All is not well with Aer Lingus.
This is a once proud carrier which we have worked closely with over many years and regard with the sort of respect and affection one usually reserves for old and trusted friends. But as 2009 draws to a close things aren't going well for them.
This week they have lost their dynamic Financial Director (Ryanair trained) and also have come to impasse with the Pilot Unions over necessary cost reductions. They have told the Irish Government, who own a 25% stake, that 1,065 staff will have to go (voluntarily or not) by March 2011. The relatively new CEO has indicated that he wants to take the airline away from reproducing a Ryanair-like low cost model airline, a desire which has been major driver of all its decisions since Willie Walsh became CEO in 2001, and head towards a more traditional legacy model with code share partners, airline alliance membership and more expensive traditional distribution methods.
Lurking in the background are Ryanair, owners of a 29% stake in Aer Lingus, who can't make a third bid for the airline until late January 2010 and where Michael O'Leary could regard an approach by the Government or the management of Aer Lingus to rescue it as the justification for his unique management style and the pinnacle of his career before retiring to enjoy his fortune.
Gazing into the crystal ball....... National carriers, like Aer Lingus, are not just commercial entities they are invested with a nation's pride and strong political baggage. Aer Lingus should not fold, but its hard to believe that it can continue to stand alone, The choice of a new Euro-centric CEO indicates a view towards a European partner perhaps, rather than an in-house Irish firesale. Equally the move to a more traditional airline business model would widen the choice of potential saviours who could be courted with increasing interline traffic over time. Or will there be some North American intervention perhaps, the US was built on Irish humour and grit, perhaps there is an US airline entrepreneur of Irish descent waiting in the wings..?
To be sure, 2010 will be an interesting year for the green airline with the shamrock on the tail.
This is a once proud carrier which we have worked closely with over many years and regard with the sort of respect and affection one usually reserves for old and trusted friends. But as 2009 draws to a close things aren't going well for them.
This week they have lost their dynamic Financial Director (Ryanair trained) and also have come to impasse with the Pilot Unions over necessary cost reductions. They have told the Irish Government, who own a 25% stake, that 1,065 staff will have to go (voluntarily or not) by March 2011. The relatively new CEO has indicated that he wants to take the airline away from reproducing a Ryanair-like low cost model airline, a desire which has been major driver of all its decisions since Willie Walsh became CEO in 2001, and head towards a more traditional legacy model with code share partners, airline alliance membership and more expensive traditional distribution methods.
Lurking in the background are Ryanair, owners of a 29% stake in Aer Lingus, who can't make a third bid for the airline until late January 2010 and where Michael O'Leary could regard an approach by the Government or the management of Aer Lingus to rescue it as the justification for his unique management style and the pinnacle of his career before retiring to enjoy his fortune.
Gazing into the crystal ball....... National carriers, like Aer Lingus, are not just commercial entities they are invested with a nation's pride and strong political baggage. Aer Lingus should not fold, but its hard to believe that it can continue to stand alone, The choice of a new Euro-centric CEO indicates a view towards a European partner perhaps, rather than an in-house Irish firesale. Equally the move to a more traditional airline business model would widen the choice of potential saviours who could be courted with increasing interline traffic over time. Or will there be some North American intervention perhaps, the US was built on Irish humour and grit, perhaps there is an US airline entrepreneur of Irish descent waiting in the wings..?
To be sure, 2010 will be an interesting year for the green airline with the shamrock on the tail.
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