Aer Lingus ! EI ! EIN !

Aer Lingus looks to relieve long-haul burden
Friday September 25, 2009
An Aer Lingus source confirmed to ATWOnline that the airline's ambitious cost-cutting plan is targeting "every single part of the company," especially its long-haul operations.

EI announced significant capacity cuts on its transatlantic network in June (ATWOnline, June 15) but has suffered further declines in bookings along with a "huge" decrease in business class traffic. "Taking major costs out is the only option," according to the source, who confirmed that EI's long-haul operation, despite comprising just a handful of routes, represents up to two-thirds of its operating losses (ATWOnline, Sept. 23).

Analysts are forecasting a full-year deficit of €120-€150 million ($177.5-$221.8 million), which the company has not denied.

Additional adjustments may include suspension of its loss-making Shannon-New York JFK service, allowing EI to concentrate on Dublin. The source indicated that the fate of the airline likely rests on successful achievement of the targeted cuts, confirming off-the-record comments from CEO Christophe Mueller that EI has a 50% chance of survival.


by Cathy Buyck

Aer Lingus to cut routes, 1,000-plus jobs after talks with unions fail
Thursday December 3, 2009 Aer Lingus 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 late Tuesday.

"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 Assn. and, "to a lesser extent," cabin crew 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 yesterday. Although a "majority" of EI staff "understands [the need] for significant and urgent change," the company said it now will "take whatever actions are necessary to stabilize the business" in the absence of an agreement.

EI 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 (ATWOnline, Nov. 10). Now, "in the absence of real cost savings being delivered from all employee groups," it said it will "have to resort to other measures."

The airline will "move to" eliminate additional loss-making routes, resulting in operation of fewer aircraft and requiring a manpower reduction "beyond those included in the [October] Transformation Plan." It did not specify which routes or aircraft will be cut. The number of redundancies could exceed 1,000, according to press reports. Another EI board meeting is scheduled for Friday.

Mueller said he "remain[s] confident that Aer Lingus can pursue an independent future," but Impact was not nearly as optimistic. The union called EI's decision "radical and severe" and said its proposal includes a "significant" number of job cuts it called "deeply unfair and devastating." It said EI 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, the company have 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 the company in exchange for concessions. "If [workers are] investing in the airline 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 as of late yesterday.


by Brian Straus

Aer Lingus slashes operations at London Gatwick base


Irish flag-carrier Aer Lingus is cutting back its London Gatwick base, less than a year after opening the station in a bid to expand its European operations.
The airline is withdrawing two of the five Airbus A320 aircraft based at Gatwick before April, and is deferring delivery of a pair of A320s on order by six months.
Aer Lingus is slashing its route network at Gatwick - which became the airline's first mainland UK base early last year - because it foresees weak demand for the first half of 2010.
"The group will therefore maintain its focus on tight capacity management to improve yields," it says.
Aer Lingus adds that the airline is also facing "continuing challenges in the UK operating environment".
Its London Gatwick network includes 14 destinations - among them routes to Munich, Vienna, Warsaw, Zurich and Vilnius - but the carrier says the three A320s remaining at Gatwick will only serve Dublin, Malaga, Knock and a new Cork route.
The changes will take effect from 31 March. Aer Lingus has also agreed to further deferral of Airbus deliveries, pushing back the arrival of two A320s from October-November 2010 to April-May 2011.
It states that the revised delivery schedule will come at "no additional cost" to the company.
Aer Lingus adds that, following measures already implemented to stem losses, it expects to make a "small" operating profit - before exceptional items - for the second half of 2009.
"This performance primarily reflects better-than-expected yields in the second half of 2009, which have been driven by removal of a long-haul aircraft in September and tactical route cancellations in November," it says.
Figures released today show that Aer Lingus' long-haul traffic was down by 19.6% for 2009, although short-haul rose by 8.6%.
Average long-haul load factor across the year increased marginally to 72.1% while that for short-haul rose by a point to 77.8%.

Irish flag-carrier Aer Lingus is exploring the potential for introducing regional jets to its network to operate routes which do not justify the use of larger types.
The carrier uses a fleet of Airbus A320 and A330 aircraft, and also serves UK regional connections with turboprops through a franchise arrangement with Aer Arann.
But a spokesman for Aer Lingus says that the carrier is "investigating the business case for smaller jets", adding that these would fit the 100- to 150-seat sector.
He says the jets would not necessarily be used on UK services, but be deployed on routes unsuitable for turboprops, to feed Aer Lingus' hub.
While the spokesman says that the study is at a "very early" stage, the airline has undertaken initial discussions with manufacturers.
Aer Lingus declines to give further details of the talks, and has not identified specific parties.
But the sector in which it has expressed interest includes types such as the Embraer 195, Bombardier CSeries and the Airbus A318 or A319.

aeroduO5 a écrit:
Les nord-irlandais sont des sous-traitants importants de Bombardier.

Aer Lingus Group (EI) 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.”

EI’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. EI said it is experiencing rising fuel costs month-to-month as it loses the benefit of fuel hedges put in place before spring 2011.

The carrier’s third-quarter traffic rose 3.7% to 4.43 billion RPKs on a 2.4% increase in capacity to 5.37 billion ASKs, producing a load factor of 84.4%, up 1 point. Long-haul traffic inched down 0.1% on 1.3% reduction of capacity, lifting load factor 1 point to 89%. Short-haul RPKs rose 3.7% on 2.4% higher capacity, leading to a 1.1 point improvement in seat factor to 82.4%. 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.

EI 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-€42 million.