Aer Lingus
There are no plans for an expansion of the short-haul fl eet.
New York, Boston, Chicago and Orlando.
With the new strategy emphasising feeder traffi c, the airline has changed its approach to load factor optimisation on these routes. On the one hand it is rescheduling some of its short-haul services where they can provide more feed to the North Atlantic network. On the other, it has been able to strengthen its proposition to the US domestic market through codeshares, notably with JetBlue via New York and Boston and United Airlines via Chicago. Kavanagh says the JetBlue
operation “is a relatively straight forward vehicle for low-cost traffi c through Boston and New York” while United allows “far more reach in North America”. In another creative move that fully exploits Europe–US Open Skies, one of Aer Lingus’ A330s has been deployed to operate a Madrid–Washington service with United Airlines. This is a joint venture and is the result of a three-year negotiation. It exploits Aer Lingus’ ability to provide a lower cost base and United’s capacity to provide “mature revenue at Washington”, says Kavanagh. An Aer Lingus crew base is operated at
16
Washington with 16 locally recruited pilots and 78 cabin crew, who are contracted on local terms and conditions. Aer Lingus is responsible for all operational aspects of the partnership, while both companies are responsible for revenue generation. Both Aer Lingus and United are happy with the initial results, which delivered an operating profi t in the fi rst year. “The combination of both parts is greater than the two components on their own, the operation is scalable, we could open up more city pairs in Europe,” says Kavanagh.
With the opening of the new
Terminal 2 at Dublin in November, Aer Lingus is well placed to capture price and time sensitive traffi c from Europe to the US as it starts to offer pre-clearance of US immigration formalities, effectively allowing it to operate its North Atlantic fl ights as US domestic services.
Ryanair and alliances Having its biggest competitor, Ryanair, also as its largest shareholder is a challenge. With limited equity groupings in the company’s shareholder structure there is an impact on share price. Whether Ryanair succeeds in its ultimate desire
to take over the airline remains to be seen.
That issue notwithstanding, Aer Lingus’ objective is to remain an independent airline, but having previously been a member of oneworld, the carrier is reviewing its strategy regarding future alliance membership.
It is “open to joining,” says Kavanagh, and is “undergoing a review of network and cost synergies of joining any alliance. We do business with all three [alliances] currently.” It works with oneworld through British Airways on Dublin–London; SkyTeam with KLM on Dublin–Amsterdam and Star Alliance through its relationship with United. “[Membership] is fi rmly back on the table as part of the strategic review,” says Kavanagh.
The progress from these revised strategies will be refl ected in Aer Lingus’ year-end results. Kavanagh concludes by saying: “The biggest plus has been demand led capacity, the network restructure and revenue management over the last year, but there is no room for complacency. In the context of a market in serious decline and a seriously stressed home market, there is a lot more to do in a challenging economic environment.”
RN
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