million and ancillary revenue rose +16.2% to €173.9 million. Full-year costs were cut -6.4% to €1.29 billion, and operating loss before exceptional items related to (ARL)'s cost-reduction program and associated retirement and severance initiatives deepened to €81 million from €20 million. In the second half it managed a +€12 million surplus. Including the exceptional items, full-year operating loss widened -5.4% to -€169.6 million.
Following recent consent from its flight attendants (CA), (ARL) launched the entirety of a savings program designed to realize €97 million in annual benefits by 2012. It also said that a focus on "active management of yield per (ASK) as the primary means to drive performance" has resulted in improved revenue per passenger during the 2010 first quarter. Combined with "lower volume-related costs," first-quarter trading has improved, it said. "The group's full-year performance in 2010 is heavily dependent on the successful implementation of the cost-reduction program," it stated, adding that it expects to achieve -€40 million in savings this year.
The airline transported 10.4 million passengers last year, up +3.8% from 2008. Traffic measured in (RPK)s fell -2.8% to 15.82 billion against a -5.1% cut in capacity to 21.23 billion (ASK)s. Load factor rose +1.7 points to 74.5% LF.
(ARL) received mixed news from the Impact trade union as pilot (FC) members agreed to accept (ARL)'s cost savings package but cabin crew (CA) defeated a series of "extremely unpalatable" proposals from (ARL).
The Irish Air Line Pilots Association (IALPA), a branch of Impact, voted 81% to 19% to accept a -15% reduction in the number of (ARL) pilots (FC), a -10% pay cut, a three-year pay freeze, productivity increases and reduced pension benefits. The union and (ARL) negotiated the cuts in January. (IALPA) President, Evan Cullen said the pilots (FC)'s vote "demonstrated their massive commitment to Aer Lingus (ARL)" and came with the expectation that "management's strategy will provide the airline with a strong and vibrant future and the company's staff with a healthy return on this investment."
Meantime, flight attendants (CA) rejected a savings package negotiated at the Irish Labour Relations Commission in November by a 64% to 36% margin. The union said it recommended the measures, which it said would "minimize job losses and help sustain the future of the airline," but "acknowledged that aspects of the proposals would be very difficult for members to accept."
Impact said a threat from (ARL) last month to cut up to -1,100 cabin staff (CA) if an agreement was not reached likely "had an extremely negative effect on the ballot outcome."
Later, Aer Lingus (ARL) reached a crossroads with disgruntled flight attendants (CA) as attempts to agree on terms designed to produce cost savings met with resistance.
(ARL) confirmed that it plans to lay off -230 flight attendants (CA) and shift remaining cabin crew (CA) to new employment contracts featuring reduced salaries and increased productivity, despite Impact union membership's rejection of terms that would help meet (ARL)'s goal of lowering annual employment expenses by -€97 million/-$131.8 million.
(ARL) CEO, Christoph Mueller said there would be no "sweetheart deals for cabin crew (CA)." Following a board meeting, (ARL) said that "given the overwhelming support" of four union groups, "implementation of the 1,065 compulsory redundancies contemplated in the so called 'Plan B' is unfair." Instead, it will proceed with implementation of those elements of the cost reduction program agreed upon with the four unions.
Aer Lingus (ARL) applied to the USA Port Director at Shannon (SNN) to commence using the Customs and Border Protection facility for flights to New York (JFK) from early May. (ARL) said it might extend the service to other USA cities following the initial trial phase. It currently flies to (JFK) and Boston from (SNN). British Airways (BAB)'s all-premium A318 flight from London City to (JFK) uses (SNN)'s USA customs and immigration pre-clearance facility.
April 2010: Trevor Jensen, COO, ex-Flight Safety Foundation Director.
A330-302 (1106, EI-ELA "St Patrick"), delivery.
May 2010: Aer Lingus (ARL) flew 1.02 billion (RPK)s traffic in April, down -28.6% year-over-year, against a -29.7% cut in capacity to 1.34 billion (ASK)s. Load factor rose +1.2 points to 75.8% LF. The airline did not operate all of its scheduled flights for a seven-day period in April when operations were disrupted by the Icelandic volcano eruption and the resultant closure of Irish and UK airspace.
(ARL) almost halved its first-quarter pre-tax loss to -€36.2 million/-$47.9 million from a -€67.9 million deficit in the year-ago period. Quarterly revenue declined -1.8% but operating costs fell at a much higher rate of -13.3% owing to lower staff costs and a -42.6% reduction in fuel costs. Consequently, operating loss before net exceptional items dropped -49.5% to -€37.8 million from -€74.8 million last year.
"Our first quarter 2010 operating result represents a significant improvement over the corresponding period in 2009," CEO, Christoph Mueller said, noting that the company "adopted a disciplined approach to yield management, which has arrested the decline in average fare per passenger that we experienced in 2009."
Average fare increased +3% to €74.27 on short-haul routes and was up +12.4% to €255.95 on long-haul routes, with "early indications of improvement in business class demand," (ARL) said. However, average fare across the network rose only +0.6% as a result of a higher proportion of short-haul flying. Traffic (RPK)s fell -9.9% to 2.84 billion, comprising a +2% rise in short-haul and a -27.9% fall in long-haul traffic, while capacity was slimmed -10.3% to 4.1 billion (ASK)s, including a -31.8% cut in long-haul capacity and a +4.9% hike in short-haul. Passenger numbers fell -3.2% to 2 million, of which just 172,700 travelled on long-haul routes. Load factor improved +0.3 point to 69.1% LF.
Mueller said (ARL)'s Greenfield cost reduction program "is now underway and staff savings with an annual value of -€18 million have already been achieved." Greenfield delivered -€2.8 million in savings during the quarter, primarily from pay and headcount reductions.
Looking forward, Mueller said it is "appropriate to remain cautious on full-year 2010 performance." While early indications on second-quarter revenue are "positive," (ARL) warned that financial performance for the current quarter will be impacted "significantly" by the recent airspace closures caused by the Iceland volcano eruption. Initial estimates put the cash cost at approximately €20 million, but (ARL) said, "the final cost will depend on the actual level of customer claims." It could face a further loss in revenue from the recent 6-hour flight ban (described next) at Irish airports owing to another volcanic ash cloud from Iceland.
Flights into and out of Ireland and Northern Ireland were grounded for about 6 hours again as another volcanic ash cloud drifted from Iceland. The disruption paled in comparison to last month's (EU)-wide airspace closure, but it renewed fears that volcanic ash could interrupt air traffic on an ongoing basis. In a worrying development, the Icelandic Meteorological Office stated on its website that there has been an increase in activity from the Eyjafjallajokull volcano along with a high number of earthquakes in its immediate area. Both Aer Lingus (ARL) and Ryanair (RYR) cancelled hundreds of flights. UK airports, including London Heathrow were not closed.
Meanwhile, the full extent of the April 15 - 21 closures came into clearer focus with the release of data on the period from (IATA) (ITA). (ITA) said more than >100,000 flights were cancelled over six days, with 19,000 cancelled on both April 19 and 20, the two days of "maximum impact." This equated to about 30% of worldwide scheduled passenger capacity of 4.9 billion (ASK)s, (ITA) said. "Over 1.2 million scheduled passengers were being affected each day," it stated. "The European Commission (EC) estimates the total number of passengers unable to travel over the whole period at 10 million." Lost revenue on flights between the UK and the USA amounted to -$24.9 million daily, (ITA) said. The next-highest route impact was France to the USA on which losses totaled -$8.7 million daily.
GuestLogix reached a "multiyear" agreement with Aer Lingus (ARL) to provide its onboard retail technology and OnTouch merchandising platform, which (ARL) will deploy on all its flights.
June 2010: Aer Lingus (ARL) flew 1.3 billion (RPK)s traffic in May, down -11.4% year-over-year, against a -17.7% cut in capacity to 1.64 billion (ASK)s. Load factor rose +5.6 points to 79.3% LF. Due to continued disruptions caused by ash clouds in European airspace, (ARL) said there were 11 days in the month where it did not operate all scheduled flights.
(ARL) halved its first-quarter operating loss before net exceptional items to -€37.8 million/-$47.9 million from -€74.8 million in the year-ago period. (ARL) posted a -€130.1 million net loss for 2009, a -18.4% deterioration from the -€109.9 million deficit suffered in 2008.
(ARL) will suspend its four-times-weekly, Shannon (SNN) - New York (JFK) flights and four-times-weekly, (SNN) - Boston flights January 5 - March 27, 2011, stating that both routes have had "significant losses" during the winter months in 14 of the past 15 years. (ARL) said it has lost -€163 million/-$199.4 million since 1995 on its transatlantic flights from (SNN) with an average operating loss of almost -€11 million per winter. In addition, "(ARL) has sustained declining load factors on these routes for a number of years," it said. It will continue to operate the routes during the remaining nine months of 2011.
August 2010: Aer Lingus (ARL) flew 1.55 billion (RPK)s traffic in July, down -10.2% year-over-year, against a -13.9% cut in capacity to 1.8 billion (ASK)s. Load factor rose +3.5 points to 85.8% LF.
The Aer Lingus Group reported pre-tax net income of +€15.4 million/+$19.5 million for the second quarter, reversed from a -€13.8 million pre-tax loss in the year-ago period, and maintained that it will do "no worse" than break even on an operating basis for the full year.
Operating profit was +€18.8 million, reversed from a -€18.2 million operating loss in the prior-year period, as revenue lifted +4% to €308 million and expenses rose +14.7% to €289.2 million.
"This operating result was achieved despite the adverse impact of the volcanic ash disruption [in April] as well as the continuation of difficult conditions in our key Irish market where unemployment is currently at 13.7% and where passenger numbers passing through Dublin Airport have declined by -16% [in the 2010 first half] compared to the first six months of 2009," CEO, Christoph Mueller said.
Head of Communications, Declan Kearney said that the "overall demand environment is very sluggish." (ARL) has responded by significantly lowering capacity. Second-quarter traffic decreased -18.5% year-over-year to 3.61 billion (RPK)s on a -19.8% cut in capacity to 4.71 billion (ASK)s, producing a load factor of 76.7% LF, up +1.2 points.
"We're trying to escape the poor demand environment in the Republic of Ireland by increasing the number of transit passengers in Dublin," Kearney said, adding that (ARL) saw a +50% increase in transit passengers on transatlantic flights during the second quarter compared to the year-ago period. Capacity cuts have led to robust yield improvement with short-haul yield increasing +13.8% during the second quarter, while long-haul yield jumped +20.9%.
The company estimates it took a €20 million revenue hit from the April airspace closures. It said the disruption lowered its quarterly net income by around €10 million. Kearney said (ARL) has processed 14,000 claims totaling €10 million regarding compensation for passengers under (EU) regulation 261/2004, which requires airlines to cover hotels and food for stranded passengers.
Kearney said the legislation specifies "no time frame" for passengers to apply for compensation, and the airline is still receiving 300 claims per week.
(ARL) incurred a -€20.8 million pre-tax loss for the first half of 2010, narrowed from a -€81.7 million pre-tax loss in the first six months of 2009, as revenue decreased -3.1% to €538 million.
Aer Lingus (ARL) has resumed four times weekly A320-200 service from Dublin to Hamburg Fuhlsbüttel. It has, however, given up its Belfast International - Munich, and Dublin - Sofia routes.
Dublin Aerospace was awarded a base airplane maintenance contract from Aer Lingus (ARL) to overhaul 12 A320s beginning November 1 for the 2010 to 2011 winter season.
September 2010: Aer Lingus (ARL) CEO, Christoph Mueller confirmed that (ARL) has shelved its low-cost model and will not revert to offering uneconomically low fares to stimulate demand. “We abandoned the low-cost model entirely. We haven't stimulated demand with this [strategy] since January of this year,” he told the Leinster Society of Chartered Accountants in Dublin. “We haven’t seen a zero fare on Aer Lingus (ARL) because we believe that it is not sustainable.”
Mueller, who joined (ARL) a year ago, also said (ARL) is operating from a “zero base” in terms of passenger growth expectations and will not add any extra capacity out of Ireland next year because of continued weak demand due to the recession in the Irish Republic, the "Irish Times" reported. “Air traffic into and out of Ireland declined by a massive -40% over the last two years," Mueller said. "The demand will not reach pre-crisis levels any time soon, if ever.”
Mueller said (ARL)'s joint venture with United Airlines (UAL) on the Washington Dulles – Madrid Barajas route was “profitable after only five months” of operation, and discussions are ongoing to add a second airplane and a second route next year. “We will try to escape [the recessionary environment in Ireland] wherever we can," he stated. "We have no other choice.”
He added (ARL) had also been successful in attracting transfer passengers for its transatlantic flights from Dublin, noting that on some of its long-haul flights “only 20% of people on board are traveling to or from Ireland. The rest are coming from Barcelona, from Paris, from Amsterdam, from Dusseldorf and from all over the place.”
Additionally, regional franchise operations with Aer Arann launched with the summer schedule are performing well, according to Mueller. Aer Arann last month filed a petition to enter into examinership, the Irish legal process similar to Chapter 11 bankruptcy in the USA.
October 2010: Aer Lingus (ARL) will launch a thrice-weekly, Shannon – Paris Charles de Gaulle service on December 17.
November 2010: Aer Lingus (ARL) reported third-quarter operating profit (before exceptional items) surged +35.4% over the year-ago period to +€79.2 million/+$111 million, as revenue rose +5.5% to €411.7 and operating costs remained virtually flat (+0.3%) at €332.5 million.
(ARL) said that the increase in passenger revenue was achieved on both the long-haul and short-haul segments, up +7.7% and +4.9%, despite capacity reductions of -24.1% and -4.4%, respectively, to 1.7 billion and 3.6 billion (ASK)s. Yield per passenger increased +12.5% in the reporting quarter, comprising a +19.7% increase in average yield per long-haul passenger to €340.77 and an 11.1% increase in average short-haul yield per passenger to €95.48. Long-haul load factor gained +10.2 points to 88% LF, while passenger numbers declined -10% to 287,000. On its short-haul sectors, passengers flown declined -5.6% to 2.6 million, mainly owing to the reduction of its activity at London Gatwick.
“Our performance in the third quarter and year-to-date is a very significant improvement on 2009 and strongly supports our strategy,” CEO, Christoph Mueller said. He warned however that the group remains cautious on the outlook for 2011 “given concerns about the durability of the recent aviation sector performance as well as continuing economic uncertainty in our primary markets.”
For the full-year 2010, (ARL) reaffirmed its expectation of achieving operating profit before exceptional items “at the top end of market forecasts" of between €25 million and €29 million with the consensus at €27 million, according to "Thomson Reuters." “This expectation is contingent on the continued delivery of committed staff productivity savings and continued stability in (ARL)’ operating environment and no escalation of the current industrial action,” (ARL) noted.
For the nine months ended September 30, (ARL) reported operating profit of +€60.2 million, reversed from a loss of -€34.4 million in the year-ago period. Revenue inched up +0.5% to €949.7 million, notwithstanding a -14.2% year-on-year capacity reduction. Total operating expenses decreased by -9.2% to €889.5 million, owing to the capacity reductions, coupled with lower fuel prices and the benefits of Greenfield and earlier cost programs.
(ARL) will launch twice-weekly, Cork (ORK) - Palma de Mallorca and Belfast - Gran Canaria service at the end of March. (ARL) will increase frequency on flights from (ORK) to Amsterdam to 13-times-weekly while flights from (ORK) to Lanzarote, Tenerife, and Faro will see an extra weekly service.
Dublin Airport’s new Terminal 2 was officially opened this month. The €600 million/$815.9 million three-story terminal building will be home to Aer Lingus (ARL), American Airlines (AAL), Continental Airlines (CAL), Delta Air Lines (DAL), Etihad Airways (EHD) and US Airways (AMW)/(USA) and is opening for operations on a phased basis.
(ARL) has already started putting selected flights through T2 with a full transfer of its scheduled operations scheduled from January. Etihad (EHD) will operate its first full scheduled service from the new terminal on November 23, the same day the facility opens to the public.
The overall T2 construction project includes a new terminal building, a new boarding gate, Pier E, with 25 departure gates and 19 new airplane parking stands, a new combined heat and power facility, and an upgraded airport road network.
December 2010 Aer Lingus (ARL) is adding new destinations and increasing frequencies to Europe as part of its 2011 summer schedule.
(ARL) will launch twice-weekly service from Dublin to Perpignan and four-times-weekly from Dublin to Stuttgart between 27 March and 29 October. It will operate twice-weekly flights from Dublin to Izmir from 4 May to 17 September. Beginning 28 March until 29 October, (ARL) will launch twice-weekly services from Cork to Palma and between Belfast and Gran Canaria. It will add two flights on the Cork - Amsterdam route increasing the total number of services to 13 flights per week, one flight on the Cork - Lanzarote route, increasing to three flights per week, and one flight will be added on the Cork - Tenerife route increasing to two flights per week. (ARL) will also add one flight on the Cork - Faro route, increasing the service to five flights per week.
January 2011: Aer Lingus (ARL), which already flies from Shannon to London Heathrow, will add London Gatwick service to the mix on March 27. From Shannon, once a transatlantic gateway of sorts, (ARL) also flies nonstop to New York, Boston, Paris, Manchester, Birmingham, Bristol, and Glasgow.
(ARL) was again forced to cancel several flights as cabin crew (CA) who are members of the (IMPACT) union maintained their refusal to accept new duty rosters. The rosters were introduced as part of (ARL)’s objective of increasing the cabin crew'S (CA) overall working time to 850 block hours a year. Last week (ARL) chartered up to nine airplanes, including four from Ryanair (RYR), to limit the level of flight disruptions resulting from the escalating dispute. According to Irish media, more than >175 of the airline's 1,050 cabin crew (CA) have been removed from the payroll for refusing to operate new rosters. (IMPACT) argues that the introduction of the new rosters is not part of (ARL)’s so-called Greenfield restructuring plan that was outlined in October 2009 by its newly appointed CEO, Christoph Mueller. Project Greenfield aims to reduce annual operating costs, excluding fuel, by -€97 million/-$132 million before the end of this year and remove “legacy” practices from its operations. After difficult negotiations, (IMPACT) accepted in early 2010 the requirement to increase flying hours to 850 a year but it insists that its members “did not vote to accept the roster changes imposed by management.” The union opposes the elimination of mid-flight lunch breaks on short haul flights as well as the fact that the new rules require staff members to alter their work schedules by up to three hours at short notice.
February 2011: A320-214 (4634, EI-DVM), delivered in retro livery.
March 2011: Aer Lingus (ARL) reported net income of +€46.5 million/+$64 million for 2010, reversed from a -€130.1 million deficit in 2009. (ARL) attributed the turnaround to a change in business strategy at the end of 2009, when it abandoned the pure low-cost/low fares model and adopted a “value carrier” positioning. This enabled it to refocus on a pricing policy prioritizing yield per (ASK) rather than load factor, while simultaneously reducing capacity, closing loss-making routes, and launching a €97 million cost-saving program.
Annual capacity fell -13.9% to 18.27 billion (ASK)s, while traffic decreased -12.2% to 13.89 billion (RPK)s and passengers carried fell -10% to 9.3 million. Yet revenue grew +0.8% to €1.22 billion and expenses dropped -10% to €1.16 billion. Operating profit after exceptional items, including a €32.5 million charge toward settlement with the Irish tax authorities, came in at +€23.6 million, compared to a -€169.6 million operating loss reported for 2009. Average fares rose +12% to €107.12. Ancillary revenue per passenger increased +5.5% to €17.67.
(CEO), Christoph Mueller pointed out that the strong improvement was achieved “despite adverse economic conditions in our core Irish market and significant operational challenges caused by the April 2010 volcanic ash and weather-related disruptions.” He cautioned that (ARL) expects challenges this year as well citing rising fuel costs, higher airport charges and Ireland's weak economy. "If current fuel prices persist, we expect that 2011 operating profit will be significantly below that of 2010," he said.
(ARL) also announced that it intends to exercise an option to defer three A330s, which would otherwise be due for delivery from Airbus (EDS) in 2013 and 2014 and to replace them with three A350s for delivery “no earlier than 2018.”
(ARL) said it does not plan to raise fares in 2011. (ARL) said it will not “participate in the wave of capacity hikes announced by other European carriers” and keep (ASK)s largely flat on the capacity it had scheduled for 2010, which excludes an approximate -6% reduction in (ASK)s owing to the volcanic ash and weather-related disruptions. Its short-haul fleet will remain at its current size as four new A320s will be delivered while three A321s will be returned to their lessors and one airplane will be sold.
(ARL) confirmed it intends to reduce its long-haul fleet by one unit as the expansion of the joint venture (JV) with United Airlines (UAL) is put on hold. It currently has eight A330s, one of which is employed in the (JV) with (UAL).
For the fourth quarter, (ARL) posted a net loss of -€18 million, narrowed from a loss of -€117.9 million in the year-ago period. (ARL) conceded that the first quarter “is proving a difficult start to 2011” as bookings were affected by severe weather disruption in December and industrial action by cabin crew (CA) in January and February.
May 2011: Aer Lingus (ARL) reported a deepening of its first-quarter operating loss to -€55.9 million/-$78.9 million), reversed from negative (EBIT) of -€37.9 million in the year-ago period, and warned that its €96 million cost-cutting plan might not be enough to keep (ARL) out of the red. A net result was not supplied.
“In light of the continued weakness of the Irish economy and pressures on non-controllable costs, we are assessing whether the Greenfield cost-reduction program is sufficient to protect profitability for the future or whether further measures are required,” said CEO, Christoph Mueller, who blamed the higher first-quarter operating deficit on the disruption by cabin crew (CA) represented by the Impact trade union in January and February, the “difficult demand conditions, particularly on leisure routes from Ireland and the timing of the Easter holidays.” “While we still expect that (ARL) will be profitable in 2011, we expect that the level of profitability will be much lower than in 2010,” he said.
Revenue decreased -4.8% year-on-year to €217.9 million on a -11% reduction in capacity to 3.65 billion (ASK)s. About 6% of the reduction was a deliberate decision to reduce services during the seasonally weak demand period and a shift of capacity to the (ARL) Regional franchise (operated by Aer Arann) while the rest was because of industrial action by cabin crew (CA) that grounded flights. The later timing of Easter this year stripped about €5 million from the quarterly revenue, (ARL) said.
Despite the capacity reduction, total operating expenses increased +1.8% to €271.9 million. Fuel costs decreased -4.9% as a result of reduced capacity. The number of passengers carried fell -11.9% to 1.78 million and load factor lost -2.5 points to 66.6% LF. Ancillary revenue per passenger dropped to €18.24 compared to €19.02 last year, as fewer passengers checked luggage. Conversely, average fares increased by +9%. Short-haul (RASK) increased by +9.7% in the quarter and long-haul (RASK) increased by +5.1%.
Looking forward, (ARL) said, "Fuel costs remain a concern and jet fuel price inflation will most likely fully absorb further yield improvements in 2011, despite the benefits of the group's fuel hedging program."
(ARL) is bracing for another strike as pilots (FC) commenced a ballot for industrial action in a dispute over rosters on its A320 and A330 fleets, Irish media reported. The Irish Airline Pilots' Association also wants management to produce and implement a sustainable manpower plan to address issues, including pilot (FC) number retention.
(ARL) acquired two leased A320s and returned one A321 to its lessor during the quarter. There were also a number of subsequent fleet changes, including the purchase on finance lease of a third new A320, return of two leased A321s and the sale of an older A330. The group expects to take delivery of a fourth A320 on a finance lease by the end of June. (ARL) continues to consider the sale of an owned A320.
(ARL) also confirmed it exercised an option with Airbus (EDS) to defer a previously announced order for three A330s, which were originally scheduled for delivery in 2013 and 2014. Instead, it will take delivery of three A350s no earlier than 2018.
Aer Lingus (ARL) launched twice-weekly, Izmir - Dublin A320 service.
June 2011: Aer Lingus (ARL) pilots (FC), represented by the Irish Airline Pilots' Association (IALPA), notified (ARL) they will start industrial action starting June 7th in protest over the introduction over new rosters on the A320 and A330 fleets. (IALPA), which is a branch of the Impact trade union, balloted its members over possible strike action last month and was approved by approximately 87% of its pilots (FC).
From June 7, pilots (FC) based in Cork and Dublin will not work on annual leave days and will report for duty one hour later than their report times. “This withdrawal of flexibility will destroy our ability to operate a proper schedule as we will miss our airport slot times, parking stands, gate positions and will be unable to fulfill flight connections for customers,” said (ARL) CEO, Christoph Mueller. “In addition, pilot (FC) and cabin attendant (CA) operational duties will be out of sync, which may result in (CA) having insufficient hours to operate all flights. This may lead to a full cancellation of operations from 7 June, unless (IALPA)/(IMPACT) stand down their action,” Mueller warned, additionally noting that if the action proceeds, it will have a “significant adverse effect on profitability” as it is occurring in the peak summer season.
(ARL) said a bilateral process has been ongoing for some time to develop new manpower planning and roster models that will enable (ARL) to achieve the “already agreed levels of productivity while providing pilots (FC) with better quality rosters.” It claims that in recent weeks, however, the issue has been “exacerbated by shortage of pilots (FC) due to higher than expected levels of attrition in the UK.”
On June 7th, Aer Lingus (ARL) pilots (FC) called off their industrial action, after management and representatives of the (IALPA) reached an agreement on rosters for pilots (FC) based in the Republic of Ireland.
The agreement covers only pilots (FC) operating from (ARL)’s bases at Dublin, Cork and Shannon. Talks concerning pilots (FC) based at London Gatwick and Belfast (BHD) were still continuing. The dispute for (BHD)-based pilots (FC) is mainly related to pay, with a work-to-rule industrial action scheduled to begin June 10.
“Following extensive engagement between (ARL) and pilot (FC) trade union (IALPA)-(IMPACT), (ARL) can confirm that the immediate threat of industrial action, due to commence 7 June, has been removed,” said (ARL) on its website.
(IALPA), which is the pilots (FC)'s branch of the Impact trade union, said the agreement was reached on the two main issues, including management of the peak summer period roster and the development of a longer-term form of roster, but specified that “the industrial action has been suspended until July 1, in order to allow time to implement agreed proposals on the summer rosters.” It added: “The long-term roster model will be implemented in the winter months, with rules governing the new roster system to be agreed by July 1.”
July 2011: Aer Lingus (ARL) will launch weekly, Cork - Las Palmas service on October 30. It will launch Cork service to Barcelona (thrice-weekly) and Rome Fiumicino (twice-weekly) this winter, as well as twice-weekly, Belfast service to Rome Fiumicino and Alicante.
August 2011: Aer Lingus (ARL) launched a new app and mobile website on which customers can plan and review flight details, check in, receive travel alerts, check real-time flight information and make a booking. The app is available for iPhone or Android as well as for Blackberry and Nokia phone users. Mobile and app check-in is available on routes between Dublin and London Heathrow, Gatwick, Manchester and Birmingham, and scheduled to be fully rolled out network-wide over the next couple of months.
September 2011: The Aer Lingus (ARL) Group reported a consolidated net loss of -€13.1 million/-$18.9 million in the 2011 first half, narrowed from an €18.4 million deficit in the year-ago period, and upgraded its profit outlook for the full year.
“Although economic conditions in Ireland remain challenging, we are pleased with the booking profile for the rest of the year and we are positive about our trading prospects for the remainder of 2011,” CEO, Christoph Mueller said. “We expect revenue growth in the second half to be broadly similar to that of the first six months. As a result, we are more positive about the profitability of the business in 2011 than we were at the start of the year.”
First-half revenue rose +5.8% year-over-year to €569.1 million and revenue for the second quarter jumped +14.1% to €351.2 million, following a weak first quarter, which was affected by disruptions caused by an industrial action by the (IMPACT) cabin union and difficult demand conditions, particularly on leisure routes from Ireland.
Short- and long-haul passengers carried increased +8.6% and +4.8%, respectively, in the second quarter compared to the prior-year period, resulting in a total passenger increase of +8.3%. Average fare per passenger rose +8.4% year-over-year to €113.13 for the quarter but ancillary revenue per passenger decreased -1.2% to €17.1. Average passenger load factor decreased -2.2 points to 71% LF owing to some continuing weakness on European leisure routes and increased competition on transatlantic routes.
(ARL) said it now has implemented a new revenue management system, “which will improve demand forecasting and revenue optimization abilities.” (ARL) generated an operating result before exceptional items of €25.9 million in the second quarter, which represented a notable +37.8% improvement over the year-ago period. For the six months, operating loss before exceptional items widened +46.3% to -€27.8 million owing to the -€53.7 million operating loss in the first three months. Passenger numbers were down -1% to 4.4 million in the first half, while the average fare per passenger heightened +8.4% to €106.94.
Addressing whether it will enter a global airline grouping, (ARL) said that a detailed review concluded that the costs of joining an alliance outweigh the benefits in the short-term and “the impact of alliance membership on our cost base is inconsistent with Aer Lingus (ARL)’s ongoing focus on achieving lower operating costs.” (ARL) added it will re-visit the topic next year, “particularly if a North Atlantic bilateral relationship using antitrust immunity (ATI) appears viable at that stage.”
The Irish government is considering the sale of its 25% stake in Aer Lingus (ARL) because it is no longer seen as a “strategic” asset, Transport Minister, Leo Varadkar said. “No formal decision on that [(ARL) sale] is made yet,” Varadkar said in a radio interview, which was cited in Irish media. “What I can say is that that stake in the past was held for strategic reasons and, having studied the matter over the summer, I don't think that really stands anymore.”
The divestment of the (ARL) holding was included in a government-sponsored report published in April as part of the country’s commitment to raising approximately €2 billion/$2.8 billion from sales of state assets to reduce high public debt. The report also listed the Dublin Airport Authority (DAA) and the Irish Aviation Authority as possible disposal targets. The sale of one of the terminals at Dublin airport might not yield much money for the government owing to the (DAA)'s pension deficit, according to Varadkar.
Ryanair (RYR), which is (ARL)’s largest shareholder with close to 30% ownership, said in a statement it would not bid for the 25% stake if the government indicated such an offer would be unwelcome. It also said it would “welcome” and work with another financially strong airline/investor to restore shareholder value and even consider selling its own stake. “Should another financially strong airline/investor acquire the government’s 25% stake, (RYR) would not rule out entering into discussions with that party for the subsequent disposal of Ryanair (RYR)’s near 30% stake, subject to an acceptable agreement on price and maximizing shareholder value,” it said.
Britain's Office of Fair Trading (OFT) last year opened an investigation on whether (RYR)'s ownership of the stake in (ARL) hampers competition in the sector. (OFT) said earlier this month it expects to make a decision by October 26.
Dublin Aerospace won a two-year contract with Aer Lingus (ARL) for its A320 base maintenance services at Dublin Airport from September 1. The contract includes full overhaul of eight A320 airplanes for the winter season 2011/2012 and a similar number of airplanes for 2012/2013.
October 2011: JetBlue Airways (JBL) partnership with Aer Lingus (ARL) is generating 50,000 one-way trips per year.
November 2011: The Aer Lingus Group (ARL) reported a third-quarter operating profit of +€94.5 million/+$130 million, after exceptional items, up +14.1% from +€82.8 million earned on an operating basis in the year-ago period. It said the “strong performance is directly attributable to the commercial, operational and cost reduction actions taken by the group since late 2009.”
CEO, Christoph Mueller said the results “were achieved against the backdrop of difficult trading conditions. Demand in our primary markets continues to be impacted by consumer concerns about the future and the ongoing eurozone debt crisis. We are also affected by high airport charges and are now exposed to higher fuel prices than earlier this year.”
(ARL)’s third-quarter revenue increased +5.9% year-over-year to €435.8 million, while total operating costs rose at a lower rate of +2.6% to €341.6 million. Staff costs were up +10.2% and fuel costs increased +8.7% to €83.7 million on flat fuel consumption compared to the year-ago period. (ARL) said it is experiencing rising fuel costs month-to-month as it loses the benefit of fuel hedges put in place before spring 2011.
(ARL)’s third-quarter traffic rose +3.7% to 4.43 billion (RPK)s on a +2.4% increase in capacity to 5.37 billion (ASK)s, producing a load factor of 84.4% LF, up +1 point. Long-haul traffic inched down -0.1% on -1.3% reduction of capacity, lifting load factor +1 point to 89% LF. Short-haul (RPK)s rose +3.7% on +2.4% higher capacity, leading to a +1.1 point improvement in seat factor to 82.4% LF. Short-haul boardings rose +2.3% to 2.7 million and passengers carried on its long-haul routes contracted -0.3% to 286,000. The average fare per passenger increased +5.2% to €100.41 on short-haul routes and +3% to €351.05 on long-haul routes. Retail revenue per passenger rose +6.1% to €18.28.
(ASL) said it expects fourth-quarter operating losses will be higher compared to the year-ago period, owing to higher quarterly fuel and airport charges. It forecasts its full-year 2011 operating results, before exceptional items, to be “at the upper end of the range” of current market expectations of €30 to €42 million.
January 12: Aer Lingus (ARL) is expected to be privatized, with the Irish government planning to sell its 25% stake in (ARL. Ryanair (RYR) has also announced that it would be willing to sell its 29.8% stake in (ARL). Etihad Airways (EHD) has been named as a potential investor.
(ARL) will introduce new routes in 2012:
Cork - Brussels National: 3x weekly A320-200 service starting on March 26;
Dublin - Stockholm Arlanda: 4x weekly A320-200 service starting on March 25;
Dublin - Verona: 2x weekly A320-200 service starting on March 28.
A319-111 (3377, EI-EPS), ex-(EC-KME), RBS leased.
February 2012: The Aer Lingus (ARL) Group has reported a consolidated net income of +€71.2 million/+$95.6 million for 2011, up +65.7% from a +€43 million net profit in 2010, marking its second year of profitability. (ARL) credited the results to moving away from the pure low-fare model and repositioning itself as a “value airline,” focusing on yield instead of load factors.
It said that both the group’s long- and short-haul networks continued to be profitable. In 2009, before it adapted the new strategy, long-haul was significantly loss-making and short-haul was just barely breakeven.
Operating profit before net exceptional items fell -6.5% to +€49.1 million from a +€52.5 million profit in 2010. Exceptional items comprised a €37.2 million credit in 2011.
“While the 2011 operating result was lower than that reported for 2010, it was nonetheless significantly ahead of our expectations at the start of 2011 and was achieved against a difficult backdrop of non-controllable fuel price inflation, increased airport charges and challenging demand conditions in our primary markets,” said (CEO) Christoph Mueller.
Revenue rose +6% to €1.29 billion and passenger revenue rose at the same rate to €1.23 billion, with increases in both short- and long-haul revenue. Passengers carried in (ARL) mainline increased +1.8% to 9.51 million, while the average fare per passenger rose +4.8% to €112.27 and retail revenue per passengers inched up +0.4% to €17.73. Traffic (RPK)s rose +1.1% to 14.05 billion on a +1.8% increase in capacity (ASK)s to 18.58 billion; load factor decreased by -0.5 points to 75.6% LF.
(ARL) said it has received free allowances amounting to 80% of its 2012 requirement under the (EU) emissions trading system (EU ETS) and it has purchased the balance of its requirements for the year for €1.66 million.
Looking forward, (ARL) said it expects key markets to remain very competitive this year and plans to keep capacity flat. “Our expectation for 2012 is that the group will remain significantly profitable albeit below 2011 levels. This will require Aer Lingus (ARL) to drive increased passenger volumes and to also generate a higher average yield per seat across the network,” it said.
March 2012: Aer Lingus (ARL) executives are concerned the planned sale of the Irish government’s 25% stake will put its profitable business model at risk. (ARL) reported a net income of +€71.2 million/+$95.6 million for 2011, up +65.7% from a +€43 million net profit in 2010.
The Irish government last week announced plans to sell its 25% shareholding in (ARL) as part of a €3 billion disposal program of state assets per a bailout agreement with its main lenders: — the European Union (EU), the European Central Bank and the International Monetary Fund. The country, which received an €85 billion aid package in 2010, said it would dispose of its (ARL) stake when market conditions are more favorable for the airline.
“The sale [of the 25% stake in (ARL)] is a matter for the government, but at Aer Lingus (ARL) we would like to stress that our success is very much linked to building connectivity and partnerships with multiple airlines,” (ARL) Head of Communications, Declan Kearney said. “Ireland is an island and we see it as our primary mission to connect Ireland with the world. If the stake is sold in a way that is offensive to any of our partners, that would damage our business model and the connectivity of the country,” Kearney said.
(ARL) left the Oneworld (ONW) Alliance in 2007 and since has extended its network through code shares with airlines across all three alliances: AirFrance (AFA)/(KLM)/SkyTeam (STM) Alliance, British Airways (BAB)/Oneworld (ONW) Alliance, and United Airlines (UAL)/Star (SAL) Alliance. It also has a sales agreement with JetBlue (JBL).
Ryanair (RYR), which is (ARL)’s largest shareholder with a 29.8% stake, said the government should sell its stake to (RYR), "The Irish Times" reported. (RYR) has launched two unsuccessful take-over bids for its smaller competitor in the past.
“If the Irish government had any sense, they would sit down and ask what is best for Ireland going forward. It is clearly to merge the two Irish airlines,” (RYR) CEO, Michael O’Leary said. “If it is not sold to Ryanair (RYR), if it is sold to anybody else, it is inevitable that Aer Lingus (ARL) will be broken up because everybody else only wants certain bits: the Heathrow slots and maybe the long-haul. Nobody wants the short-haul, because they will have to compete with Ryanair (RYR).”
JetBlue Airways (JBL) has denied rumors in the Irish press that it is interested in acquiring the Irish government’s 25% stake in Aer Lingus (ARL). “We have no interest or intention in purchasing the Irish government's stake in (ARL),” (JBL) said in an emailed statement to "Reuters." Irish media reported that (JBL) had spoken to the management of (ARL) about the possible purchase.
The Irish government plans to sell its 25% shareholding in (ARL) as part of a €3 billion/$3.92 billion disposal program of state assets per a bailout agreement with its main lenders (the European Union (EU), European Central Bank, and International Monetary Fund (IMF)). (ARL) executives have voiced concern that the sale of the government stake might put its business model at risk.
(ARL) left the Oneworld (ONW) Alliance in 2007, and has since extended its network through code shares with airlines across all three alliances: AirFrance (AFA/(KLM)/SkyTeam (STM) Alliance, British Airways (BAB)/Oneworld (ONW) Alliance and United Airlines (UAL)/Star Alliance (SAL). It has had a sales agreement with (JBL) since 2008.
Aer Lingus (ARL) sees an opportunity in Lufthansa (DLH)’s divestment of British Midland International (bmi) (BMA) to expand its slot portfolio at London Heathrow [LHR], (ARL) (CEO), Christoph Mueller said.
“We are after slots [at (LHR)] in the wake of the proposed acquisition of (BMA) by (IAG) or (BMA) going into receivership,” Mueller said. (ARL) operates 27 daily take-off and landing slots at (LHR), of which it owns 23.
“London Heathrow has a huge catchment area and we want to pull more transfer traffic to our long haul. We have limited growth opportunities in Ireland but we can compensate the weakness of the Irish market by increasing our transfer. Our transfer traffic is growing and long haul is doing very well,” he said. (ARL)’s long-haul routes for years recorded major losses but now contributes to the overall profitability of the company, Mueller said.
The sale of (BMA) to International Consolidated Airlines Group (IAG) is under review by the European Commission (EC), which is expected to announce March 30 if it will approve the deal or open a more in-depth Phase II investigation. (IAG) initially offered to surrender 10 daily slot pairs at (LHR) to address the European Union’s (EU) anti-trust concerns and later added an additional four pairs, according to an insider, who added that (IAG) offered to give up slots on routes from (LHR) to Edinburgh, Aberdeen, Cairo, and Riyadh, among others.
(IAG) and (DLH) are keen to avoid a lengthy Phase II investigation, which would easily add six months to the acquisition process and put the continuation of (BMA) at risk. Both groups have been vocal to stress the possible loss of 4,800 jobs if the takeover is blocked. (BMA) reported an operating loss of -€199 million/-$264.3 million in 2011 and is short of liquidity to continue operations, the "Financial Times" reported last month based on a report by the company’s auditors.
Observers, however, are not sure if 14 slot pairs will be sufficient to obtain regulatory approval from the (EU), which is more difficult in approving national airline mergers than cross-border tie-ups. It prohibited the take-over of (ARL) by Ryanair (RYR) and blocked the proposed merger of Aegean Airlines (CRM) and Olympic Airways (OLY).
Mueller also said he is confident (ARL) will remain profitable in 2012. It posted a +€49.1 million operating profit in 2011 and +€52.2 million in 2010. “We will be profitable, that is safe to say. By how much will depend of the fuel prices,” he said. “The performance of our short-haul business routes and long-haul business class is very strong,” he said, citing a booming Irish export industry. On (ARL)’s transatlantic routes, its business-class (C) cabin “is always sold out before economy (Y) class,” he confirmed.
In contrast, leisure routes remain under pressure as the Irish consumer is “on safe mode,” he said. “We reduced our exposure on these routes already last year and we will continue to do so this year. We’re focusing more and more on the non-Irish consumer and shifted out ticket sales, from 55% outbound and 45% inbound to 45% outbound and 55% inbound.”
April 2012: Aer Lingus (ARL) has put its first two ex-Iberia (IBE) A319-100s into service on March 25. The A319-100s are based at the Belfast Aldergrove International airport (BFS), where they have replaced two of three A320-200s, replacing the A320s on the routes from there to the Spanish destinations of Alicante airport (ALC), Barcelona El Prat International airport (BCN), Faro airport (FAO), Lanzarote Arrecife airport (ACE), Malaga Pablo Ruiz Picasso airport (AGP) and Tenerife Sur airport (TFS). London Heathrow airport (LHR) continues to be served three times daily from Belfast with an A320-200.
May 2012: Aer Lingus (ARL) reported a strong first-quarter performance in what is traditionally a loss-making period of the year for the Irish flag-carrier. (ARL)’s first-quarter operating loss was reduced by almost one-third, to -€36.1 million/-$47.4 million compared to a loss of -€53.7 million for the same period last year. Total first-quarter revenue was €251.5 million, up +15.4% on the same period last year.
(ARL) said that although the figures were flattered by stripping out the adverse effects of industrial action by staff that had affected 2011’s results, it had nevertheless turned in a strong revenue performance, particularly in its long-haul operations and notably in its business-class (C) cabin.
Long-haul fare revenues were up “significantly” by +24.6% to €52.7 million in the first quarter compared to the year-ago quarter, while short-haul revenues, which make up the bulk of (ARL)’s services, rose +12.6% to €148.9 million.
Passenger volume was up +6.6%, while yields rose +8.4% overall.
(ARL) (CEO), Christoph Mueller described the latest figures as “an encouraging start to 2012.”
With the Irish economy feeling the effect of severe austerity measures in the global downturn, he said, “We have deliberately compensated for the continuing decline in private Irish consumer demand with an increased focus on time-sensitive routes, which carry a higher proportion of business passengers.”
Mueller said (ARL) now shares “the more upbeat view on industry trends expressed in (IATA)’s April 2012 airline business confidence survey and if current trends continue, (ARL)’s operating profit for 2012 should match that achieved in 2011.” (ARL)’s 2011 operating profit before net exceptional items was +€49.1 million.
However, Mueller cautioned that the performance of some short-haul routes was weaker than expected and (ARL) is still experiencing inflationary cost pressures.
Etihad Airways (EHD) said it has acquired a 2.987% stake in Aer Lingus (ARL). (EHD) said the purchase would forge a commercial partnership with the Irish national carrier.
(EHD) is widely expected to eventually make an official bid for the 25% stake in Aer Lingus (ARL) the Irish government still holds. The Irish government announced in September it would sell its stake in (ARL) as part of efforts to reduce public debt.
(EHD) operates 10 flights a week from Abu Dhabi to Dublin and has carried more than >750,000 passengers between the two capitals since it began flying the route in July 2007.
(EHD) has code share partnerships with 34 airlines around the world.
Aer Lingus (ARL) Regional will launch daily, Birmingham - Knock service on June 11. (ARL) Regional launched a new route to Bournemouth from Dublin.
June 2012: Aer Lingus (ARL) is reportedly considering moving its operations in Northern Ireland from Belfast Aldergrove International (BFS) to Belfast George Best City airport (BHD) according to a report by the BBC. (ARL) currently has two A319-100s and an A320-200 based at Belfast International. Belfast City airport had recently lost one of its main customers after low-cost carrier (LCC) bmibaby (BMI) has closed its base there. British Airways (BAB) (taking over from bmi british midland (BMA), Flybe (BEE) and Manx2 ((IATA) Code: NM, based at Isle of Man Ronaldsway airport (IOM)) currently serve Belfast City, while Aer Lingus (ARL), easyJet (EZY), Jet2 (JT2), Thomas Cook Airlines UK (JMA)/(GUE), Thomson Airways (TFY)/(ATZ) and United Airlines (UAL) operate from Belfast International.
Engineers and mechanics (MT) at Aer Lingus (ARL) have called for a dispute with (ARL) to be referred to Ireland’s Labor Relations Commission (LRC) for conciliation talks.
However, the engineering staff’s union is simultaneously pressing ahead with a ballot for possible industrial action if (ARL) reduces its maintenance presence at Shannon Airport (SNN), in southwest Ireland.
(ARL) said it is involved in consultations regarding the relocation of some of its maintenance operations from (SNN) to Dublin airport (DUB). There are 70 engineering and maintenance (MT) posts at (SNN); (ARL) plans to move around 55 to (DUB).
It is understood this is to efficiently maintain its long-haul fleet of seven A330s, five of which are based at (DUB). Currently, undertaking A330 line maintenance at (SNN) means airplanes have to be ferried empty from/to (DUB), racking up airplane cycles, landing charges and crew hours.
Following a meeting of the (UNITE) union, which represents the engineering (MT) staff, union Regional Officer, Brian Gormley said (ARL) staff has called for the matter to be referred to the (LRC). It will hold a ballot of all (ARL) engineering (MT) staff for possible industrial action.
If the union votes for industrial action and if (ARL) goes ahead with plans to relinquish the lease of its (SNN) maintenance hangar June 30, the union will immediately give notice of the action, Gormley said.
Ryanair (RYR) has launched another takeover bid for Ireland’s national carrier, Aer Lingus (ARL).
After European financial markets closed, (RYR) said that (RYR) Holdings subsidiary, Coinside Ltd, was making an all-cash offer of €1.30/$1.65 per share for (ARL), a premium of 38.3% over a closing price of €0.94. This values the Aer Lingus (ARL) Group at €694 million/$877.8 million.
(RYR) built up a 29.82% shareholding in (ARL) from 2006 and has made two previously unsuccessful attempts to buy (ARL). (ARL) has long wanted (RYR) to be forced to sell its shareholding and (as recently as a month ago) welcomed the outcome of a long-running legal wrangle in which the UK’s Office of Fair Trading was decreed to have the jurisdiction to investigate the allegedly anti-competitive effects of (RYR)’s minority shareholding in (ARL). The status of that investigation, if (RYR) succeeds in buying (ARL), was not immediately clear.
(RYR)’s previous takeover attempts failed to gain sufficient shareholder acceptance and were ultimately blocked by the European Commission (EC) on competition grounds.
The Irish government, which holds a 25% stake in (ARL), has always opposed a sale to (RYR). The government now wishes to sell its stake to bolster its finances in the face of Ireland’s severe economic downturn.
(RYR) said it believed circumstances have changed since its previous takeover attempts. It listed several factors, including the continued consolidation of European airlines, which it said was leaving (ARL) isolated as an increasingly peripheral player in the marketplace.
It added that any competition concerns raised by the (EC) “can be addressed by (RYR) making appropriate remedies.”
The (RYR) statement said the two carriers could complement each other, with (RYR) helping (ARL) “by growing (ARL)’s short-haul fleet to offer more competition at some of Europe’s major airports where currently (ARL) operates and (RYR) has no desire to fly.”
(ARL)’s transatlantic operations would also benefit from (RYR)’s investment to grow, (RYR) stated.
In an expected move, the Aer Lingus (ARL) board rejected the third attempt by (RYR) to take over the company, saying the bid undervalued (ARL).
According to (ARL), its management team “has delivered a significantly improved operational and financial performance since 2009, transforming (ARL) into a robust, profitable airline.”
It also said the UK Competition Commission (CC) was currently investigating (RYR)’s 29.82% stake in (ARL), built up at the time of two earlier takeover bids, “with the result that (RYR) is now under a legal prohibition from undertaking any further integration with (ARL) without the consent of the (CC); and may be subject to an order to sell down its shares at the end of the (CC) investigation.”
(ARL) has long wanted (RYR) to be forced to divest its shareholding, arguing it is intolerable its main competitor holds such a large stake in it.
The statement also noted that (RYR)’s 2006 takeover bid was blocked on competition grounds by the European Commission (EC). “Consequently there is significant uncertainty that any offer from (RYR), if made, would be capable of completion.”
(RYR) argued the world has moved on since its earlier bids, with the (EC) having allowed several major European airline takeovers in the intervening period and that (ARL) needs a more powerful partner to prevent it becoming an increasingly peripheral player in the marketplace.
(ARL) advised its shareholders to take no action on the (RYR) offer.
July 2012: A series of exceptional items dragged down Aer Lingus (ARL) in the 2012 first half, widening (ARL)’s deficit compared to the year-ago period.
(ARL)’s six-month pre-tax loss widened to -€24.5 million/-$30.2 million compared to -€13.7 million in 2011. Major items behind the loss were cost provisions associated with (ARL)’s Greenfield restructuring program (€11.7 million), plus €4.3 million in fees to advisors who helped to oppose Ryanair (RYR)’s recent takeover bid.
In what is traditionally a loss-making half, however, (ARL) pointed to improved operating figures, with a loss of -€4.4 million, compared to a deficit of -€26.8 million for the first half of 2011.
(ARL) said a strong first quarter was followed by a positive second quarter, noting an “exceptionally strong long-haul performance” that produced a +11% rise in passengers and +9% rise in yields. Overall passenger numbers were up +5.4%. The bulk of (ARL)’s flights are European, with almost all its long-haul services bound for the USA, serving the Irish diaspora.
First-half revenue was up +10.1% against the same period in 2011, with second-quarter revenue up +6.7%. Average yield per passenger for the first half rose +6.3%.
Operating costs for the first half increased +5.8% compared with the same period in 2011, largely due to a +29.6% increase in fuel costs and a +8.1% increase in airport charges.
“If current trends continue, Aer Lingus (ARL)’s operating profit, before net exceptional items, for 2012 will be at least that achieved in 2011 [+€49.1 million],” (ARL) (CEO), Christoph Mueller said.
Etihad Airways (EHD) anticipates an imminent expansion of its relationship with Irish flag-carrier Aer Lingus (ARL), (EHD) President & (CEO) James Hogan said. He said the Abu Dhabi - Dublin route had been "very successful" for (EHD) and "you'll see more developments in coming weeks."
(EHD) holds a stake of just under 3% in (ARL). The Irish government, which holds a 25% stake in the national carrier, plans to sell it off to help relieve its strained finances. "We've always said that when the Irish government divests we're very keen to look at it, but they've not approached us on that," Hogan said. "Until that's timetabled, I can't say any more."
Later, Aer Lingus (ARL) and Etihad Airways (EHD) announced code share and interline agreements. The move came just days after (EHD) President & (CEO), James Hogan said that commercial developments in the two carriers’ relationship were imminent.
The two airlines said they would continue “to discuss additional commercial and cost opportunities to develop a closer working relationship in areas such as joint procurement.”
This latest agreement gives (ARL) passengers access to (EHD)’s network through (EHD)’s Abu Dhabi home base, particularly to destinations in the Indian subcontinent, Australasia and Asia-Pacific. (EHD) will in turn cooperate with (ARL) on services to 18 destinations, including transatlantic flights from Dublin to New York and Boston plus several UK and European destinations.
The arrangements will become effective during the current quarter.
August 2012: United Airlines (UAL) and its partner, Aer Lingus (ARL) will end their joint venture operation between (UAL)'s hub at Washington Dulles International (IAD) and Madrid Barajas (MAD) from November 1. (ARL) currently operates a daily A330-200 service between the two airports on behalf of (UAL) which will continue to serve Madrid daily from Newark Liberty International (EWR) during the winter season.
Aer Lingus (ARL) has confirmed earlier news reports and announced it will move its operations in Northern Ireland from Belfast Aldergrove International (BFS) to Belfast George Best City airport (BHD) from October 28. It will continue to serve London Heathrow (LHR) three times daily and add a new three times daily route to London Gatwick (LGW) in addition. (ARL) will however not operate any services to Portugal and Spain anymore, and so far has only announced the resumption of its routes to Faro (FAO) and Malaga Pablo Ruiz Picasso (AGP) from the end of March 2013. It currently also serves Alicante (ALC), Barcelona El Prat International (BCN), Lanzarote Arrecife (ACE), Las Palmas Gran Canaria International (LPA) and Tenerife Sur (TFS) from Belfast International.
September 2012: Aer Lingus (ARL) and Air Canada (ACN) have signed an interline agreement, with a code share due to follow early next year.
The interline agreement allows for joint electronic ticketing and use of either airline’s check-in kiosks, plus baggage checking through to a final destination.
Until now, the only direct Canada - Ireland flight has been an (ACN) high-summer service between Toronto and Dublin. Passengers heading for Canada on (ARL) services fly to Chicago, then connect with United Airlines (UAL) flights to Calgary, Edmonton, and Winnipeg.
The new interline arrangement with (ACN) will allow passengers on (ARL)’s 23 daily flights from Ireland to London Heathrow to connect with (ACN)’s transatlantic services to a range of Canadian destinations.
October 2012: Aer Lingus (ARL) resumed services to Denmark’s capital Copenhagen (CPH) from its Dublin (DUB) hub on 28 October. (ARL) now flies the route daily with its 174-seat A320s, competing with (SAS)’ 13 flights a week and Norwegian’s twice-weekly operations. (ARL) previously operated the route between October 2007 and November 2008. (ARL) is also making a switch in the Northern Ireland market on the same day, pulling out of Belfast International and moving to Belfast City (BHD). Now in winter, only one route will move; the three daily flights to London Heathrow (LHR), which are operated with 144-seat A319 airplanes in competition with British Airways (BAB)’s 41 weekly operations. Two leisure routes, to Malaga and Faro, will relaunch next spring, but other routes are dropped. However, 28 October also saw the launch of a new route. (ARL) now flies from Belfast City to London Gatwick (LGW), also three times a day with A319 airplanes.
November 2012: Northern Ireland has scrapped Air Passenger Duty (APD) on all direct long-haul flights departing from Northern Ireland airports from January 2013. This Final Stage of the (APD) Bill was passed in the Stormont Assembly.
Finance Minister, Sammy Wilson said the legislation was “good news for our economy in these challenging financial times. Abolishing (APD) on long-haul flights will help to protect and improve our international air access and ensure the competitiveness of our airports. It will enable Northern Ireland to remain an attractive place to do business and I also hope that it will help secure flights to new long haul destinations.”
In November 2011, the UK Treasury cut (APD) for passengers on direct long-haul flights out of Northern Ireland to the lower short-haul rate, currently £13/$20.76, as opposed to the long-haul rate of £65 per passenger in economy (Y). The aim is to level the competitive playing field between Northern Ireland and the Irish Republic where the departure tax for flights from Dublin, across the border, is just €3/$3.82 per passenger. As a result, Belfast International Airport (BFS) was under threat of losing its direct long-haul flights to its southern competitor.
In February, power to set (APD) rates for direct long-haul flights departing from Northern Ireland was devolved to the Northern Ireland Assembly, which has now opted to scrap the long-haul tariff altogether.
(BFS) Managing Director, John Doran said: “Given the increasing differential with regard to direct long haul (APD) levels between the UK and Republic of Ireland, and the very specific problems, which this caused for Northern Ireland connectivity, we are grateful to the Northern Ireland Executive and (HM) Treasury that decisive action has been taken.” He said the move would enable (BFS) to build on its existing air links with the USA and develop additional long haul markets in Canada “and the eastern hemisphere, in partnership with the investment and tourism authorities.”
Other destinations served by direct long-haul flights out of (BFS) include Egypt and Barbados.
December 2012: The International Airlines Group (IAG), parent of British Airways (BAB) and Iberia (IBE), has signed a non-binding agreement covering Aer Lingus (ARL)’s London Heathrow (LHR) slots.
The deal is one of the remedies being proposed by Ryanair (RYR) as it seeks to acquire (ARL) for the third time. The European Commission (EC) is reviewing the acquisition and is expected to give its verdict by February 27. “We have signed a non-binding memorandum of understanding (MOU) with (RYR) (which is subject to (EC) approval) as part of its review of (RYR)’s proposed takeover of (ARL), and the (IAG) board approval,” an (IAG) spokeswoman said.
According to the "Financial Times," the deal covers more than >85% of (ARL)’s (LHR) slots and (BAB) is offering to take over (ARL)’s (LHR) services for three to five years. After this time, the (IAG) would have the right to buy and redeploy the slots.
January 2013: In 2012, Aer Lingus (ARL) increased transAtlantic traffic by +9% (RPK)s, and increased (ASK) capacity by +2%.
February 2013: Aer Lingus (ARL) reported a 2012 net profit of +€34.1 million/+$46.1 million, down -52% from +€71.2 million in 2011.
(ARL), the Irish flag carrier said the results were affected by €26.5 million of exceptional items and that operating profit before exceptionals was up +40.7% at €69.1 million. Those exceptional items include the costs of defending itself against Ryanair (RYR)’s third attempt to take over the airline.
Passenger numbers from its mainline operations inched up +1.5% to 9.65 million, but revenue for the year grew +8.2% to €1.39 billion.
Load factor was up +2.1% to 77.7% LF and average yield increased +7% to €120.15. Long-haul yields remained particularly strong, up +9.6%, while short-haul yields were up +3.8%.
(ARL) (CEO), Christoph Mueller described 2012 as “an excellent year.” (ARL) has pursued what it describes as a “value carrier” business model with low-cost, short-haul services. It has a more traditional model on its long-haul sectors, which are focused heavily on the USA.
“We believe in our new business model,” Mueller said. “Our positioning at the center of the market is allowing us to take market share from the legacy carriers as well as the pure low-cost and regional carriers.” “In 2012, we continued to build our network of strong industry alliances, completing agreements with Etihad Airways (EHD) and Air Canada (ACN). We have also extended our franchise agreement for Aer Lingus Regional services with Aer Arann.”
He added that 2013 will be a year of growth. “We will grow our North Atlantic services by +15% this year and deploy four short-haul airplanes in cooperation with Virgin Atlantic (VAA) out of London Heathrow as (VAA)'s new "Little Red” domestic/regional operations.
“We will also fly one A330 airplane during the next three winter seasons on behalf of a major European tour operator, which will improve airplane utilization in the low season.”
JetBlue Airways (JBL) and Aer Lingus (ARL) announced a code share under which (ARL) will place its code on 29 (JBL) flights in North America.
On February 27th The European Commission (EC) officially blocked Ryanair (RYR)’s third Aer Lingus (ARL) takeover attempt.
Competition Commissioner, Neelie Kroes said the takeover would “have led to dramatically reduced choice for consumers and, as a result, the likelihood of lower quality and higher fares. They were in particular not capable of ensuring that other airlines would enter the market on a sufficient scale to compete effectively with the merged airline.”
(ARL) welcomed the decision. “(ARL)’s position from the outset has been that (RYR)’s offer should never have been made. The series of inadequate remedy offers presented by (RYR) only underlines the view that (RYR) made its offer without any reasonable belief that it could obtain clearance,” (ARL) (CEO), Christoph Mueller said.
(RYR) immediately denounced the decision as “a political decision to pander to the vested interests of the Irish government (which is a minority 25% shareholder in (ARL)) and is not one that is based on a fair and reasonable application of (EU) competition rules or precedent airline merger approvals in Europe.” It vowed to appeal the decision.
(RYR) had put in place an extensive package of remedies to try to ward off the threat of an (EC) ban, striking deals with the International Airlines Group (IAG) and UK-based regional carrier Flybe (BEE) to take over more than >40 routes on which (RYR) and (ARL) are the only providers.
April 2013: SEE ATTACHED "AIRLINER WORLD" MAGAZINE AER LINGUS (ARL) UPDATE - - "ARL-2013-04 - UPDATE-A/B."
Aer Lingus (ARL) recorded a slightly worsened first-quarter loss compared to the previous year and (ARL) said it would be reinforcing cost-cutting measures in response. (ARL) reported an operating loss of -€45.5 million/-$59.1 million compared to a -€36.1 million operating deficit in the year-ago period. Revenue rose +3.3% year-over-year to €259.7 million.
(ARL) and United Airlines (UAL) have expanded their code share agreement to include the USA carrier's year-round Washington Dulles - Dublin service, as well as its summer flights from Chicago O'Hare to Shannon.
The Irish flag carrier already code shares on (UAL)-operated flights to 51 cities across North America. In return, (UAL) places its code on Aer Lingus (ARL)-operated flights from Dublin, Cork, Belfast, and Shannon to London Heathrow.
The USA Department of Transportation (DOT) has approved Etihad Airways (EHD) application to begin code sharing with Aer Lingus (ARL) to USA destinations. (EHD) can now offer 10 weekly code share flights via Dublin to Boston, eight to Chicago and 12 to New York.
Passengers from Dublin to New York and Chicago will be able to pre-clear USA Customs and Border Protection in Dublin, meaning Etihad Airways (EHD)’s passengers will effectively arrive in the USA as domestic passengers. The service will use Aer Lingus (ARL) airplanes.
(EHD) holds nearly a 3% equity stake in (ARL) and the two carriers are discussing additional commercial and cost opportunities. (EHD) carried more than >215,000 passengers between Abu Dhabi and Dublin in 2012.
(ARL) has sought clearance from its shareholders to dispose of a pair of London Heathrow slots to British Airways (BAB).
(GE) Capital Aviation Services Limited (GECAS) (GEF) announced it will lease two A320s to new customer Aer Lingus (ARL).
The flag carrier of Ireland, (ARL) operates an all-Airbus fleet of 43 airplanes to more than >80 destinations worldwide.
May 2013: Aer Lingus (ARL) commenced flights to its only Portuguese destination from Shannon (SNN) on May 1st, when it launched thrice-weekly services to Faro (FAO) using its A320s. The southern Portuguese destination, which is already served by (ARL) from Dublin (15 weekly frequencies), Belfast City and Cork (both daily), is now offered from Shannon until September 13th.
Aer Lingus (ARL) will damp-lease three 757-2Q8s (28167, EI-LBR; 27623, EI-LBS; 28120, EI-LBT) ex-Finnair (FIN) from Air Contractors (HCA) from early next year. It plans to mainly use the 757-2Q8s on transatlantic routes with lower demand including its routes from Shannon International (SNN) to both Boston General Edward Lawrence Logan International (BOS) and New York John F Kennedy International (JFK). (ARL) is also considering launching new routes with the airplanes that will be flown by Air Contractors (HCA) pilots (FC) but with Aer Lingus (ARL) cabin crew (CA). (ARL) (CEO), Christoph Mueller has announced plans to increase the amount of outsourced flying by (ARL) on behalf of other carriers as part of its future development plan (that also includes voluntary redundancy packages being offered for 100 of its staff). (ARL) currently operates (damp-lease) four A320-200s (including 2374, EI-DEI) on behalf of Virgin Atlantic (VAA) as "Virgin Red" from London Heathrow and will wet-lease one of its A330-200s to Novair ((IATA) Code: N9, based at Stockholm Arlanda airport (ARN)) (NOO) for the next two winter seasons to operate charter services between Scandinavia and the Caribbean. (ARL) plans to lease one of its slot pairs to British Airways (BAB) during the summer season and has asked its shareholders for approval to do this, given it would be more expensive to operate the flights itself to keep the slots.
(ARL) serves 26 countries, 78 destinations and 110 routes.
(ARL) has made advancements with its Wi-Fi, pre-ordering meals on its shorthaul flights, and upgraded meals on its longhaul flights.
(RYR) could be forced to sell or reduce its 29.8% stake in Aer Lingus (ARL) after the UK Competition Commission (CC) provisionally ruled it could reduce competition between Great Britain and the Republic of Ireland.
July 2013: In early July 2013, Aer Lingus (ARL) (CEO), Christoph Mueller declared that (ARL) was “back to growth mode” ("Financial Times," July 4th 2013), driven by Atlantic expansion. After +13% capacity growth on the Atlantic in 2013, Aer Lingus (ARL) is planning a remarkable +24% growth in 2014. An important element of this growth involves attracting transfer traffic originating in the UK regions away from London Heathrow, building on Dublin’s geographic position and growing North American connectivity.
There are to be new routes from Dublin to San Francisco and Toronto and increased frequencies from Shannon to New York and Boston. A significant part of the new capacity will be operated under wet-lease by (ASL) Aviation Group. An important proportion of (ARL)’s regional feed from the UK into Dublin is also operated by a third party (Aer Arann) and Aer Lingus (ARL) itself operates short-haul flights for Virgin Atlantic (VAA).
With these moves, Aer Lingus (ARL) appears to be testing and developing the concept of a virtual airline.
Aer Lingus Regional began 2X-daily, Dublin - Manchester service.
August 2013: Ryanair (RYR) (CEO), Michael O’Leary believes there is “little doubt” the UK Competition Commission (UKCC) will ultimately order (RYR) to sell its 29.8% stake in Aer Lingus (ARL).
(RYR) will add an extra daily frequency on each of five UK - Ireland routes from this winter, as it bids to raise the pressure on its rival Aer Lingus (ARL). From October, (RYR) is to add "at least" one extra daily service on routes from Dublin to Birmingham, Bristol, Edinburgh, London, and Manchester, mirroring Aer Lingus (ARL)'s recent increases in frequencies.
(CEO), Michael O'Leary says the additional flights provide fresh evidence of "intensified competition" for the UK Competition Commission, which next month will rule on whether (RYR) must divest its near-30% stake in (ARL).
The rising frequencies by both carriers comes despite (ARL) (CEO), Christoph Mueller saying that "weakness in UK routes, identified in our first quarter (Q1) results, has continued in (Q2)," and citing this as a contributing factor in a half-year operating loss of -€16.4 million/-$21.7 million.
Flightglobal's FlightMaps Analytics data shows that in all markets, (ARL) continues to offer more frequencies than (RYR).
In the Dublin - London market, (ARL) will in November operate 601 services, a 37% share of the market, compared with 449 flights by (RYR), which has a 27% share.
On the Birmingham - Dublin route, (ARL) will have a 67% share of frequencies compared with (RYR)'s 33%, while (ARL) also dominates on Manchester - Dublin, with 53% of frequencies; Edinburgh - Dublin, with 66%; and Bristol - Dublin, with 55%.
Aer Lingus Regional launches 2X-daily, Dublin - Newcastle service on October 24.
September 2013: Aer Lingus (ARL)) has been linked to three potential merger and acquisition scenarios following the publication of the United Kingdom's Competition Commission's (UKCC) ruling last week in which it directed Ryanair (RYR) to reduce its near 30% stake in Aer Lingus (ARL) immediately. According to the "Irish Independent," (ARL) is involved in merger talks with another undisclosed airline said to be interested in taking a significant stake in (ARL). The report claims that while (ARL)'s management has "determined that the possible deal will only result in limited revenue and growth opportunities, it could generate cost savings of between -EUR 35 million and EUR 50 million across a number of operational activities." There are also potential fleet and maintenance synergies that have been identified by (ARL). It claims there is no likelihood of a deal being reached any time soon. In the (UKCC)'s Ryanair (RYR) ruling, it was also revealed that (ARL) had, early in 2012, entered confidential discussions with an unnamed airline regarding a possible tie up; a deal that would have hinged on (RYR) disposing or reducing its stake. "Discussions had progressed to the stage of a confidential exchange of financial information, and contacts had taken place between senior management and respective financial advisers, but these ended following the announcement of (RYR)'s hostile bid," (ARL) told the UK watchdog. It has also been revealed that talks regarding the potential acquisition of another carrier, believed to be Aer Arann Regional ((IATA) Code: RE, based at Dublin International), were also held prior to the latter's subsequent acquisition by the Stobart Group.
October 2013: Aer Lingus (ARL) added Lanzarote (ACE) in the Canary Islands as the only Spanish destination it offers from Shannon (SNN) in western Ireland. Beginning on October 26th, (ARL) operates weekly (Saturday) flights to the new destination using A319s. Competition on the 2,700 km route comes from Ryanair (RYR), which serves Lanzarote from Shannon also with a weekly service.
AeroMobile, a UK-based telecommunications (GSM) service provider and Panasonic Group subsidiary, will enable Aer Lingus (ARL) passengers to connect to its Wi-Fi service to use text messaging on their smart phones, as well as Internet browsing on all of their personal electronic devices (PED) at 30,000 feet. A total of seven A330s will be equipped with the satellite technology provided by AeroMobile.
Stephen Kavanagh, Chief Commercial Manager at Aer Lingus (ARL) said (ARL) will become the third airline in Europe to provide the Internet Wi-Fi service on transatlantic flights. "Having direct internet access on flights of up to ten hours in duration, will be of huge benefit to our customers, in particular to business customers," said Kavanagh.
November 2013: Aer Lingus (ARL) has reported a third-quarter operating profit of +€94.9 million/+$128.1 million, up +4.4% from +€90.9 million in the year-ago period.
The Aer Lingus (ARL) Group has appointed John Hartnett, Nigel Northridge and Nicolas Villen to the board as independent, non-executive directors of the company, effective January 1st, 2014, following the retirements of Directors, Danuta Gray and Thomas Moran, effective December 31.
December 2013: Irish flag-carrier Aer Lingus (ARL) faces the threat of industrial action from staff after talks broke down over a shortfall in a staff pension scheme. The long-running dispute over the pension scheme, which employees at (ARL) share with other aviation industry workers, has a deficit of more than >-€700 million/-$958 million.
A recommendation by Ireland’s Labor Court earlier this year saw (ARL) agree to pay €140 million toward the deficit. However, the Services Industrial Professional & Technical Union (SIPTU) is seeking a higher contribution and has now decided to ballot its members for industrial action after talks with (ARL) failed to bring about a resolution of the problem. “The pension fund has been underfunded for years,” (SIPTU) spokesman, Frank Connolly said. Staff had paid into the fund for years, but the shortfall means they would not receive the amount they had been anticipating. He said the ballot would go ahead from this weekend, but if the vote was in favor of action, there would be no disruption over the Christmas period.
In a statement to the Dublin Stock Exchange, (ARL) described the union’s demands as “completely unreasonable and unacceptable,” adding that the union’s actions went against the Labor Court’s recommendations. However, the court’s decisions are not legally binding on participants.
(ARL) said it would take legal advice on the matter, including examining whether union officials could be held personally financially liable for any losses incurred by (ARL) in the event of industrial action.
This could only happen if the union officials are deemed to be outside the normal legal protections granted to trade union officers.
It is understood that the (SIPTU) is seeking roughly a further €100 million from the airline: “That isn’t going to happen,” an (ARL) official said. The pension fund ran the risk of becoming “a bottomless pit,” he added.
February 2014: Aer Lingus (ARL) began daily, Shannon - Boston Boeing 757 service. Beginning March 30, (ARL) will begin 6x-weekly, Shannon - New York (JFK) service.
(ARL) has defined what now looks like the final version of its long-haul fleet strategy. (ARL) plans to take delivery of a mix of Airbus A350-900s and A350-900 regionals between 2018 and 2020, which represents a delay of up to three years compared to earlier scenarios.
(ARL)’s wide body planning has undergone several iterations. At some stage, (ARL) had ordered a mix of A330s and A350s before switching to the new model entirely. In an earlier agreement, (ARL) and Airbus (EDS) had settled on initial A350 deliveries in 2015. But (CEO), Christoph Mueller said the two sides have spent months to negotiate a new schedule, which now sees the first airplane arriving three years later. (ARL)’s order is for nine A350-900s.
Mueller did not elaborate on why the changes were made. However, Airbus (EDS) is keen to accommodate the needs of larger customers as soon as possible, whereas (ARL) has a relatively young fleet of A330s. Mueller has also said in the past that the A350 range capabilities are more than what (ARL) needs, therefore the interest in at least an A350 regional subfleet. Most of its North American destinations are on the East Coast, but (ARL) is adding new services to Toronto and San Francisco in the summer.
(ARL) has significantly grown capacity last year on long-haul services (+11.6%), while reducing short-haul services -4.6%. The increase was mainly due to the integration of one additional A330 previously used on a wet-leased contract for United Airlines (UAL) (Washington - Madrid). As Aer Lingus (ARL) was successful in selling the additional seats, long-haul capacity is going to be up a further +20% in 2014 as a result of the introduction of three Boeing 757s on lease from (ASL) Aviation. Two of the airplanes are based in Shannon for services to Boston and New York.
Mueller said the arrangement will likely be continued until it can figure out how the 757s could be replaced by a more modern airplanes. (ARL) has been looking at operating the Airbus A321neo on transatlantic routes, but is still not yet convinced the type is operationally capable of the required missions.
Aer Lingus (ARL) last year posted a +€61.1 million/+$83.9 million operating profit, in line with its latest guidance, but lower than the +€69.1 million achieved a year earlier. The lower-than-hoped-for result is mainly due to the competitive pressures in the short-haul arena, where its main competitor, Ryanair (RYR) has been pricing even more aggressively than usual. Revenues were up +2.3% to €1.43 billion.
To counter the trend toward lower operating margins, Mueller is launching the “Cost Optimization & Revenue Excellence (CORE)” program, which aims to cut costs -€30 million within the next two years. As part of CORE, (ARL) plans to reduce overhead headcount and wants to negotiate more flexible labor deals to take into account the seasonality of its business. On the revenue and product side, (ARL) will introduce lie-flat seats in its long-haul business (C) class next winter and Wi-Fi access on short-haul flights.
All of its USA flights are to be pre-cleared in Dublin (the airplanes are therefore parked at domestic USA terminals and baggage is automatically transferred to connecting flights with no need to pick it up. (ARL) also plans to relaunch its website.
Mueller said any moves in terms of mergers and acquisitions are likely held up by the uncertainty surrounding the stakes of Ryanair (RYR) and the Irish government. (RYR) has launched an appeal against a decision by the UK competition authorities to require it to reduce its shareholding from 29.8% to 5%. The Irish government also has a 25% stake in (ARL). The government has stated it wants to sell in principle, but left open when and how it might do so.
March 2014: Aer Lingus (ARL) has started rearranging flight schedules in an attempt to minimize disruption from a planned March 14 strike. The four-hour strike by members of Ireland’s Service, Industrial, Professional and Technical Union (SIPTU) is aimed at both (ARL) and Dublin Airport Authority (DAA) over a protracted and complex dispute over a shortfall in the companies’ pension scheme.
Talks have rumbled on for years over the pension fund, which has a growing deficit that has now reached roughly €750 million/$1 billion.
Recommendations last year by Ireland’s Labor Court failed to solve the problem as they were not legally enforceable, and (SIPTU) is demanding that both Aer Lingus (ARL) and the (DAA) pay more money into the fund to protect their members’ pensions. (ARL) has offered to pay €140 million toward the deficit, but is unwilling to make what it fears could become further, open-ended funding commitments.
(ARL) said it would “engage constructively” with a proposed experts’ panel that will carry out an urgent investigation on finally resolving the pension fund dispute, but said it believed the Labor Court’s recommendations remained “the only basis on which a fair and balanced outcome can be achieved.”
It added that the announcement of industrial action “has already caused significant commercial damage to the company and has inconvenienced and distressed customers.” The four-hour strike, starting at 5 am, will affect Dublin, Cork and Shannon airports.
An an (ARL) spokesman said it intends to operate all its transatlantic services by rescheduling them outside the period of the planned strike, this will affect the weekend immediately preceding the St Patrick’s Day holiday, when many people travel.
April 2014: Aer Lingus (ARL) launched its second route to Croatia, when it began weekly services (Saturdays) from Dublin (DUB) to Pula (PUY) on April 19th. The 1,741 km sector will be flown utilizing (ARL)’s 174Y-seat A320s and will face no competition from other airlines. (ARL) also serves the Croatian market with four weekly flights on the Dublin - Dubrovnik airport pair.
Aer Lingus (ARL) is leasing a 757-2Q8 (28167, EI-LBR - - SEE ATTACHED - - "ARL-757-200-2014-04)") from Air Contractors (HCA) for operating on the Shannon - Boston route. Two more 757-2Q8s (27623, EI-LBS; 28120, EI-LBT) will be added for the northern summer season under the same "damp lease" arrangement ((HCA) pilots (FC) and Aer Lingus (ARL) cabin attendants (CA)) for service from Shannon to New York and from Dublin to Toronto (YYZ). The 757s have 12J (PY flat beds) and 165Y. (ARL) has returned to the Canadian market after 30 years of absence, last flying to Canada in the 70s and 80s with scheduled flights to Montreal-Pierre Elliott Trudeau International Airport (YUL) and rare charter flights to Toronto (YYZ).
May 2014: Aer Lingus (ARL) reported an operating loss of -€48.5 million/-$67 million in the first quarter, widened from an operating loss of -€45.5 million a year ago. Revenue for the quarter, at €259.4 million, remained flat year-over-year.
(ARL) said the results were due to the Easter holiday period shifting into the second quarter and the threat of industrial action in early March by Ireland’s Service, Industrial, Professional & Technical Union (SIPTU), which caused a sharp fall-off in bookings ahead of the busy St Patrick’s Day holiday.
(CEO), Christoph Mueller said the threatened strike, over a long-running pension dispute, had caused numerous flight cancellations, forcing (ARL) to hire replacement airplanes. The strike was called off shortly before it was due to start.
Despite these problems, Mueller said its “short-haul operations remain an attractive and profitable business despite the continuation of intense price competition in European markets. Forward trends are positive, especially in long haul.”
In April, (ARL) launched long-haul services from Dublin to San Francisco and Toronto, following the inauguration of Shannon to Boston and New York routes. It has leased three Boeing 757-2Q8s to increase long-haul capacity by more than >20%. The Irish diaspora in North America has always made transatlantic routes attractive for Aer Lingus (ARL). The 757-2Q8s are operated as follows:
(EI-LBR) - based in Shannon and flying to Boston and New York;
(EI-LBS) - based in Shannon and flying to Boston and New York
(EI-LBT) - based in Dublin and flying only on the Toronto route.
The Dublin - Toronto route is part of (ARL)'s recent TransAtlantic expansion plans. This is the 4th new launch by (ARL).
Mueller added that (ARL)’s cost optimization and revenue excellence (CORE) program has now been initiated, with the aim of cutting €30 million in costs over >10 years.
Aer Lingus (ARL) has warned its forward bookings have been “considerably damaged” by an industrial action planned by cabin crew union (IMPACT) for May 30. The dispute, the latest in a series of labor clashes at the Irish flag carrier (ARL), is over rostering and duty hours. (IMPACT) represents 1,000 of (ARL) cabin crew (CA).
In a stock market release, (ARL) said its April operating results across its short- and long-haul operations was substantially up on the prior year and “significantly ahead” of management expectations (even after allowing for the timing of Easter).
However, it cautioned that a strike planned for May 30 has deteriorated forward bookings and is likely to undermine revenue growth. “The unwarranted 24-hour industrial action by the (IMPACT) trade union, deliberately timed to occur just before the seasonally important June bank holiday weekend in Ireland, has considerably damaged (ARL)’s forward booking profile,” (ARL) said in the stock market disclosure. It added that (IMPACT) is planning to announce further strike plans “in due course.”
July 2014: Aer Lingus (ARL) posted a first-half net loss of -€12.3 million/-$16.5 million, narrowed from a -€23.5 million net loss in the year-ago period. The improvement came despite the loss of roughly -€10 million, due to strike action by cabin crew (CA) earlier this year; without that negative impact, (ARL) said it would “have approached breakeven.”
First-half revenue was up +6% to €697.2 million, while fare revenue per seat rose +5.5% to €89.18.
The Irish flag carrier said its second quarter was particularly strong, posting an operating profit of +€38.7 million (its best second-quarter result for at least five years).
Long-haul services continue to provide the main impetus for the improved figures. Transatlantic links predominate due to the large Irish diaspora in North America.
(ARL) added some +25% extra long-haul capacity in the second quarter, but this was more than accounted for by a +29.2% increase in (RPK)s.
“If you look at what other carriers are saying about the North Atlantic routes, they believe the market is over-supplied,” (ARL) spokesman, Declan Kearney said. “That’s not what we’re experiencing.”
He put this at least partly down to Dublin’s growing reputation as a secondary transatlantic connection point. The city’s airport has a USA immigration clearance facility, which means passengers effectively arrive in the USA as domestic passengers, avoiding the frequently lengthy immigration queues at airports such as New York (JFK) and Boston Logan. “Most people who have experienced [Dublin] want to use it again,” he said.
His comments were echoed by (CEO) Christoph Mueller: “We continue to attract more and more passengers in the North Atlantic transfer market from both European and US locations. Improved connectivity via Dublin now allows us to significantly extend our addressable markets into continental Europe, while also enabling us to grow further in secondary UK markets from already solid market positions.”
Mueller said (ARL)’s short-haul services had held steady despite highly competitive market conditions. (ARL) regional franchise services, operated by Stobart Air, carried +26% more (ARL) passengers in the first half compared to the year-ago period “and continue to contribute strongly to a positive UK and long-haul performance,” he said.
In his full-year outlook, Mueller said he expects operating profit before exceptional items would be “at least in line with 2013 (i e, +€61.1 million).”
Aer Lingus (ARL) (CEO) and Director, Christoph Mueller will step down from both posts in May 2015, the Irish flag-carrier announced. He was appointed as (CEO) five years ago.
Mueller has been in charge through some turbulent times at Aer Lingus (ARL), notably the third attempt by rival Ryanair (RYR) to buy the airline. There has also been a long-running argument with staff over pension rights and industrial action.
His period at the helm has also seen the company become a member of Etihad Airways (EHD)’s burgeoning equity alliance network. (ARL)'s board will now start a selection process for Mueller’s replacement.
Chairman, Colm Barrington said the company “will be very sorry to see Christoph leave. We are extremely grateful to him for his excellent service and positive contribution since 2009. “Under Christoph’s strategic leadership, Aer Lingus (ARL) has been transformed into a strong, consistently profitable airline with a clear strategic direction, a resilient business model as a value carrier and an improved cost base. Christoph has placed (ARL) in a position where we can look to the future with confidence and can continue to develop and grow (ARL) for the benefit of our customers, our employees and our shareholders.
“I am also particularly grateful to Christoph that in mutually agreeing a departure date that is some time away (in May 2015) Aer Lingus (ARL) has sufficient time to both conduct a thorough process to select and appoint a new (CEO) to ensure that a comprehensive and seamless transition process is completed.”
Commenting on his experience at Aer Lingus (ARL), Mueller said he had “thoroughly enjoyed” his time in Dublin. “The last five years has involved very hard work for the entire team at (ARL) and it is rewarding to see that the company is well positioned both strategically and financially. In that context and given it is the fifth anniversary of the date of my appointment, I feel it is the right time to hand over the reins.”
September 2014: The Aer Lingus Group confirmed (CFO) designate, Bernard Bot has been appointed (CFO) as announced in July. He succeeds Andrew Macfarlane. The group also announced that Chairman, Colm Barrington has been re-appointed for a further term of one year to expire in September 2015. He was first appointed in September 2008.
Aer Lingus ((IATA) Code: EI, based at Dublin International) (ARL) (CEO), Christoph Mueller says his airline is hopeful that rival Ryanair (RYR) will begin its divestiture from (ARL) over the course of next year. “We appreciate the fact that (RYR) has to sell down its share to 5% because it is our main competitor,” Mueller told Abu Dhabi's National newspaper. “We all really hope that the issue of (RYR) would be done in the course of 2015. But when exactly in 2015, it is very difficult to say.”
In March, the UK Competition Commission (CC) concluded that (RYR)'s minority shareholding in (ARL) (29.82%) "gave it material influence over (ARL) and resulted in a substantial lessening of competition." As a result, the (CC) ordered (RYR) to divest itself of the majority of its holding to no more than >5% but did not give a deadline.
(RYR) had previously tried to take over the company but to no avail.
Concerning the carrier's stock exchange presence, Mueller said he wanted to see a greater amount of (ARL) shares traded as at present, only 35% is listed on the Dublin and London Stock Exchanges. The (CEO) noted that there was "a lot of demand" for (ARL)'s shares, particularly from USA investors.
While there is mounting speculation that Etihad Airways (EHD) will increase its stake in the carrier from its current level of 4.99%, Mueller said (ARL)'s next phase of cooperation with the Emiratis would focus on creating synergies between the two airlines with particular focus on "the cost side and joint purchasing.”
(ARL) currently operates 50 airplanes, travels to 25 countries, 79 destinations on 112 routes and 282 daily flights.
November 2014: News Item A-1: Aer Lingus (ARL) reported an operating profit of +€112.9 million/+$142 million for the quarter ended September 30, up +19% from the +€94.9 million reported for the year-ago quarter.
(ARL) said this was the strongest third-quarter result since the financial crisis in 2008. Total revenue for the quarter was up +13.9% year-on-year to €531.1 million, driven largely by strong short-haul performance and transatlantic capacity expansion. Operating costs also increased during the quarter, up +12.6% to €418.2 million.
Aer Lingus (ARL) (CEO), Christoph Mueller said: “Our quarterly operating result of €112.9 million, representing an operating margin of 21.3%, is +19% above the prior year and is our highest third-quarter operating result since the financial crisis. Our net cash increased by +29.7% to €571.6 million.
Mueller said (ARL)’s short-haul sector “traded strongly in a tough environment, with revenue growth increasing by +5.5% in the quarter,” and passenger numbers up +2.2%. He said this was vindication of management actions taken to address the effects of industrial disruption in the second quarter. The long-haul sector also performed well, with long-haul fare revenue up +34% year-on-year and passenger numbers up +23.8%.
Overall, passenger numbers increased +4.8% to just over >3 million for the quarter.
Traffic (RPK)s were up +12.4% to 5.3 billion and capacity (ASK)s increased +11.4% to 6.1 billion. Passenger load factor was up +0.7% points to 86.5% LF.
For the nine months to September 30, operating profit was up +31.5% to +€103.1 million. Revenue was up +9.3% to €1.2 billion, largely bolstered by a +25.5% increase in long-haul passenger revenue and a +69.3% increase in other revenue (primarily Aer Lingus (ARL) contract flying business). Operating costs for the year-to-date were up +7.6% to €1.1 billion.
Passenger numbers for the year-to-date were up +2.5% to 7.7 million, with (RPK)s up +8.7% to 12.5 billion and (ASK)s up +6.6% to 15.7 billion. Passenger load factor for the first nine months was up +0.8% point to 80.1% LF.
(ARL) typically reports a seasonal loss in the fourth quarter, and (ARL) said this was expected to be the case in 2014. In addition, (ARL) said fleet expansion, which yielded improved performances in the second and third quarters, inevitably led to higher fixed costs that would affect the fourth quarter result, which is expected to be a higher operating loss than for the same period in 2013.
“Assuming the current trading environment is maintained, management now expect that (ARL)’s full year 2014 operating profit, before exceptional items, will be ahead of the 2013 operating result (i.e., +€61.1 million),” Mueller said.
News Item A-2: Aer Lingus (ARL) is continuing to capitalize on its increasingly profitable transatlantic services by announcing a ninth USA destination, as well as increasing capacity on existing routes.
Its summer 2015 schedule will include a new 4x-weekly summer service from Dublin to Washington Dulles from May 1.
It also intends to up its Dublin - San Francisco service to a daily rotation, compared to the current 5x-weekly, introduce a third daily flight from Dublin - New York over the peak June through August period, and increase its Dublin - Orlando flights from 3x- to 4x-weekly from May 1.
There will also be a +20% capacity increase on the Shannon - Boston route from June through August.
Overall, long-haul capacity will increase +18.4% per week in the peak summer season. Short-haul capacity will also increase in summer 2015 with new routes to Agadir and Nantes and increased frequencies to Palma, Fuerteventura, Bordeaux, Venice, and Bilbao.
Speaking at the launch of the new summer schedule, Stephen Kavanagh, Aer Lingus (ARL)’s Chief Strategy & Planning Officer, said: “The success of our customer proposition and the development of Dublin as a gateway between Europe and North America will see us operate 24 daily departures across the Atlantic next summer.”
(ARL) has seen growth in its long-haul sector outstrip that of its European services in recent years, leading to an increase in the fleet, with an additional Airbus A330 and three leased Boeing 757-258s joining the fleet.
News Item A-3: Aer Lingus (ARL) has moved one step forward in settling its interminable dispute with current and former employees over pension entitlements, but more obstacles have now arisen on the road to a final settlement.
(ARL) announced that members of three of (ARL)’s trade unions had voted 70% - 30% in favor of a plan proposed earlier this year to accept a deal that would have seen (ARL) pump a further €50.7 million/$63 million in payments into the fund, which has a deficit of more than >€750 million.
This was the latest in a series of cash injections (ARL) has made in recent years to remedy the problem.
The settlement proposals also include freezing the pension scheme on December 31 this year and transferring both existing and new employees to a new scheme.
(ARL) said it welcomed “this clear result and acknowledges employee support for the proposed solution, which while challenging for all parties, nonetheless represents a compromise which is the only viable solution that is capable of acceptance by all sides.”
(ARL) said that it intended to convene an extraordinary general meeting in mid-December 2014 “to seek approval from shareholders to make proposed once-off payments totalling €190.7 million relating to the proposed (IASS) solution.” The figure of €190.7 million includes both an earlier proposed cash injection plus the additional €50.7 million proposed in June.
However, it is understood that the proposed settlement will result in reductions in some pensions (perhaps by as much as 20%) which has caused anger among some former employees who have not yet reached retirement age. Media reports said they feel they have been treated less favorably than those pension scheme members who are still working.
As a result, it is understood that they are preparing legal action that could derail the deal.
News Item A-4: Aer Lingus (ARL)’s shareholders will decide whether to accept a critical pension deal during an extraordinary general meeting on December 10.
(ARL) is seeking shareholder approval to plough €190.7 million/$238.3 million into its pensions scheme to resolve a deficit which represents “a real and significant risk to the success of the company.”
It believes the proposed solution, which has been under negotiation for four years, will help avoid labor conflict, give financial and legal clarity, and stabilize staff costs. “We believe that this solution, which represents a compromise by all parties, is the only solution which is capable of being implemented,” (ARL) Chairman, Colm Barrington said.
December 2014: News Item A-1: Malaysia Airlines (MAS) has made Christoph Mueller its (CEO) by Air Transport World (ATW) Editor, Karen Walker:
Aer Lingus (ARL) (CEO), Christoph Mueller, known for his airline turnaround skills, has been selected to become (CEO) of Malaysia Airlines next year.
Malaysian government investment company Khazanah Nasional, which is the majority owner of the Malaysia Airline System, said that Mueller’s contract as (CEO) at (ARL) ends May 1, 2015. “Discussions are ongoing for Christoph Mueller to assume the post at [Malaysia Airlines (MAS)] at a date prior to May 1, 2015, but no earlier than March 1, 2015,” Khazanah said.
Mueller will be nominated to the (MAS) board as a non-Executive Director and appointed (MAS) (CEO)-designate effective January 1.
A German citizen, Christoph Mueller has been (CEO) at (ARL) since 2009, turning around (ARL) from loss-making to profitable. He previously worked at Lufthansa (DLH), Sabena (SAB) and Delta Air Transport, which became Brussels Airlines (DAT)/(EBA).
“Mr Mueller has a strong record of transformation and turnarounds in the aviation industry. Among his key accomplishments, Mr Mueller has demonstrated particular strength in strategic financial and planning, as well as structural repositioning of companies in difficulties. This includes implementing change programs and adopting new technology, distribution, and retail solutions decisively,” Kzhanah said.
(MAS)’ financial difficulties have worsened through 2014 as (MAS) was struck by two major airplane losses (the disappearance of MH370 in March, and the shooting down by a surface-to-air-missile of MH17 in July). Both jet airplanes were Boeing 777s and investigations continue.
The company posted a third-quarter net loss of -RM576.1 million/-$167.7 million in what could be its last detailed quarterly earnings report for some years, highlighting the challenges facing the government as it prepares to de-list (MAS)’ shares.
News Item A-2: Flybe (BEE) and Aer Lingus (ARL) have begun code sharing on (BEE)’s services from Exeter, Inverness, Southend, and Southampton to (ARL)’s Dublin hub with access to North America and Canada.
News Item A-3: British Airways (BAB) and Iberia (IBE) parent, the International Airlines Group (IAG) has revealed that Aer Lingus (ARL)’s board has rebuffed a potential takeover attempt. In a stock exchange disclosure, the (IAG) confirmed it had “submitted a proposal” to make an offer for (ARL), but it added that this was “rejected by the board of (ARL).”
“There can be no certainty that any further proposal or offer will be forthcoming. A further statement will be made if and when appropriate,” the (IAG) added. “The board has reviewed the Proposal and believes that it fundamentally undervalues (ARL) and its attractive prospects. Accordingly, the Proposal was rejected on December 16th 2014,” (ARL) said in a stock market disclosure. “Shareholders are strongly advised to take no action.”
This is not the first time (ARL) has been courted. Ryanair (RYR) has made several attempts to acquire its fellow Irish carrier, but each of these efforts has been blocked on competition grounds. Last September, a UK Competition Commission (UKCC) investigation into these unsuccessful (RYR) bids revealed that (ARL) was looking to combine with another carrier in 2012 and has more recently explored a variety of merger and acquisition scenarios.
The annexes of this report were heavily edited, making it difficult to pin down exactly how many initiatives were under discussion, but they revealed several sets of talks relating to (ARL) acquiring, merging and forming strategic initiatives with other airlines.
(RYR) was ordered to sell its 29.8% stake in (ARL) down to 5% by the (UKCC), partly based on concerns the shareholding could jeopardize (ARL)’s consolidation with other carriers. (RYR) responded by putting its entire stake up for sale, with certain conditions. More recently, (RYR) (CEO), Michael O’Leary has bemoaned a total lack of interest in the (ARL) stake. Speaking at the release of (RYR)’s first-quarter results this summer, O’Leary said: “We’ve had depressingly received no interest in (ARL)'s stake, which has been up for sale for about 18 months.”
O’Leary said his strategy for (ARL) would be to turn it around, make it low-cost and profitable, and operate a dual-brand strategy.
News Item A-4: Aer Lingus (ARL)’s shareholders have voted in favor of a deal to address (ARL)’s pension deficit, which was previously described as “a real and significant risk to the success of the company.”
A proposal to plough €190.7 million/$237.6 million into the pensions scheme, which has taken four years to finalize, was put to shareholders during an extraordinary general meeting on December 10.
In a stock exchange disclosure, (ARL) said the motion had been passed, with 421,859,027 votes in favor and 1,942,425 against.
This rubber stamp means (ARL) can now proceed with the implementation of the (IASS) proposal, which will avoid labor conflict, give financial and legal clarity, and stabilize staff costs.
January 2015: News Item A-1: The International Airlines Group (IAG) has once again been rebuffed by Aer Lingus (ARL), despite increasing its offer from €2.30/$2.72 to €2.40 per share. “The (IAG) notes recent press speculation and confirms it submitted a revised proposal to make an offer for (ARL) on December 29, 2014, which has been rejected by the board of (ARL),” the (IAG) said. The (IAG) confirmed it had made a second cash offer of €2.40 per (ARL) share, “subject to certain pre-conditions.”
In December, the (IAG) made a tentative takeover approach for (ARL), but (ARL)’s board rejected the offer, saying it undervalued (ARL). It is widely believed the chief motive for the (IAG)’s interest is to be (ARL)’s London Heathrow (LHR) slots.
Since the initial offer, there has been increased trading in both group’s shares. Aer Lingus (ARL)’s share price had increased +17.3% to €2.26 between December 18 and January 8, while the (IAG)’s rose +7.7% to £4.79/$7.23.
In a trading update issued January 8th, (ARL) maintained its guidance for a higher full-year operating profit before exceptional items than the €61.1 million it posted in 2013.
On January 26th, however, an improved offer from the International Airlines Group (IAG) has a much likely chance of acceptance, as follows:
The (IAG) later revealed more details of its "Aer Lingus (ARL) plan."
Aer Lingus (ARL) would keep its brand and rejoin the Oneworld (ONW) Alliance if the International Airlines Group (IAG) succeeded in acquiring (ARL).
News of the tentative plans came as (ARL)’s board signaled it is now happy with the (IAG)’s latest bid proposal of €2.55/$2.86 per share. This is significant, because the (IAG) would only be willing to proceed, once this endorsement is in place.
“The [Aer Lingus (ARL)] board has indicated to the (IAG) that the financial terms are at a level at which it would be willing to recommend [to shareholders], subject to being satisfied with the manner in which the (IAG) proposes to address the interests of relevant parties,” Aer Lingus (ARL) said in a stock market disclosure.
With the approval now secured, (ARL) said it has granted the (IAG) access to perform “a limited period of confirmatory due diligence.”
The (IAG) said Aer Lingus (ARL) would operate as a separate business within the (IAG) group, with its own brand, management and operations. It will also continue to provide direct Irish flights and connectivity, supporting local investment and tourism. The (IAG) hopes to secure Irish government support for the deal.
Under its new ownership, Aer Lingus (ARL) would also rejoin the Oneworld (ONW) Alliance, which it left on March 31, 2007, and become a part of the (IAG)’s transatlantic joint venture (JV) with American Airlines (AAL).
The (IAG) plans to tap “natural traffic flows between Ireland and the USa” and Dublin’s strength as a connecting hub. This makes sense, as Dublin has a well-established USA immigration pre-clearance facility.
“The (IAG) believes that the proposal would secure and strengthen Aer Lingus (ARL)'s brand and long term future within a successful and profitable European airline group, offering significant benefits to both (ARL) and its customers,” the (IAG) said in its own disclosure. The plan was “noted” by the Aer Lingus (ARL) board.
British Airways (BAB) and Iberia (IBE) parent, the (IAG) made an initial €2.30 per share takeover approach on December 16, but the Aer Lingus (ARL) board said this undervalued (ARL). On December 29th, it increased its proposal to €2.40 per share, which was again rejected. This latest bid of €2.55 per share was announced on January 26.
The €2.55 per share proposal remains subject to Ryanair (RYR) and the Minister for Finance of Ireland accepting the offer and due diligence.
Later, British Airways (BAB)/Iberia (IBE) parent company, the International Airlines Group (IAG) said its offer for Aer Lingus (ARL) would “secure and strengthen (ARL)’s long-term future,” and is proposing legally binding commitments to that end.
The Irish government is lukewarm to the proposed (IAG) acquisition and is calling for cast-iron guarantees regarding (ARL)’s regional domestic services, before it considers approving the deal.
The (IAG) is offering the legally binding commitments “to secure the support of the Irish government.”
The proposed commitments would ensure that, without explicit Irish government agreement, the (ARL) name, head office location or place of incorporation in the Republic of Ireland, could not be changed; and (ARL)’s 23 slot pairs at London Heathrow (LHR) could not be sold, including to other (IAG) airlines.
The (IAG) said it would also operate the slots on Irish routes for five years (“protection that the government does not have today,”) the group said.
(IAG) (CEO), Willie Walsh said: “We are committed to maintaining and strengthening Aer Lingus (ARL). We want to develop air services that ensure Ireland’s connectivity is enhanced. In seeking the support of the Irish government, we propose to offer it legally binding commitments that go well beyond the protections currently available to it. These commitments would give the Irish government an important role that they do not have today in securing the future of Aer Lingus.”
The commitments and giving greater powers to the Irish government will be subject to Irish Takeover Rules and EU competition review, following consultation with IAG.
IAG has already said that Aer Lingus would continue operate as a separate business with its own brand, management and operations; join the oneworld alliance; and be part of the joint business that IAG operates over the North Atlantic with American Airlines. IAG said Dublin was advantageously positioned geographically to leverage natural traffic flows between Ireland and the US, especially since the implementation of US immigration pre-clearance.
The Aer Lingus board has recommended IAG’s latest and third offer, made Jan. 27, which is made up of a cash payment of €2.50 ($2.83) per share, payable upon completion, in addition to an ordinary dividend of €0.05 per share.
Ireland’s IMPACT trade union, which represents pilots, cabin crew and some ground staff at Aer Lingus, said IAG’s commitments about the future were “unconvincing.”
IMPACT national secretary Matt Staunton said they would “do very little to ease the concerns of the growing number of stakeholders opposed to the potential takeover.”
He said: “What really stands out in the statement by IAG is the complete absence of any reference to jobs. We’ve highlighted a substantial risk of job losses at Aer Lingus if it’s acquired by IAG. There’s nothing in IAG’s statement that lessens our concerns about Aer Lingus jobs. The opposition to the sale of the State’s share in Aer Lingus has developed to the point where trade unions, chambers of commerce, the tourism industry and multinationals trading in Ireland have all voiced their opposition to this takeover proposal.”
News Item A-2: Aer Lingus (ARL) (CEO), Christoph Mueller will step down February 28 to take up his new role as (CEO) of Malaysia Airlines (MAS), accelerating the end of his original contract.
Last month, Malaysian government investment company Khazanah Nasional, which is the majority owner of the Malaysia Airline System (MAS), named Mueller as (MAS)'s next (CEO). At the time, Khazanah Nasional said Mueller would take up his new role between March 1 and May 1.
Mueller has led (ARL)Aer Lingus since 2009 and his contract committed him until May 1, 2015. However,(ARL) has now confirmed February 28 as Mueller’s departure date. “Mr Mueller will continue as (CEO) working with the board and executive management team in the period to February 28, 2015 to ensure a seamless and successful transition,” (ARL) said in a stock market disclosure.
Effective immediately, (ARL) Chairman, Colm Barrington has taken responsibility for “strategic matters” and will lead (ARL) on an interim basis if Mueller’s successor is not in place by March 1.
Barrington is taking strategic control of (ARL) at an interesting time. Last month, British Airways (BAB), Iberia (IBE) and Vueling (VUZ) parent, the International Airlines Group (IAG) made a tentative takeover approach for (ARL), but (ARL)’s board rejected the offer, claiming it undervalued the airline.
Since then, there has been increased trading in both group’s shares. (ARL)’s share price has increased +17.3% to €2.26, while the (IAG)’s has risen +7.7% to £4.79. The (IAG), which would benefit from (ARL)’s London Heathrow (LHR) slots, is widely expected to make another approach (see above).
Aer Lingus (ARL) maintained its guidance for a higher full-year operating profit before exceptional items than the €61.1 million it posted in 2013. Taking advantage of favorable fuel prices, (ARL) has also increased its hedging from 50% to 90% of its 2015 requirements, averaging out at $830 per metric tonne. It is also 24% hedged for 2016. “The lower average fuel cost, in addition to the positive effects of staff cost stabilization achieved through the (IASS) pension solution and further efficiency measures, will contribute positively to the group’s 2015 results,” it said in a stock market disclosure, but it cautioned that these gains could be partially offset by negative USA dollar to euro exchange rate changes.
The International Consolidated Airlines Group (IAG) has promised to maintain Aer Lingus (ARL)’s London Heathrow - Cork and - Shannon services for a minimum of five years, if it succeeds in acquiring the Irish carrier.
News Item A-3: A330-202 (330, EI-EWR), ex-(9M-XAD), AerCap (DEA) leased.
February 2015: News Item A-1: Takeover target Aer Lingus (ARL) reported a net loss of -€95.8 million/-$108.7 million for 2014, reversing the -€34.1 million net profit it posted in the year-ago period, but this was driven by exceptional labor and pensions items.
“Commercial initiatives, in addition to cost control, led to the highest operating profit since the financial crisis and +17.8% above last year,” Aer Lingus (ARL) outgoing (CEO), Christoph Mueller said. “Now that the complex (IASS) pension funding issues have been addressed, we are re-launching our (CORE) program, starting with the introduction of a new voluntary severance scheme at the beginning of this year.”
In 2015, Aer Lingus (ARL) will seek cost reductions totaling €40 million under (CORE), an increase of +€10 million compared with the original target of €30 million announced in early 2014.
Revenue rose +9.2% to €1.6 billion, while operating expenses lowered -8.9% to €1.5 billion, producing an operating profit before exceptional items of +€72 million, up +17.8% from a +€61.1 million operating profit in the prior-year. However, €180.3 million in exceptional items swung Aer Lingus (ARL) to a -€108.4 million operating loss.
During 2014, (ARL)’s passenger numbers exceeded 11 million for the first time. Traffic rose +8.7% to 16.1 billion (RPK)s on a +7.8% increase in capacity to 20.4 billion (ASK)s, producing a load factor of 79% LF, up +0.6 point. Average fare revenue per seat was €98.93, up +9.4%.
Long-haul was particularly strong with revenue up +28.4% at €490 million, passenger numbers up +20.6% and load factor up +0.6 points to 83.7% LF, boosted by Aer Lingus (ARL)’s transatlantic expansion. (ARL) added +23.8% more capacity over the Atlantic in 2014, including extra Shannon-based services to Boston and New York in February and March 2014, as well as new long-haul services to San Francisco and Toronto in April 2014.
Short-haul was “resilient in a highly competitive environment,” (ARL) said. Short-haul average fare per seat was up +2.5% at €69.60 on steady load factors, while revenue rose to €791.0 million compared with €789.0 million in the previous year. “Our performance in 2014 was strong, with significant growth in long-haul and resilient short-haul operations. To enhance these excellent results and to accelerate (ARL)’s growth, it is the board’s strong belief that the company should now take the opportunity to combine with the (IAG),” Aer Lingus (ARL) Chairman, Colm Barrington said.
Between 2018 and 2020, (ARL) will take delivery of nine Airbus A350-900s, which will progressively replace its A330s and expand its long-haul capacity. Given the ongoing takeover talks, (ARL) has not issued any financial guidance for 2015.
News Item A-2: Ryanair (RYR) plans to petition the UK’s Supreme Court following a lower court’s dismissal of its appeal against a directive to sell down its 29.8% stake in Aer Lingus (ARL) to 5% on competition grounds.
It said the case raised important human rights issues, adding the directive had been fatally undermined by International Airlines Group (IAG)’s bid for Aer Lingus (ARL).
(RYR) had taken the case to the UK Court of Appeal, arguing it should not have to divest itself of shares. It was the latest stage in the long-running legal tale over (RYR)’s major stake in the Irish flag-carrier (ARL).
(ARL) welcomed the Court of Appeal’s decision, noting it was the third time the court had dismissed attempts by (RYR) to block the original decision by the UK Competition Commission (now renamed the Competition & Markets Authority, (CMA)).
(RYR) said it would now appeal the case to the UK’s highest court “as it raises human rights issues of significant public importance, including the scope of protection offered to businesses by the right to property. In parallel, (RYR) has requested a formal review by the (CMA) of its Final Report, and a withdrawal of the divestment remedy, in light of the recent offers by the International Airlines Group (IAG) for (ARL), which fully disprove the theories and unsubstantiated evidence on which the Final Report was based,” it said.
“The (CMA) speculated in its Final Report that (RYR)'s 29% shareholding would deter other airlines from merging with or bidding for (ARL). Clearly, the (IAG)’s recent offers demonstrate that the (CMA)’s findings were wrong and that its divestment remedies must be revoked in light of this compelling evidence.
“While we note the Court of Appeal's ruling, this judgment ignores the fact that the (CMA)’s Final Report was based on fanciful hypotheses, secretive ‘evidence’ and unsubstantiated assumptions,” (RYR) spokesman Robin Kiely said.
A trade union group representing (ARL) workers has reversed its position and said it will now back a takeover approach by the (IAG) after the British Airways (BAB)'s owner laid out its growth plans for (ARL).
(ARL)'s board recommended the EUR1.36 billion offer from the International Consolidated Airlines Group last month, subject to the Irish state selling its 25% stake, but political and trade union opposition has been significant.
(ARL) Central Representative Council (a grouping of staff representatives from the company's trade unions) said last month that a sale could have a devastating effect on employment and lead to up to -1,200 job cuts.
However, it said it had changed its stance after the (IAG)'s Dublin-born (CEO), Willie Walsh, who began his career as an Aer Lingus (ARL) pilot (FC), told a parliamentary committee that job cuts would be minimal and be far exceeded by new roles as it expands (ARL)'s fleet.
"The danger of this going away is that the company could eventually go into a downward spin and who knows going forward, what would happen if that was the case," (CRC) Secretary, Myles Worth told national broadcaster (RTE).
"There doesn't seem an immediate threat to the company, but if this bid was to fail and the share price goes down, there's a likelihood that the new (CEO) would have to put together a very aggressive cost-cutting plan."
Senior government ministers have said they are not yet convinced on the merits of selling, as a government-appointed group prepares a report on its options. Resistance is especially strong among members of the junior coalition partner the Labor Party ahead of tough elections next year.
But one senior member of the center party, which has close trade union links, said that the state should sell. "Before we heard from Walsh, my tentative disposition was not to sell," Pat Rabbitte, a former Labor leader and Minister before a reshuffle last year, wrote in the "Sunday Business Post" newspaper.
"I appreciate that the (IAG) may not seem the best option for government colleagues (but) the best option, I suspect, is to do business with Willie Walsh and the (IAG)."
News Item A-3: Aer Lingus (ARL) has named its Chief Strategy & Planning Officer, Stephen Kavanagh as its new (CEO), replacing Christoph Mueller who is leaving to take the top spot at Malaysia Airlines (MAS).
Mueller steps down February 28 and Kavanagh will take up his new role March 1, leading (ARL) as it faces a potential acquisition by British Airways (BAB) parent company, the (IAG).
Kavanagh has been with (ARL) since 1988. He held a number of operations and commercial roles before becoming a company executive in 2006. He was part of the Initial Public Offering (IPO) team and became (CCO) in 2009, before taking on his most recent role as Chief Strategy & Planning Officer.
“Stephen has worked in (ARL) for over >26 years in a range of increasingly challenging roles and he has a commanding knowledge of both the company and the industry. I am particularly pleased that it has been possible and appropriate for an internal (ARL) executive to succeed to the position of (CEO). Stephen has been a key member of the executive team that, over the last five years, has transformed (ARL) into a strong, profitable airline with a resilient business model and an improved cost base,” (ARL) Chairman Colm Barrington said.
News Item A-4: Aer Lingus (ARL) is considering the A321neo Long Range for transatlantic operations (ARL) revealed in a presentation for its 2014 financial results.
(ARL) said the type represents "an opportunity" for (ARL) both in terms of augmenting as well as ultimately replacing its fleet of three leased Air Contractors 757-200s currently used on transatlantic flights to the USA.
On its launch in January this year, Airbus Industrie (EDS) said the A321neo LR would offer a maximum takeoff weight of 97 metric tons with the possibility of flying 206 passengers up to 4,000 nautical miles, making it the longest-range single-aisle airliner on the market.
The Europeans hope to deliver 1,000 airplanes of the type beginning 2019 onwards.
April 2015: News Item A-1: Virgin Atlantic (VAA) has expressed concerns that the proposed takeover of Aer Lingus (ARL) by the International Airlines Group (IAG), parent company of Iberia (IBE), Vueling (VUZ) and British Airways (BAB), will diminish competition.
News Item A-2: Aer Lingus Regional re-started operations on the 336 km airport pair between Dublin (DUB) and East Midlands (EMA) on April 2nd following an 18-year hiatus - - SEE PHOTO - - "ARL-2015-04 - E MIDLANDS TO DUBLIN.jpg." The new route that is already operated by Ryanair (RYR)’s daily flights will be served by Aer Lingus Regional with nine weekly departures, using a mixed fleet of Stobart Air’s 48-seat ATR42s and 72-seat ATR72s. The new route connects East Midlands with one of Europe’s busiest airports and means that the airline is now servicing 27 of the main destinations in the UK and Ireland.”
News Item A-3: Aer Lingus (ARL), UK leisure carrier Jet2 (JT2) and Eastern European budget carrier, Wizz Air (WZZ) are facing legal action by the UK Civil Aviation Authority (CAA) for breaching consumer law.
The UK regulator says it is stepping in “to safeguard the rights of millions of passengers” following a six-month review of airline policies in relation to supporting passengers during disruption. This includes their approaches to paying flight delay compensation and the provision of information about passengers’ rights.
The (CAA) said this review “has already resulted in a number of airlines changing their policies,” but that, despite extensive discussions, some airlines have yet to make the required changes.
The (CAA) said (JT2) and (WZZ) “have failed to satisfy the (CAA) that they are consistently paying compensation for disruption caused by technical faults,” despite the Court of Appeal (Jet2 (JT2) v Huzar) clarifying that airlines must do so. (JT2) and (WZZ) are also imposing two-year time limits for passengers to take compensation claims to court, despite the Court of Appeal ruling (Dawson v Thomson Airlines) that passengers should have up to six years to take a claim to court.
(WZZ)’s spokesman, Daniel de Carvalho said, “The (UK) (CAA) is well aware that (WZZ) is reassessing these cases, and has confirmed to the (UK) (CAA) itself, some time ago, that it will apply the (UK) (CAA)’s own list of extraordinary circumstances in the relevant cases. This is not the only area where the (UK) (CAA)'s press release and reports are materially inaccurate. (WZZ) further confirms that claims can be raised within two years after the flight disruption, in line with its general conditions of carriage agreed to by customers at the time of booking, an approach which has been upheld by the English courts.”
In addition, the (CAA) said that (JT2) and (ARL) had failed to supply “satisfactory evidence” that they proactively provide passengers with information about their rights during disruption in line with the requirements set out in European Commission (EC) regulation (EC261).
The three airlines must implement the changes set out by the (CAA), or face the prospect of a court order.
(CAA) (CEO), Andrew Haines said: “Airlines are well aware of the support they must provide when there is disruption and passengers have every right to be disappointed that a small number of airlines are not complying with the Court of Appeal rulings, and continue to let people down in this way. Our job is not done until all airlines can demonstrate they are providing care, assistance and compensation as required by law. While we have no power to secure redress for individual consumers, we are determined to stand up for passengers, and are taking this action to safeguard their rights, making sure all airlines consistently provide their passengers with the support and compensation they are legally entitled to.”
The (CAA) said it also had concerns about the way Ryanair (RYR) was assessing some passenger claims, and was therefore reviewing (RYR)’s approach to assessing passenger claims for flights disrupted by technical faults.
The (CAA)’s review looked at the policies of the 15 airlines operating in the UK with the highest passenger figures, accounting for more than >80% of the UK’s aviation market. The other airlines included were British Airways (BAB), easyJet (EZY), Emirates (EAD), FlyBe (BEE), (KLM)-Air France (AFA), Lufthansa (DLH), Monarch (MON), Thomas Cook (JMA)/(GUE), Thomson Airways (ATZ)/(TFY), United Airlines (UAL), and Virgin Atlantic (VAA).
The review was carried out as part of a new enforcement approach that places the onus of compliance on airlines, with the (CAA) targeting enforcement resources, specifically at problem areas.
May 2015: News Item A-1: The Irish government is to sell its 25% stake in flag carrier, Aer Lingus (ARL) to British Airways (BAB) owner, the International Airlines Group (IAG), the Transport Minister said on May 26th. "Following detailed consideration of all the issues surrounding a potential disposal of the State's shareholding in (ARL), the Government has decided that it will support the (IAG)'s proposal," Minister Paschal Donohoe said.
Ryanair (RYR) is remaining tight-lipped on whether it is willing to sell its 29.8% Aer Lingus (ARL) stake to the International Airlines Group (IAG).
The International Airlines Group (IAG) will make a €1.4 billion/$1.5 billion formal takeover bid for Aer Lingus (ARL), after winning crucial backing from the government of Ireland and (ARL)’s board.
The (IAG) has been courting (ARL) since last December, culminating in a third takeover proposal of €2.55/$2.78 per share in January. Unlike the two earlier approaches, this received a favorable response from (ARL), but was conditional on the (IAG) securing support from (ARL)’s two key shareholders: the government of Ireland and (RYR).
Late May 26th, the (IAG) announced it had agreed “the terms of a recommended cash offer” with both the Irish government and (ARL) by signing a transaction agreement which “contains certain assurances” for the future of (ARL).
The (IAG) has given “cast-iron guarantees” on (ARL)’s London Heathrow (LHR) slots, protected by a single "B" share which will be held by the Irish government. Aer Lingus (ARL) will maintain its current seasonal frequencies to Dublin, Cork, and Shannon for at least seven years and its other Heathrow - Ireland links for at least five years. (ARL) will now convene an (AGM) to approve the connectivity resolutions.
“The independent (ARL) Directors intend unanimously to recommend that (ARL) shareholders accept the offer,” the (IAG) said. “The government of Ireland has stated that it supports the offer and the Minister for Finance of Ireland has confirmed that the general principles of the disposal of his shares in (ARL) will be laid before Dáil Éireann [the lower house of the Irish Parliament] for approval.”
Later, the lower house of the Irish Parliament, Dáil Éireann, gave the Irish government the green light to sell its stake in Aer Lingus (ARL) to the International Airlines Group (IAG).
(RYR) said it was waiting on a formal approach from the (IAG), adding that it would consider any deal on its merits. The offer document will be sent to shareholders within 28 days. To succeed, the offer must be backed by at least 90% of (ARL) shareholders, which means that Ryanair (RYR)’s buy-in will be pivotal. It will also require competition clearance from the European Commission (EC).
Both (IAG) (CEO), Willie Walsh and (ARL) Chairman, Colm Barrington described the deal as “compelling,” adding that it will provide stronger transatlantic and regional connectivity for both (ARL) and the (IAG). “The company [(ARL)] will reap the commercial and strategic benefits of being part of the much larger and globally diverse (IAG) Group,” Barrington said.
Willie Walsh confirmed the "Aer Lingus" brand and its Irish head office will be retained. The (IAG) plans to develop Dublin as a transatlantic hub and Aer Lingus (ARL) will re-join the oneworld (ONW) alliance under its new ownership.
“(ARL) would add a fourth competitive, cost effective airline to the (IAG), enabling us to develop our network using Dublin as a hub between the UK, continental Europe and North America, generating additional financial value for our shareholders,” Walsh said.
The offer for 100% of (ARL) will be made by (AERL) Holding, a wholly owned (IAG) subsidiary, which has been created for the takeover. The directors of (AERL) Holding are Walsh, (IAG) (CFO), Enrique Dupuy and (IAG) General Counsel, Chris Haynes. (AERL) Holding plans to delist (ARL) from the Irish and London stock exchanges and re-register it as a private company.
The (IAG) operates a combined fleet of 459 airplanes, handling over >77 million passengers and 897,000 tonnes of cargo across its three carriers, British Airways (BAB), Iberia (IBE) and Vueling (VUZ). Iberia (IBE) will add a fleet of 48 Airbus airplanes and three Boeing 757s to the group. Together with its regional franchise operation, (ARL) carried over >11.1 million passengers in 2014, generating a €1.6 billion turnover.
June 2015: News Item A-1: The International Airlines Group (IAG), currently in the midst of an attempt to acquire Aer Lingus (ARL), has offered concessions to the European Commission’s (EC) competition authorities in its efforts to gain approval for the bid.
A brief note on the competition section of the (EC) website said “remedies” were offered by the (IAG), parent group of British Airways (BAB) and Iberia (IBE), in connection with its proposed takeover.
The deadline for the (EC)’s decision on whether to allow the bid has also been pushed back by two weeks, to July 15.
Rivals to (BAB) have raised concerns about the threat to competition if the takeover is allowed.
“The (IAG)’s engagement with the (EC) is ongoing and it would be inappropriate to comment further at this stage,” an (IAG) spokeswoman said when asked about the nature of the proposed concessions.
Concessions in such cases can take several forms, such as an offer by the acquiring airline to give up a certain number of slots to rivals. The (IAG) has already said it will maintain Aer Lingus (ARL)’s brand, management and connectivity to the UK.
Dublin airport, (ARL)’s base, is becoming an increasingly attractive jumping-off point for westbound transatlantic passengers from the UK, who can avoid London’s crowded London Heathrow (LHR) airport. Dublin also has a USA immigration pre-clearance facility, which means that passengers effectively arrive in the USA without having to negotiate the frequently lengthy immigration queues at USA airports.
The (IAG) has been trying to take over (ARL) since late last year. It received approval last month from the Irish government, which holds 25% of Aer Lingus (ARL)’s shares, for its bid.
The other remaining hurdle to the (IAG) bid is Ryanair (RYR)’s 29.8% stake in (ARL). The (IAG) has said it does not wish to have a large minority shareholder; the UK competition authorities have been trying for some years to force (RYR) to sell down its shares to 5% of the total, with (RYR) furiously resisting in the courts. (RYR) has previously said it would look at any bid for its shares from an acquiring part on its merits.
News Item A-2: "Ryanair (RYR) to Sell Aer Lingus (ARL) Stake to Rival the (IAG) Group" By Shawn Pogatchnik, "AP" July 10, 2015.
(Ryr) has agreed to sell its shares in Irish rival Aer Lingus (ARL) to the (IAG), putting the British Airways (BAB) parent solidly on course to acquire (ARL), the former Irish national airline.
(RYR) (CEO) Michael O'Leary said July 10 that (RYR)'s board has voted unanimously to sell its nearly 30% stake in (ARL), formally ending (RYR)'s own nine-year effort to seize (ARL). British and European competition authorities had repeatedly blocked (RYR)'s effort and ordered (RYR) to divest itself, but O'Leary still was fighting those rulings in various courts.
O'Leary called the (IAG) offer "a reasonable one in the current market" that would allow (RYR), Europe's fastest-growing airline, to record "a small profit."
The International Airlines Group (IAG) unveiled its EUR1.3 billion/US$1.45 billion takeover bid for (ARL) in January. The bid now has won acceptance from all three key investors: top shareholder (RYR); (ARL)'s own board; and the Irish government, which retained a 25% stake, when it privatized (ARL) in 2006.
The (IAG), which also owns Spain's Iberia (IBE) airline, had made its takeover bid conditional on acceptance by (RYR). It offered no immediate reaction to (RYR)'s decision.
Grass-roots shareholders are expected to back the offer at a Dublin extraordinary general meeting July 9. The deal still requires approval by European Union (EU) competition regulators.
The (IAG) already has agreed to a package of concessions to Irish interests to win support from the government. These include giving the government an indefinite right to veto the sale of (ARL)'s strategic landing slots at London's Heathrow Airport (LHR) and a guarantee that those slots will be used to operate Irish routes for at least the next seven years.
(ARL) owns the fourth-most slots at (LHR), Europe's busiest hub. Industry analysts have estimated their value alone at EUR450 million/US$500 million.
The (IAG) also has pledged to increase trans-Atlantic traffic operating from Ireland, boosting tourism and business opportunities for the island nation, which is heavily dependent on air links.
(IAG) (CEO), Willie Walsh, a Dubliner, previously held the same position at (ARL).
Shares in (RYR) and the (IAG) rose more than >2% July 10, while (ARL) rose more moderately to (IAG)'s bid price of EUR2.50/US$2.80 per share.
Later, The European Commission (EC) approved the International Airlines Group’s (IAG) acquisition of Aer Lingus (ARL), subject to the carriers surrendering five slot pairs at London Gatwick Airport.
Detailing its conclusions, the (EC) said it required “significant concessions” on routes from London to Dublin and Belfast for the tie-up to go ahead. “The (EC) had concerns that the merged entity would have faced insufficient competition on several routes,” the (EC) said, identifying Dublin - London, Belfast - London and Dublin - Chicago as the main competition pinch points for the deal.
To appease the regulator, the (IAG) offered to give up five daily Gatwick slot pairs to its rivals. Two of these five daily slots must be used to serve Dublin, while a third is reserved for Belfast flights. The remaining two pairs can be used for either Dublin or Belfast.
The (EC) also insisted that (ARL) must continue to accept rival airlines’ connecting passengers at Amsterdam, Dublin, Gatwick, Heathrow, Manchester, and Shannon.
“These commitments adequately address all competition concerns identified by the (EC). The (EC) therefore concluded that the proposed transaction would not significantly impede effective competition in the European Economic Area (EEA) or a substantial part of it,” the (EC) concluded.
The (IAG) issued a brief statement, confirming the remedies and welcoming the ruling. This marks another major milestone for the takeover, following (RYR)’s recent confirmation that it is willing to sell its (ARL) shares to the (IAG).
July 2015: Aer Lingus (ARL) reported a first-half net loss of -€12.6/-$13.9 million, marginally widened from the -€12.3 million deficit for the year-ago period.
First-half revenue was up +7.4% at €749 million, compared to €697.2 million year-over-year, with (ARL) experiencing what it described as strong growth in passenger fares, retail and cargo. (ARL) is benefiting from Ireland’s recovering economy, which is expected to have a +4% rise in Gross Domestic Profit (GDP) this year. The first six months are traditionally the weaker half of the year for (ARL).
The first-half results are expected to be the last set of financial figures (ARL) will issue as an independent entity. The International Airlines Group (IAG) is in the final stages of acquiring (ARL), with the deadline for acceptances of the (IAG) offer due July 30.
(ARL) said results suffered in the first half due to the weakening of the euro against both the USA dollar and sterling, but this effect is likely to be lessened over the summer season through a higher proportion of dollar-denominated revenue.
Overall capacity grew +3% in the first half to 9.83 billion (ASK)s. Short-haul capacity dropped -4.2%, following planned reductions, but capacity on (ARL)’s long-haul routes (almost entirely transatlantic) increased strongly +13.9%.
The long-haul business benefited from a full six months’ trading on the Dublin to San Francisco and Toronto routes, launched last year, while the new Washington DC sector, launched two months ago, is expected to provide a further boost to passenger numbers.
(ARL) said its business (C) cabin continued to perform strongly. Investment in its long-haul fleet had been well received with its A330s now equipped with lie-flat seats.
Frequencies will be increased on the Washington, New York, Boston, Chicago, San Francisco, and Toronto routes over the key winter 2015/2016 holiday periods, contributing to a +13% increase in winter capacity compared with the previous year.
In the short-haul sector, a new premium product is due to be rolled out later this year. There will not be a separate cabin, but middle seats at the front of the airplane will be blocked off to allow what (ARL) described as time-sensitive passengers to increase their productivity while the airplane is on the ground. They will also have priority luggage space.
August 2015: News Item A-1: "The (IAG) Seals Deal for Aer Lingus (ARL)" by (ATW) Anne Paylor, August 18, 2015.
British Airways (BAB) owner, the International Airlines Group (IAG) has confirmed its deal to acquire Aer Lingus (ARL) after Ryanair (RYR) formally agreed to sell its 30% share in Aer Lingus (ARL).
(RYR) agreed in July to sell its 29.8% (ARL) stake to the (IAG), but said it would not issue a formal acceptance of the offer until mid-August, forcing the (IAG) twice to extend the share offer deadline. (RYR)’s acceptance was a condition of the (IAG)’s bid for (ARL), and the offer is now wholly unconditional as all the conditions have been satisfied.
(IAG) (CEO), Willie Walsh said: “We’d like to welcome Aer Lingus (ARL) into the (IAG). It will remain an iconic Irish brand with its base and management team in Ireland, but will now grow as part of a strong, profitable airline group. This means new routes and more jobs benefitting customers, employees and the Irish economy and tourism."
By 13.00 on August 18, the (IAG) had received valid acceptances of the offer for 95.77% of the existing issued share capital of (ARL). The offer will remain open until September 1 for any (ARL) shareholders who have not yet accepted.
(ARL) will apply for cancellation of its share listings and trading of (ARL) shares on the Irish Stock Exchange and London Stock Exchange, expected to become effective on September 17. Any outstanding shares will then be acquired compulsorily and (ARL) re-registered as a private company.
September 2015: News Item A-1: The International Airlines Group (IAG) has acquired Aer Lingus (ARL) after shareholders, representing 98.05% of the Irish carrier, signed up to sell their stakes to takeover vehicle (AERL) Holding Limited.
“As at 1500 Irish time on September 1, 2015, (AERL) Holding Limited, the wholly owned subsidiary of (IAG), had received valid acceptances of the offer for 529,779,029 Aer Lingus (ARL) shares, representing 98.05% of the existing issued share capital of (ARL),” the (IAG) said in a stock market update released September 2.
The (IAG) declared its offer closed and said payment for the (ARL) shares will be released within 14 days. It added that (IAG) (CEO), Willie Walsh has become a non-executive director of (ARL), following the (IAG)’s acquisition of the Irish carrier.
(ARL) announced the resignation of 10 directors: Colm Barrington, Montie Brewer, Laurence Crowley, Emer Gilvarry, John Hartnett, Nigel Northridge, Frank O’Connor, Nicola Shaw, William Slattery and Nicolás Villén. It said the resignations took immediate effect, “subsequent to acquisition by the (IAG).”
October 2015: News Item A-1: The International Airlines Group (parent company of British Airways (BAB), Iberia (IBE), Vueling (VUZ) and Aer Lingus (ARL)) reported a third-quarter net profit of +€883 million/+$992.8 million, up +39.3% compared to a net profit of +€634 million for the same period last year. The figures do not include exceptional charges of €38 million related to (IAG)’s acquisition of Aer Lingus (ARL).
The profit figures were reached on total revenue of €6.76 billion, up +15.2% on the year-ago figure of €5.87 billion.
The third quarter’s results were the first to include a contribution from Aer Lingus (ARL), which the (IAG) acquired in August.
Operating profits for the quarter to September 30 climbed to €1.25 billion, an improvement from last year of €350 million, including Aer Lingus (ARL) and €305 million better, excluding (ARL).
Breaking down the group’s operating profits by individual airline, (BAB) recorded a figure of £589 million compared to £484 million for the same period last year; (IBE) made a profit of +€200 million, up from +€162 million, and (VUZ) showed a positive figure of +€178 million (2014: +€140 million). (ARL)’s operating profit was +€45 million from August 18, the date of acquisition.
The (IAG) expects to generate an operating profit for the full year of +€2.25 to +€2.3 billion, excluding (ARL). This figure is marginally up on previous guidance. “We’re reporting strong quarter results with a positive contribution from all of our airlines,” commented (IAG0 (CEO), Willie Walsh.
“Our passenger unit revenue showed a better trend than in the second quarter of the year and our cost performance remained strong,” Walsh said. “Aer Lingus (ARL) made an operating profit of +€45 million since it joined the (IAG) on August 18. While the airline’s profitability is seasonal, (ARL) is cost-effective and provides a natural gateway to build our business between Europe and North America. It’s a great asset for the group.”
He added that the (IAG) would make its first dividend payment (of 10 euro cents per share). “For the full year, we expect to pay out 25% of our underlying profit after tax in dividends, and plan to announce a proposal for a final dividend for 2015, when the full-year results are published.”
Both the (IAG)’s revenue and cost figures have been favorably affected by the strength of the USA dollar and sterling, two of the most significant currencies in its operations.
Walsh noted (IBE)’s figures are expected to improve further as the Spanish carrier’s transformation process continues. Changes to its management structure means it is now much more nimble in taking advantage of rapidly changing tactical situations in the marketplace.
Growth in the quarter had come from all parts of the group; Iberia (IBE), for example, had restored some previously ditched routes, such as Madrid - Havana, and opened new ones, such as Madrid - Cali, while (BAB) opened up London Heathrow - Kuala Lumpur.
News Item A-2: Aer Lingus (ARL) commenced two new routes from Dublin (DUB) on October 23 and 25, respectively, with the first destination to be launched being Liverpool (LPL), while services to Berlin Tegel (TXL) launched on the latter date, replacing current services to Berlin Schönefeld. Both will be served by (ARL)’s A320s. Passengers from across the Liverpool City Region now have the opportunity to fly to Dublin and on to the USA with all the convenience of departing from their local airport, safe in the knowledge that on arrival in the USA, they will be able to avoid the often lengthy immigration queues that can add an hour or more to the total journey time.”
Services to Liverpool will operate 15x-weekly, while service to Tegel will operate 12x-weekly. This is not in fact the first time that (ARL) has operated to Liverpool. (ARL) connected the two cities between October 27, 2004 and June 25, 2006. In terms of competition, Ryanair (RYR) connects Dublin and Berlin Schönefeld with 9x-weekly flights, while (ARL) also flies 23x-weekly between Dublin and Liverpool.
November 2015: News Item A-1: "Vueling (VUZ) (CEO) Named Next British Airways (BAB) Chief."
The International Airlines Group (IAG) has named Vueling (VUZ) (CEO), Alex Cruz as the next Chairman and (CEO) of British Airways (BAB), succeeding Keith Williams who will retire April 2016. Vueling (VUZ) is an airline member of the (IAG).
News Item A-2: The "The (IAG) Converts Options on Four Airbus A330s, 15 A320neos" by (ATW) Victoria Moores, November 5, 2015.
The International Airlines Group (IAG) has converted options on two Airbus A330-300s for Aer Lingus (ARL), two A330-200s for Iberia (IBE) and 15 A320neos for use across the group.
Announcing the deal November 5, the (IAG) said it had negotiated “a substantial discount” from the list price. “The modern, fuel efficient aircraft will bring both cost efficiencies and environmental benefits to the airlines,” the (IAG) said.
(ARL) will receive its two A330-200s in 2016 and the two Airbus 330-300s will be delivered to (IBE) between 2017 and 2018. The A330s, which finalize options from the (IAG)’s September 2014 order, will be used to expand the two airlines’ long-haul fleets.
The A320neo options have been firmed up from an order originally placed in August 2013. “These aircraft will be delivered between 2018 and 2021 and can be used by any airline in the Group for fleet replacement,” (IAG) said.
February 2016: News Item A-1: The International Airlines Group (IAG) (parent company of Aer Lingus (ARL), British Airways (BAB), Iberia (IBE), and Vueling (VUZ)) reported a +51.5% rise in 2015 net profit to +€1.52 billion/+$1.66 billion, compared to +€1 billion in 2014. Full-year revenue was up +13.3% at €22.8 billion compared to €20.1 billion last time.
In capacity, (ASK)s rose +8.2% to 272.7 billion (of which +3.2% came from the inclusion of the Aer Lingus (ARL) fleet) and load factor rose +1% to 81.4% LF, while (RASK)s rose +5.4% to 7.46 euro cents. Passenger numbers were up +14.2% at 88.3 million compared to 77.3 million last time.
Fuel costs for the year before exceptional items dropped -6.3%, while non-fuel costs before exceptional items were up +4.3%.
“We’re reporting very strong full year results,” (IAG) (CEO), Willie Walsh said. “These results are in line with our recent target and have exceeded our original 2015 operating profit target of +€1.5 billion that we set in 2011. “It’s undoubtedly been a good year, but it’s also been challenging, with extreme volatility in the currency and fuel markets. The benefits we gained from lower fuel prices have been partially offset by the stronger USA dollar.”
(IAG) completed the acquisition of (ARL) over the summer and Walsh (a former (ARL) (CEO)) said the Irish flag carrier had made a positive contribution of +€35 million since it formally joined the group on August 18, 2015.
(IAG) said that Iberia (IBE), which for the early years of the consortium was a notable drag on the group, had made “significant progress on its “Plan de Futuro,” improving its cost base and recovering routes previously withdrawn. The turnaround of (IBE) is leading to a profitable and efficient new airline capable of growing in its strategic markets and starting to achieve positive returns for the Group, with a positive after-tax profit of +€155 million.”
In 2016, the (IAG) anticipates it will generate an absolute operating profit increase similar to that in 2015, when it leapt +68% before exceptional items. Revenue trends for (1Q) 2016 “appear broadly in line with those experienced in quarter four 2015.”
News Item A-2: Despite strong competition from Ryanair (RYR), Aer Lingus (ARL) has hardly been a failing airline. It has registered decent profits using a niche strategy. But following last year’s takeover by the International Airlines Group (IAG) and with new-technology aircraft soon available, (ARL) sees much greater growth potential, particularly on transatlantic routes.
“We had a robust, independent business case,” (CEO), Stephen Kavanagh said in his modest office, adjacent to an Aer Lingus (ARL) maintenance hangar at Dublin Airport. “But we would not have been able to grow as fast. We would have been successful but smaller.”
Now (ARL) is looking at accelerated growth. In the third quarter of 2015, traffic grew +11.7% on a +8.9% capacity increase. Unit revenues were up +3.7%, as unit costs were essentially flat. (ARL) targets an average annual capacity increase of +7.7% until 2020 at an operating margin of more than >10%. This year, (ARL) is retiring four Airbus A319s and phasing in two more A320s for higher seat capacity. But the real growth is coming across the Atlantic: While its current long-haul fleet consists of 11 aircraft, (ARL) will take another two A330-300s and one Boeing 757 in 2016.
The timing of the (IAG) integration may well turn out to have been perfect. For years, Aer Lingus (ARL) was forced to operate in independent mode, even though management under former (CEO), Christoph Mueller had long identified participation in a merger as the preferred strategic option. But Ryanair (RYR) held on to its minority stake in the airline, although it was forced to act as a financial investor only. And as long as (RYR) was involved, the Irish government would not sell either to ensure that its interest were secure.
News Item A-3: "Incident: Aer Lingus A333 at Dublin on February 21, Landing Gear Failed to Retract" by Simon Hradecky, The Aviation Herald, February 21, 2016.
An Aer Lingus (ARL) A330-300, registration (EI-EAV) performing flight EI-105 from Dublin (Ireland) to New York (JFK), USA with 266 passengers, was climbing out of Dublin's runway 28 when the flight crew (FC) stopped the climb at 5000 feet, reporting the "landing gear failed to retract" and requesting to enter a hold, to troubleshoot the issue. The flight crew (FC) subsequently advised they needed to return to Dublin, and no services were needed. The aircraft landed safely back on Dublin's runway 28 about 35 minutes after departure.
A replacement Airbus A330-200 registration (EI-LAX) was estimated to reach New York with a delay of 4 hours.
March 2016: Aer Lingus (ARL) commenced services from Dublin (DUB) to Murcia (MJV) on March 27. The 1,788 km sector from the Irish capital to the Spanish airport will be operated by Ireland’s national carrier 4x-weekly, with it using its A320 fleet on the route. (ARL) will face direct competition from Ryanair (RYR) which operates a daily service on the airport pair. With (ARL)’s latest launch to Murcia, it now means it serves 12 destinations in Spain from Dublin in Summer 2016, with it also operating to Alicante, Barcelona, Bilbao, Fuerteventura, Gran Canaria, Lanzarote, Madrid, Malaga, Palma de Mallorca, Santiago de Compostela, and Tenerife South.
April 2016: News Item A-1: The International Airlines Group (IAG), parent company of British Airways (BAB), Iberia (IBE), Vueling (VUZ) and Aer Lingus (ARL) posted a first-quarter net profit of +€104 million/+$118 million, reversed from a net loss of -€26 million a year ago. The result was achieved on revenue of just over >€5 billion, compared to >€4.7 billion for the year-ago period.
The January to March first quarter, incorporating the post-festive season dip, is traditionally the weakest period of the financial year.
Capacity measured by (ASK)s jumped +11.9% to 66.2 billion, although this includes the addition of Aer Lingus (ARL), which the (IAG) acquired last fall. Stripping out the (ARL) component, capacity was up +4.8%, slightly skewed by the extra day in February.
(RPK)s more than kept pace, rising +13.8% to 52.2 billion. Load factor rose +1.2 points to 78.9% LF.
“This is a good performance, with a strong increase in what is traditionally the weakest quarter,” (IAG) (CEO), Willie Walsh said. “Total revenue was up +7.9% and total cost per (ASK) decreased -6.1%.
“January and February’s revenue was in line with (Q4) 2015 trends. March revenue was affected by the timing of Easter and the Brussels terrorist attacks, with the latter continuing into (2Q).
“Our productivity has improved +5.9% and the underlying non-fuel unit costs performance continued to show improvement across our companies.”
The aftershocks of the Brussels attack, together with what Walsh described as “some softness in underlying premium demand” has led the (IAG) to trim its short-term capacity growth plans.
For the full year, the (IAG) expects to cut underlying ex-fuel costs by -1%. “Consequently, in 2016, the (IAG) still expects to generate an absolute operating profit increase similar to 2015.”
The (1Q) saw the continuing benefit from low fuel prices (-14.3% lower than (1Q) 2015), partially offset by the headwind of a stronger dollar vis-à-vis both the euro and the pound, creating some €62 million of adverse foreign exchange transaction costs.
Cargo revenue for the period decreased -1.5%, or -5.9%, excluding Aer Lingus (ARL). The cargo premium mix remained strong, the (IAG) said, but overall market conditions were weaker than last year, which benefited from a USA port strike.
Other revenue rose +15.1% from an increase in activity at "BA Holidays" and in Iberia (IBE)’s third-party maintenance.
May 2016: News Item A-1: Aer Lingus (ARL) resumed services between Dublin (DUB) and Los Angeles (LAX) on May 4, after a near 8-year hiatus on the 8,314 km route. Flights will be operated by (ARL) 4x-weekly onboard its A330-300 fleet. Its flight on May 4 was operated by an all-female flight crew (FC).
See photo - "ARL-2016-05 - All Female Flight Crew.jpg."
Keith Butler, (CCO) of Aer Lingus (ARL), said at the launch: “We are delighted to commence our new direct service from Dublin to Los Angeles. Los Angeles is our second USA West Coast gateway after the successful launch of San Francisco in 2014. This summer (ARL) will operate 28 daily services across the Atlantic. Los Angeles, together with future new routes, New York Newark and Hartford, will open up new tourism and business opportunities with improved connectivity through our Dublin gateway.”
Although Aer Lingus (ARL) is the only carrier from either Ireland or the USA to operate this city pair, it should be noted that Ethiopian Airlines (ETH) already operates a 3x-weekly service between the two points as part of its Addis Ababa – Dublin – Los Angeles route, an operation which it commenced last summer.
(ARL) commenced services on two routes from Dublin (DUB), starting on May 18 with a 3x-weekly (Wednesdays, Fridays and Sundays) service to Pisa (PSA). Services on the 1,627 km route will face direct competition from Ryanair (RYR), which offers 5x-weekly rotations. On May 20, (ARL) launched a 1,323 km route to Montpellier (MPL). The services to the French destination will operate 2x-weekly (Mondays and Fridays). Both of (ARL)’s new routes will be operated on (ARL)’s A320 fleet.
June 2016: News Item A-1: "(IATA) (AGM) Host Aer Lingus is in Growth Mode" by Karen Walker, ATWOnline, June 1, 2016.
Aer Lingus (ARL) is the host airline of the 72nd (IATA) (AGM) in Dublin. The International Airlines Group (IAG) acquired Aer Lingus (ARL) in September, bringing it under the (IAG) Group umbrella that includes British Airways (BAB) and Spanish carriers: Iberia (IBE) and Vueling (VUZ).
Stephen Kavanagh joined Aer Lingus (ARL) in 1988 and was appointed (CEO) in March 2015. He talked with the Executive Report.
* A prestigious role to be this year’s (AGM) host airline
Yes, Aer Lingus (ARL) is celebrating its 80th anniversary this year, so it’s quite a significant milestone in the company’s history. But it’s also important for Ireland and for how it has developed and highlighted the positive impact of aviation. So we are delighted to showcase both Aer Lingus (ARL) and Ireland and its aviation and airline businesses. We’ve been a very long standing member of (IATA) and we last hosted the (AGM) in 1962, so we are delighted to have this opportunity.
* What issues do you expect to see raised at this (AGM)?
Because we are in Europe, I think we will see a focus on the infrastructure issues in Europe, whether it be "Single European Sky," runways or regulation. As an industry, we are highly regulated and some of that regulation is necessary, but not all of it adds value. That has been on the (IATA) agenda for some time, and I can see it being echoed within [Ireland], a very liberal and deregulated marketplace.
* How do you take advantage of Ireland’s geographic location?
It’s often seen that the geographic location of Ireland, on the periphery of a major market, is a strategic weakness. For example, the Irish government was obsessed with us maintaining connections with Heathrow (LHR). In fact, we see opportunity to grow from Dublin. Our geographic location gives us the shortest crossing over the Atlantic and that’s an advantage for any airline. That is something we are keen to continue to communicate. It underpins our strategy. The (IAG) has a three-hub strategy: – (LHR), Madrid, and Dublin, and each plays a part in the system. It’s a mindset change, to see opportunity where others see weakness.
* What’s it like working with the other (IAG) airline (CEO)s?
As the operating companies retain their autonomy as airlines, the value is not just in what the Group offers and in the guidance from (IAG), but also in the debate and discussions from within the companies. I have to say, there’s a little bit of competitiveness. We are delighted to deliver a return on capital against expectations from year one, and now we’re striving to become the most profitable operating business within the Group. It’s very healthy competition. It’s in the right spirit. There are mutual learnings, which are shared, and there’s a lot of cooperation. So it’s been a very comfortable in terms of not just the structures, but also the personalities. It’s a very impressive team to be part of.
* What are your growth focus areas?
We have seen some recovery in the Irish economy; we are just beginning to see that drive our short-haul performance. Obviously, short-haul is where most of our volume is and it’s also where our most intense competitor is and so we continue to develop and that business. But our focus in terms of (ASK) growth has been across the Atlantic. We’ve grown at a compound rate of 12% since 2010 and we’ve continued that in 2016 under the (IAG)’s ownership, where we’ve accelerated our growth and added three new destinations. We’ve commenced operations to Los Angeles; we will start [New York] Newark and Hartford, Connecticut, in (Q3). That will bring us to 10 gateways in North America. We are starting to get double dailies on our core gateways in North America, which allows us to maximize our efficiencies out of Dublin without compromising the efficiencies of our short-haul operation. We have double daily now on Chicago, (JFK) and Boston, and we will look to increasing frequencies on our other gateways. We are also looking at future aircraft types and how aircraft such as the Airbus A321LR may fit into a revised hub strategy, where frequency is invested in, but not at the expense of cost per seat.
* Norwegian (NWG)/(NAI), the low-cost, long-haul carrier, plans to start service to the USA from Ireland, pending regulatory approval. How do you view the new competition?
Every airline wishes for a monopoly in its home market. But life doesn’t work like that. Competition is good. Level competition is healthy, and it stimulates the marketplace, and we respond accordingly. We are in business because of extremely low entry fares. We operate a high volume, high load factor transatlantic operation. We compete on the basis of value and price is a key component. So we keep focused on our cost reduction and on the guest experience, and we believe that we can retain our competitiveness.
* Please share your thoughts on Tony Tyler’s (IATA) leadership and his named successor, Alexandre de Juniac?
We have been truly blessed with Tony for a number of years. He has that great balance of diplomacy and industry knowledge, and he has been key to identifying the issues that (IATA) should focus on, reinforcing (IATA)’s core mandate. And the delivery over the past years has been exceptional, and we look forward to that continuing. I think (IATA) has chosen very well.
August 2016: A330-302 (1742, EI-FNG "St Colmcille"), ex-(F-WWYM) delivery.
September 2016: 767-224ER (30436, N234AX) returned to Omni Air International (OAI) after lease.
October 2016: In-flight connectivity provider AeroMobile, in partnership with Panasonic Avionics, will connect 2 Aer Lingus (ARL) Airbus A330s with a (3G) in-flight network. The newly connected aircraft are able to accommodate 317 passengers, 30C in business and 287Y in economy class, all of whom will be able to access the service. The (3G) roll out will begin on the 2 new A330s, bringing the total connected (ARL) fleet to 10 aircraft. The AeroMobile service allows passengers to use their own mobile devices to text and browse the internet in-flight.
November 2016: "(IAG) Signs Up for Next-gen Wi-Fi" by (ATW) Alan Dron firstname.lastname@example.org, November 3, 2016.
The International Airlines Group (IAG) is to introduce high-speed Wi-Fi across its constituent carriers’ short-haul fleets, as it becomes the launch customer for Inmarsat’s next-generation connectivity system.
The (IAG) (comprising Aer Lingus (ARL), British Airways (BAB), Iberia (IBE) and Vueling (VUZ)) will equip up to 341 of its short-haul aircraft with the necessary equipment to provide a 4G broadband network. They include 132 (BAB), 125 (VUZ), 45 Iberia (IBE), and 39 Aer Lingus (ARL) Airbus A320-family aircraft.
The new system will offer customers broadband internet access on their own mobile devices, allowing them to use email, check social media and stream videos. Bandwidth capacity will allow them to use multiple devices simultaneously, while connection speeds will be similar to what they have at home, the (IAG) said. “We are giving our customers the fastest connectivity you can get on any aircraft,” (IAG) (CEO) Willie Walsh said.
Earlier this year, the (IAG) announced the installation of Wi-Fi on its long-haul aircraft. “Connectivity is essential because it’s what our customers demand and the (IAG) will be the 1st European airline group to offer high-quality air-to-ground Wi-Fi on short-haul flights,” Walsh added.
“The European Aviation Network is a game changer for the millions of airline passengers that have been cut-off from fast, reliable and consistent broadband access during flights in Europe,” Inmarsat Aviation President Leo Mondale said. “It will combine the strengths of Inmarsat’s satellite connectivity with a powerful ground network operated by our partner Deutsche Telekom.”
The 1st short-haul aircraft to be equipped with the new system (a (BAB) A321) will be in service summer 2017. (ARL), (IBE) and (VUZ) aircraft will follow later in the year.
The new development means that by 2019, 90% of (IAG) airlines’ fleets will have connectivity.
January 2017: 2016 passenger traffic (2015): 19.19 million (6.64 million). Passenger traffic change: +189%. 81.6% LF (82.2% LF).
2016 freight traffic: 127,000. Freight LF: 126.8% LF.
May 2017: News Item A-1: The International Airlines Group (IAG) posted a 1st-quarter net profit of +€27 million/+$29.6 million, down -74% from net profit of +€104 million in (1Q) 2016. The company said adverse currency movements played a significant part in the profit drop.
Revenue for the quarter was €4.9 billion, down -2.8% from the year-ago figure of €5.08 billion.
However (IAG) (the parent company for Aer Lingus (ARL), British Airways, Iberia (IBE) and Vueling (VUZ)) said it had recorded its highest-ever operating profit for the traditionally weak 1st quarter of the year, at €170 million before exceptional items, up +9.7% compared to +€155 million last time.
The (IAG) said (1Q) 2017 had seen a backdrop of increasing fuel prices and a stronger USA dollar against both the euro and the UK pound. This gave an adverse foreign exchange figure of €32 million.
In an analysts’ call on the figures reported by "Reuters," Walsh said the group’s new long-haul, low-cost carrier (LCC), "Level," would add “2 or 3” aircraft to its initial 2 Airbus A330-200s in 2018 and would begin to operate from at least 1 new European base, apart from its initial base at Barcelona.
The “improving trend” in passenger unit revenue was continuing, (IAG) (CEO) Willie Walsh said, with (2Q) passenger unit revenue also anticipated to be up on the year-ago figure. At current fuel prices and exchange rates, the group was on course to improve its operating profit figure for 2017 compared to 2016, he added.
Capacity rose +3.3% to 68.3 billion ASKs, while load factor inched up +0.1% to 79% LF. Although capacity grew across all regions, the group picked out Aer Lingus (ARL)’s continued growth on North Atlantic services, while low-cost carrier (LCC) Vueling (VUZ) grew in its Spanish homeland and was able to reduce its seasonality.
(BAB) launched new routes to Santiago, Chile, and Oakland, California, while dropping 1 of its China routes, to Chengdu. Iberia (IBE) continued to rationalize its European operations, while increasing capacity on long-haul routes launched in 2016, such as Shanghai, Tokyo and Johannesburg.
Passenger revenue kept pace with the capacity increase, up +3.3% at 53.9 billion RPKs, while cargo tonne kms rose +3.6% to 1.37 billion.
Passenger numbers rose +3.8%, to 21.1 million, up from 20.4 million a year ago.
Employee costs were €1.15 billion, down -6% compared to the same period in 2016, while fuel, oil and emission charges dropped -10.8% to €1.06 billion.
News Item A-2: Aer Lingus (ARL) added its latest route from Ireland to the UK on May 6, a 288 km link between Cork (ORK) and Cornwall Airport Newquay (NQY). The route will be flown by (ARL) 2x-weekly (Wednesdays and Saturdays) on its 72-seat ATR 72-600s. No other airline operates the airport pairing. (ARL) started serving the Cornish airport on May 1 2015 with flights from Dublin.
In total, (ARL) now operates 19 routes from Cork this summer on 143 weekly flights, with 9 of those routes being to airports in the UK, including Birmingham, Bristol, Edinburgh, Glasgow, London Heathrow, Manchester, Newcastle and Southampton, along with its new Cornish service. The seasonal service to Cornwall Airport Newquay will operate until September 23.
A320-214 (3789, EI-GAL "St Maeve/St Maedbh"), ex-(VQ-BAZ) (GECAS) (GEF) leased, and A330-302 (1791, EI-GAJ) "St Carthage/Mochuta"), ex-(F-WWCQ).
June 2017: 1 A320-214 (3823, EI-GAM "St Brona/Bronagh), ex-(VQ-BBB), (GECAS) (GEF) leased.
September 2017: News Item A-1: Aer Lingus (ARL) launched flights to its 11th North American destination from Dublin (DUB) on September 1, with Miami (MIA) now being part of (ARL), the Irish flag carrier’s network. The "Magic City" becomes (ARL)’s 2nd route to Florida after Orlando.
The 6,690 km sector will be operated by (ARL) 3x-weekly (Wednesdays, Fridays and Sundays) year-round on its fleet of A330-200s. “We are delighted to welcome (ARL’s new transatlantic service to Miami,” said Dublin Airport Managing Director Vincent Harrison. “This new route offers further choice and flexibility for both business and leisure passengers,” he added. No competition is currently offered on the city pair. With this launch,(ARL) now operates 98x-weekly flights from Dublin to North America. With (ARL) joining Miami’s airline line-up, it means that the airport has non-stop flights to 22 destinations in Europe this summer.
News Item A-2: Ireland’s national airline, Aer Lingus (ARL), is introducing a “bare bones” transatlantic fare as it fights off growing competition on the North Atlantic run, notably from long-haul, low-cost carriers (LCC)s.
The new Saver fare will cut -€40/-$47 from (ARL)’s standard Smart one-way transatlantic fare. Like basic economy fares introduced by USA carriers, it comes with restrictions, with passengers having to pay for features such as advance seat selection, blankets, headphones and checked baggage.
The new fare, which will take effect October 1, “is very much part of the move of the market to a situation where certain niches are interested in price only, or are very price-sensitive.” Saver fare passengers will still receive onboard meals, a 10 kg/2.2 lb cabin bag allowance and access to the aircraft’s (IFE) system. Anyone buying a blanket (€5) or headphones (€3) can take them with them when they leave the aircraft.
Kearney said there had been some misunderstandings over the fare, notably among the UK press, which had assumed that charging for such items applied to all passengers. “It’s not. It’s aimed at those who want to travel light and are very focused on price.
“Our aim is that it may be incremental business for us. It will attract people who may not have previously flown with (ARL).”
Like other legacy carriers, (ARL) is coming under increasing pressure on lucrative North Atlantic routes from new arrivals such as Norwegian (NWG) and Iceland’s (WOW) Air. (ARL) operates a portfolio of routes to USA and Canadian destinations, taking advantage of the large Irish diaspora in those countries.
The new fare “has been received positively. It seems to be relevant to some of the market,” Kearney said. The new fare will only be available on point-to-point routes between Ireland and the USA/Canada. It will not, for example, be available for UK passengers connecting through Ireland en route to North America, unless they buy 2 separate tickets from their departure airport to Dublin, then a "Saver" fare from the Irish capital to their North American destination.
October 2017: "Aer Lingus Slams Dublin ‘Infrastructure Shortcomings’
by (ATW) Alan Dron email@example.com, October 6, 2017.
Aer Lingus (ARL) (COO) Mike Rutter has strongly criticized facilities at (ARL)’s home base airport, saying they threaten (ARL)’s expansion.
Rutter said if the situation does not improve, (ARL) or its parent, the International Airlines Group (IAG), could decide to redeploy new aircraft to other (IAG) members, which include Spanish flag carrier Iberia (IBE), British Airways (BAB) and Spanish (LCC) Vueling (VUZ).
The airport responded it was involved in major expansion and had to cater to all users, not only (ARL).
Announcing (ARL)’s latest transatlantic route to Philadelphia on October 4, Rutter said that while (ARL) saw “no substantive constraints” on growing its opportunities from Dublin, a lack of infrastructure at Dublin Airport “means that doing business has become more difficult than it should be.”
He cited the difficulty of getting arriving aircraft onto stands swiftly and the need for new taxiways. It requires investment in taxiways, gates and stands—standard airport investments.” Aer Lingus (ARL) had put in place its own measures to try to keep its level of service to an acceptable standard as it expanded, he said, but “the airport has to address key pinch points.”
Rutter said: “Relations with Dublin Airport have soured immensely over the past year. We have differing levels of ambition. The airport has enjoyed strong growth. Up until this year, it’s been able to absorb that growth without having to commit substantial capital to the business. We believe they now have to invest in taxiway improvements, stand capability.”
He added, “If there are no improvements, in the long term we will have to look at where these [new] aircraft are deployed. There are other airlines in the group that could happily take them.”
In a written response, the airport authority noted that: “Dublin Airport is managed in the best interests of the Irish economy to grow connectivity and to meet the needs of all of its airline customers, rather than just one. Dublin Airport is currently investing about €100 million/$117 million per year to upgrade its facilities and we will shortly present proposals for an enhanced investment program to our airline customers for consultation,” it said.
“As part of our investment in new capacity, a new boarding gate area will open later this year, which will be used by (ARL) flights among others. We welcome (ARL)’s decision to launch a new Dublin to Philadelphia service next year and to continue to expand its overall transatlantic business at Dublin Airport,” the airport authority added.
November 2017: Aer Lingus (ARL) Flights from Seattle-Tacoma International Airport will commence May 18, 2018 with a 4x-weekly service to Dublin, Ireland and convenient connecting service
to 28 destinations across Europe. Saver fares start from $749 round trip, inclusive of taxes and fees for travel May 18 to June 15, 2018.
February 2018: "(IAG) Reports Strong 2017 Results, Plans to Expand Capacity in 2018" by Jens Flottau (ATW) Plus, February 23, 2018.
Encouraged by much-improved results across all airline units and robust unit revenues, the International Airlines Group (IAG) plans to expand capacity significantly in 2018, a move met with concerns by investors. The (IAG) (parent company of British Airways (BAB), Iberia (IBE), Vueling (VUZ) and Aer Lingus (ARL)) anticipates a +6.7% capacity increase for 2018, compared to a +2.6% expansion last year.
March 2018: "Ryanair, Aer Lingus to Partner on Connecting Flights" by Helen Massy-Beresford, (ATW) Plus, March 5, 2018.
Ryanair (RYR) and Aer Lingus (ARL) plan to launch connecting flights this year, a spokeswoman for (RYR) confirmed, after Irish media reports said the 2 carriers had signed a deal that would help boost passenger numbers through Dublin. “As we have previously stated, we hope to start operating connecting flights with (ARL) this year,” the spokeswoman for (RYR) said.
June 2018: See video of inaugural flight from Dublin to Seattle:
September 2018: Irish flag carrier Aer Lingus (ARL) has just announced at the "EXPO" in Boston that it will be rolling out a new livery, corporate identity, and cabin crew uniforms next year.
According to (ARL), the re-branding process should begin in January and will take 3 years, aiming to have it completed by the end of 2022.
See photo of new livery above.
(ARL) (CEO), Stephen Kavanagh, said that the current (ARL) livery and uniforms “have been in service for close to 25 years. Our business has changed and we have the opportunity to modernize our brand.”
During April 2019, (ARL) is also expected to take delivery of its 1st A321neoLRs, with which a new route to Montreal will be launched. (ARL) is set to receive 12 of these aircraft by the end of 2021. “The range capability of this aircraft is uniquely suited to (ARL), with much of the market opportunity in North America capable of being served.”
(ARL) plans to equip the new aircraft with lie-flat Business (C) Class and Economy (Y) Class seats with a 31-inch pitch. The airplanes will come to replace the 4 Boeing 757s (ARL) currently operates. The 1st is set to leave the fleet in 2020.
Within the 1st quarter of 2019, (ARL) also plans to start offering economy (Y) passengers with free alcoholic beverages and a limited free Wi-Fi service. The Wi-Fi will be limited to 20 MB per passenger, enough for sending messages via related smartphone apps.
The re-engined variants of the successful Airbus A320neo and Boeing 737 MAX families are reshaping the Trans-Atlantic market, bringing more and cheaper flights to passengers around the world. However, at the same time, these planes are heating up competition dramatically. Really interesting times ahead within the aviation industry.
November 2018: "Aer Lingus to Boost fleet for North American Expansion" by Victoria Moores (firstname.lastname@example.org), November 2, 2018.
The International Airlines Group’s (IAG) Irish airline Aer Lingus (ARL) plans to nearly double its long-haul fleet from 17 to 30 aircraft by summer 2023, using the extra capacity to grow its North American presence.
Addressing delegates at the (IAG)’s capital markets day on November 2, outgoing (ARL) (CEO) Stephen Kavanagh outlined plans for +11% compound annual growth on the North Atlantic by 2023.
Seat capacity will increase from 2.8 million to 4.7 million and frequencies would rise +70%, to hit 196 North Atlantic flights per week. Roughly 63% of this growth will be in established markets, with the remainder used to add new city pairs (some of which will be unlocked by the addition of its 1st Airbus A321LRs). By 2023, (ARL) expects to serve 18 North Atlantic destinations, compared with 13 today. This growth will be supported by fleet changes, with the net addition of 3 wide bodies and 10 narrow bodies, compared with today’s long-haul fleet of 4 Boeing 757s and 13 A330s (5 A330-200s and 8 A330-300s).
In 2019, (ARL) will receive 3 Airbus A321LRs, followed by another 5 in 2020, 4 in 2021, 1 in 2022 and 1 in 2023, for a total fleet of 14 A321LRs. (ARL)’s 4 757s will be phased out in 2020, paving the way for further growth of the A330 fleet, which will expand to 16 aircraft by 2023 (2 net A330 additions in 2020 and a further 1 in 2022).
Kavanagh said the A321neo will play a key role in this growth, as the type can operate inbound across the Atlantic to Dublin, and then on to European destinations. “This growth is (CASK)-efficient growth,” he said, adding that (ARL) will continue to review the opportunities that could be created if Airbus (EDS) decides to proceed with a longer-range A321XLR.
He said (ARL) will also launch new branding and uniforms in the 1st quarter and “significantly invest in brand spend in North America” to increase revenue and market share. “We’ve built a compelling competitive position,” Kavanagh said. “We have achieved critical mass. The risk going forward is less than the risk that lies behind us.”
Since being acquired by the (IAG) in 2015, (ARL) has grown capacity by 33%, cut unit costs by -18% and doubled (ARL)’s operating margin to 18%. Kavanagh said (ARL)’s return on capital employed has also doubled to 28%.
Over that period, revenue has risen from €1.7 billion/$1.9 billion to €1.96 billion, and operating profit has grown from €124 million to €317 million. “We have added close to half a billion in revenue and will exceed a €2 billion top line in 2018. A lot of that increased revenue has been captured as operating profit,” Kavanagh said, building the case for further investment.
Various product upgrades will also be rolled out, including complimentary alcoholic drinks with meals on transatlantic flights, free in-flight Wi-Fi for social media use and other digital upgrades, like baggage tracking. “We will also change our service processes as new aircraft join the fleet and learn from our other operating companies, like Level,” Kavanagh said.
Speaking during the capital markets day (Q&A) session, (IAG) (CEO) Willie Walsh said (ARL) has applied to join (IAG)’s transatlantic joint venture (JV) between Dallas/Fort-Worth-based American Airlines (AAL), British Airways (BAB), Spain’s Iberia (IBE) and Finland flag carrier Finnair (FIN). The exact timeline for regulatory approval is unclear, although it is anticipated in 2019. Walsh said (ARL) will not be distracted or prevented from fully exploiting its own transatlantic development plans, outside of the joint venture (JV), while it awaits the clearance.
He added that (ARL)’s partnerships with USA carrier JetBlue Airways (JBL) and Alaska Airlines (ASA) will continue, should (ARL) join the (JV). (JBL) is considering expanding into its own transatlantic operations, but Walsh is unconcerned. “We know how to compete,” he said. “There is certainly room for them. It’s a good market and a growing market, so that is not something of particular concern.”
Click below for photos:
ARL-767-224ER N234AX 2016-22.jpg
ARL-A319 - 2015-07.jpg
ARL-A319-111 EI-EPS ST FERGUS 2018-10.jpg
ARL-A320 - 2014-09
ARL-A320 EI-DEO St Sebastian 2018-10.jpg
ARL-A320-214 - 2013-08
ARL-A330 - 2013-11
ARL-A330-302 - 2012-10
0 737-448 (CFM56-3B2) (1788-24521, /89 EI-BXB; 1850-24773, /90 EI-BXC; 1867-24866, /90 EI-BXD; 2036-25052, /91 EI-BXI; 2269-25736, /92 EI-BXK). "ST GALL" "ST BRENDAN /BREANDAN" "ST COLMAN" "ST FINNIAN" "ST CAIMIN." 2 LEASED TO (CHS) 1998-05, 2 LEASED TO (RYN), 24474 RETURNED (UAG), LEASED TO (LXR) 2000-07 (25736 TO (RYN) 2000-11 TO 2001-05), 25052 LEASED TO (RYN) 2001-12. 24521 RETURNED (ILF), LEASED TO (UKA) 2002-05. 24773 RETURNED (ILF), LEASED TO (MHK) 2002-05. 25736 RETURNED FROM (RYN) 2002-04. 24866 SOLD TO (TAF) 2004-11. 156Y.
0 737-46B (CFM56-3) (1679-24124, EI-CRC), RETURNED FROM (FUA), LEASED TO (RYN) 2001-02. RETURNED FROM (RYN) 2002-04.
0 737-548 (CFM56-3B1) (28287 RETURNED 1999-03 TO (AFA), (24878 2 YEAR LEASED TO (TRM) 1999-06) (1939-24878, /90 EI-CDA "ST COLUMBA/COLUM;" 1970-24919, /90 EI-CDB "ST ALBERT/AILBHE;" 1975-24968, /91 EI-CDC "ST MUNCHIN/MAINCIN;" 1989-24989, /91 EI-CDD "ST MACARTAN/MAINCIN;" 2050-25115, /91 EI-CDE "ST JARLATH/LARFLAITH;" 2232-25737, /92 EI-CDF "ST CRONAN;" 2261-25738, /92 EI-CDG "ST MOLING;" 2271-25739, /92 EI-CDH "ST RONAN"), (ILF) LEASED. 24878; 24919; 24968; SOLD TO BARKHAM ASSOCIATES & LEASED TO (BAU) 2004-10. 24919 WFU. 24989; & 25115; RETURNED (ILF), & LEASED TO (STG) 2004-11. 25737; 25738; 25739; SOLD TO (STG) 2005-11. 117Y.
0 737-86N (CFM56-7B) (28608), (GEF) 5 YEAR LEASED 1999-11, WET-LEASED TO (FUA).
0 747-100 (JT9D-3A) (IN STORAGE), 425 PAX.
4 757-2Q8 (PW2020) (775-28167, /97 EI-LBR; 792-27623, /98 EI-LBS; 801-28120, /98 EI-LBT), EX-(FIN), (HCA) DAMP LEASED TO AER LINGUS (ARL) IN 2014 FOR NORTHERN SUMMER SEASON. WITH WINGLETS. 12J (PY FLAT BEDS), 165Y.
0 767-224ER (833-30436, N234AX - SEE PHOTO), RETURNED TO OMNI AIR INTERNATIONAL (OAI) AFTER LEASE 2016-09.
0 767-3YO (PW4060), LEASED TO (AMX).
0 MD-11 (PW4462) (506-48437), (WLD) WET-LEASED, RETURNED 2001-09.
0 A319-111 (CFM56-5B6/P) (3377, EI-EPS St Sebastian - SEE PHOTO; EI-EPT), EX-(IBE) 2012-01. TO BE RETIRED IN 2016, TO BE REPLACED WITH A320 AIRCRAFT.
2 A320-200, (GEF) LEASED 2013-04, AND WET-LEASED TO (VAA) FOR START OF DOMESTIC/REGIONAL "LITTLE RED" OPERATIONS IN (VAA) COLORS.
7 A320-214 (CFM56-5B4/P) (1242, /00 EI-CVA "ST SCHIRA/SCIRE;" 1394, /01 EI-CVB "ST MOBHI/MOBHI;" 1443, /01 EI-CVC "ST KEALIN/CAOLFHIONN;" 1467, /01 EI-CVD ST KEVIN/CAOIMHIN;" (1663, /03 EI-CZV; 1659, EI-CZW; 3318, EI-DVG, 2007-11; 3345, EI-DVH, 2007-12). 559 RETURNED 2004-08. 159Y.
1 A320-214 (3129, EI-DVE, "ST AIDEN/ETACIN"), (ILF) 7 YEAR LEASED 2007-05. 159Y.
1 A320-214 (3136, EI-DVF, "ST JARLATH/IARFGLAITH"), (DEA) LEASED 2007-05.
23 +1 OPTION A320-214 (CFM56-5B4/P) (1983, EI-EZW; 2001, EI-EZV; 2191, /04 EI-DEA "ST AIDEEN/EATOIN" 2004-05; 2206, /04 EI-DEB "ST NATHY/NATHY" 2004-05; 2217, /04 EI-DEC "ST FERGAL/FEARGHAL" 2004-06; 2250, EI-DEE; 2256, /04 EI-DEF "ST DECLAN/DEAGLAN," 2004-09; 2272, /04 EI-DEG "ST FACHTNA/FACHTNA" 2004-09; 2294, /04 EI-DEH, "ST MALACHY/MAOLMHAOGHOG" 10/04), (2364, /05 EI-DEJ "ST KILIAN/CILLIAN" 2005-02; 2374, /05 EI-DEI "ST OLIVER PLUNKETT/OILIBH PLUNCEID" 2005-02; 2399, /05 EI-DEK "ST EUNAN/EUNAN" 2005-03; 2409, /05 EI-DEL "ST CANICE/CAINNEACH" 2005-04; 2411, /05 EI-DEM "ST IBAR/IBHAR" 2005-04; 2432, /05 EI-DEN "ST KIERAN/CIARAN" 2005-05; 2486, /05 EI-DEO ST SEBASTIEN" 2005-07 - SEE PHOTO; 2542, /05 EI-DEP "ST EUGENE/EOGHAN" 2005-10; 2583, /05 EI-DER "ST MEL/MEL" 2005-11; 2635, /05 EI-DES "ST PAPPIN/PAIPAN" 2005-12; 2810, /06 EI-DET "BRENDAN" (TCI) LEASED 2006-06; 3129, EI-DVE; 3174, EI-FNJ; 3318, EI-DVG; 3345, EI-DVH; 3501, EI-DVI, 2008-06; 3789, EI-GAL "ST MAEVE/ST MAEDBH," 2017-05; 3823, EI-GAM "ST BRONA/BRONAGH," 2017-06; 4572, EI-DVK, 2011-01; 4634, EI-DVM, 2011-02; 4678, EI-DVL;4715, EI-DVN; ), INCLUDING 9 (ILF) 7 YEAR LEASED. 2374; DAMP-LEASED TO (VAA) 2013-04 FOR "LITTLE RED" OPERATIONS. 174Y.
1 A320-214 (CFM56-5B4/P) (3789, VQ-BAZ), 20C, 120Y.
3 A320-214 (CFM56-5B4/P) (3755, EI-EDS "ST. MALACHY/"MAOLMHAODHOG" 2009-02; 3781, EI-EDP, 2009-02; 3857, EI-DVJ, 2009-04), (RBS) AEROSPACE LEASED. 174Y.
6 A321-211 (CFM56-5B3/P) (815, /98 EI-CPC "ST FERGUS/FEARGUS;" 841, /98 EI-CPD "ST DAVNET/DAMHNAT;" 926, /98 EI-CPE ST ENDA/EANNA;" 991, /99 EI-CPF "ST IDA/IDE;" 1023, /99 EI-CPG "ST AIDAN/AODHAN;" 1094, /99 EI-CPH "ST DEARBHLA/DEARBHILE"), 1ST 3 (ILF) LEASED, 2ND 3 FROM AIRBUS, TO REPLACE 737-400'S, 212Y.
1 A330-202 (CF6-80E1A4) (330, EI-EWR), EX-(9M-XAD), AERCAP LEASED 2015-01. 24C, 255Y.
3 A330-202 (CF6-80E1A4) (269, /99 EI-LAX "ST MELLA/MELLA;" 330, /00 EI-EWR "LAURENCE O'TOOLE/LORCAN O'TUATHAIL;" 397, /01 EI-DAA "ST KEEVA/CAOIMHE;" 841, EI-DUO "ST COMUMBA/COLUM" 2007-05), (ILF) LEASED. 330 RETURNED 2009-05. 24C, 255Y.
1 A330-203 (841).
4 A330-302 (CF6-80E1A4B) (055, /94 EI-DUB "ST PATRICK/PADRAIG;" 059, /94 EI-ORD "ST MAEVE/MAEDBH;" 070, /94 EI-CRK "ST BRIGID/BRIGHID;" 086, /95 EI-JFK "ST COLMCILLE/COLMCILLE;" 847, EI-DUZ "ST AOIFE/AOIFE;" 985, /09 EI-EAV "ST RONAN/RONAN" - SEE PHOTO - - "ARL-A330-302 - 2012-10;" 1025, /09 EI-EDY "ST MUNCHIN/MAINCIN;" 1106, /10 EI-ELA "ST PATRICK/PADRAIG;" 1742, EI-FNG "ST COLMCILLE" 2016-08; 1744, EI-FNH 1791, EI-GAJ "ST CARTHAGE/MOCHUTA" 2017-05; 1831; EI-GCF) 1ST 2 (ILF) 6 YEAR LEASED, 054; 059; WFU 2002-04. 070; RETURNED, LEASED TO (VLK) 2009-03. 30C, 287Y.
9/3 ORDERS (2015-02) A350 XWB-900 (TRENT XWB):
0 B AE 146-200, (B AE) LEASED. 2 RETURNED.
0 B AE 146-300 (ALF502R-5) (E3126 RTND 2000-01; E3193, /92 EI-CTO "ST CIARA/CIARA," (B AE) LEASED 2000-05; E3169, /90 EI-CTN "ST CORMAC/CORMAC" 2000-07), E3155 RETURNED (B AE) 2003-01. E3169; E3193; RETURNED TRIDENT 2004-01. E3131 & E3159 STORED AT MOJAVE 2004-07. 110Y.
0 B AE 111-200. 4 RETURNED.
0 SAAB 340B, 4 RETURNED.
0 F 50 (20118 ST ELGIN 1999-10) (20208; 20209; RETURNED 2001-04), 4 SOLD TO DENIM AIR 2003-11.
Click below for photos:
ARL-2-FERGUS WILSON - 2013-05
ARL-9-CAPTAIN CONOR NOLAN - 2013-09
ARL-MAURICE COLEMAN-HEAD COMMERCIAL STRATEGY
COLM BARRINGTON, CHAIRMAN (2008-09).
Colm has been re-appointed for a further term of 1 year to expire in September 2015.
STEPHEN KAVANAGH, CHIEF EXECUTIVE OFFICER (CEO) (2015-03).
Stephen has been with Aer Lingus (ARL) since 1988. He held a number of operations and commercial roles before becoming a company executive in 2006. He was part of the Initial Public Offering (IPO) team and became (CCO) in 2009, before taking on his role as Chief Strategy & Planning Officer.
“Stephen has worked in (ARL) for >26 years in a range of increasingly challenging roles and he has a commanding knowledge of both the company and the industry. I am particularly pleased that it has been possible and appropriate for an internal (ARL) executive to succeed to the position of (CEO). Stephen has been a key member of the executive team that has transformed (ARL) into a strong, profitable airline with a resilient business model and an improved cost base,” (ARL) Chairman, Colm Barrington said.
FERGUS WILSON, CHIEF OPERATING OFFICER (COO).
BERNARD BOT, AER LINGUS GROUP CHIEF FINANCIAL OFFICER (CFO).
KEITH BUTLER, CHIEF COMMERCIAL OFFICER (CCO).
KEVIN FOLEY, DIRECTOR LABOR RELATIONS.
GREG O'SULLIVAN, COMPANY SECRETARY (2008-05).
PETER O'NEILL, OPERATIONS DIRECTOR (2007-12).
CAPTAIN FRANK LAWLESS, DIRECTOR FLIGHT OPERATIONS & CHIEF PILOT.
DECLAN KEARNEY, DIRECTOR COMMUNICATIONS.
CAPTAIN HENRY DONOHOE, FLIGHT OPERATIONS MANAGER, (DUBOXEI) (email@example.com).
CAPTAIN JIMMY DEVLIN, DEPUTY FLIGHT OPERATIONS MANAGER.
CAPTAIN COLUM WYNN, FLEET CAPTAIN 737-400/-500.
CAPTAIN JIMMY COURTNEY, DIRECTOR TECHNICAL STANDARDS & DEVELOPMENT (1999-10).
CAPTAIN TOM CROKE, AIR SAFETY OFFICER (DUBQAEI) (firstname.lastname@example.org).
CAPTAIN FRANK FEENEY, AIR ACCIDENT INVESTIGATOR, AIR SAFETY OFFICE.
CAPTAIN DENNIS COUGHLAN, DIRECTOR FLIGHT TRAINING.
CAPTAIN DONAL FOLEY, GENERAL MANAGER TECHNICAL OPERATIONS.
DAN LOUGHREY, CORPORATE AFFAIRS DIRECTOR.
MICHAEL GREALY, DIRECTOR HUMAN RESOURCES (HR) & ORGANIZATIONAL CHANGE (2009-09).
MS YVONNE MULDOON, DIRECTOR SALES.
GREG O'SULLIVAN, FINANCE DIRECTOR (2006-03).
ENDA CORNEILLE, COMMERCIAL DIRECTOR (2006-03).
LAURENCE GOURLEY, HEAD LEGAL AFFAIRS (2008-05).
MAURICE COLEMAN, HEAD COMMERCIAL STRATEGY.
DICK BUTLER, GROUND OPERATIONS DIRECTOR (2006-03).
STEPHEN KAVANAUGH, CORPORATE PLANNING DIRECTOR & HEAD LONG-HAUL, CARGO ALLIANCE & RESOURCE PLANNING OPERATIONS (2007-12).
ENDA CORNEILLE, CORPORATE AFFAIRS DIRECTOR (2007-12).
DAVID MANIFOLD, DEPUTY FINANCE DIRECTOR (2007-12).
JOE LENNON, CHIEF ENGINEER, TECHNICAL MANAGER (DUBOTEI) (email@example.com) (2002-12).
DONAL LOWRY, MAINTENANCE MANAGER (DUBQGEI)
CAPTAIN CONOR NOLAN, SAFETY MANAGER.