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Dublin-based Aer Lingus is the national airline of the Republic of Ireland and has been publicly owned since its flotation in Oct-2006. Today, Ryanair and the Irish Government are its major shareholders. A former member of oneworld, Air Lingus is now a semi-low cost, point-to-point airline with a network of services within Europe, the UK and the US.
Location of Aer Lingus main hub (Dublin Airport)
Aer Lingus share price
1,138 total articles
81 total articles
Aer Lingus saw operating profit growth in 3Q2013, after a fall in the 1H result. Nevertheless, ongoing yield weakness on short-haul led it to reiterate guidance for lower profits in FY2013 versus FY2012.
The airline's rapid Atlantic capacity expansion has met with some success, but has also provoked a dispute with cabin crew union IMPACT. Assuming this can be resolved and that wet-lease partner ASL proves to be a successful operator, its long-haul niche looks like being a source of growth.
The bigger challenge is on short-haul, where ultra-LCC rival Ryanair is pushing out lower fares in large quantities. It seems that the battle between the two is intensifying just as Ryanair is being directed to sell its 30% stake in Aer Lingus.
Air Serbia’s recent rebranding from Jat Airways is the beginning of a number of significant developments for the airline which will also lead to changes in the Serbian aviation market. Through its partnership with Etihad Airways, Air Serbia will be establishing a medium sized hub in Belgrade with a restructured network featuring 12 new destinations and a new fleet of A319 aircraft. Through this hub other airlines within the Etihad’s ‘equity alliance’ will be able to take advantage of an increased presence in the Eastern European region.
As previously reported by CAPA, Serbia's Government and Etihad Airways established on 1-Aug-2013 a strategic partnership to secure the future of Jat Airways which was subsequently renamed and rebranded as Air Serbia. The partnership included the acquisition of 49% of Air Serbia by Etihad on 01-Jan-2014 and Etihad being awarded a five-year management contract
Etihad and the Serbian Government agreed to both inject USD40 million into the airline while both parties will each provide up to USD60 million in further funding. Debt from Jat Airways was also written off by the Serbian Government which will allow Air Serbia to launch from a clean sheet.
Those who attended Aer Lingus’ investor day in London in Sep-2011 will recall the drama of Christoph Mueller’s physical response to Ryanair’s CFO Howard Millar’s questioning on a number of topics. The Aer Lingus CEO stood to face Mr Millar as he spoke, fixed him in the eye and slowly moved towards him until the two were almost brow to brow.
This confrontation serves as a metaphor for the relationship between Aer Lingus and its largest shareholder. The irresistible force meets the immovable object.
Now the UK’s competition authorities have ordered Ryanair to sell its 30% stake, because its holding “had led or may be expected to lead to a substantial lessening of competition between the airlines … between Great Britain and Ireland”. Ryanair’s three bids for Aer Lingus were opposed by Aer Lingus, its employees, the Irish Government and the European Commission and consumed significant management time and effort. Rather than pursue it further, perhaps now it should cut its losses and concentrate on what it does best: beating competitors in the market place.
In early Jul-2013, Aer Lingus CEO Christoph Mueller declared that the carrier was “back to growth mode” (Financial Times, 4-Jul-2013), driven by Atlantic expansion. After 13% capacity growth on the Atlantic in 2013, Aer Lingus 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 Aer Lingus’ regional feed from the UK into Dublin is also operated by a third party (Aer Arann) and Aer Lingus itself operates short-haul flights for Virgin Atlantic.
With these moves Aer Lingus appears to be testing and developing the concept of a virtual airline.
Since reporting its maiden profit in 2011, Etihad Airways' financial results have shown steady and solid growth, even in the face of less than certain global economic conditions. The carrier’s 1H2013 results suggest the strength of its ‘equity alliance’ strategy, with the airline recording record double-digit growth in the period, with a particularly strong contribution from its partner airlines.
Revenue is at record levels, but the carrier only discloses bottom line results on an annual basis.
Etihad reported 2Q2013 passenger revenue of USD921 million, up 8% year-on-year. 1H2013 passenger revenue growth was even stronger, up 13% year-on-year to USD1.8 billion. Overall, total revenue (including cargo) grew to USD2.5 billion for the first six months of 2013, an increase of 14%. Of this, Etihad's partnership revenue comprised 20% of total passenger revenue in both periods.
Etihad Airways is looking to take its alliance and partnership strategy another step forward by negotiating a potential joint aircraft order. The joint purchasing of aircraft and other smaller products such as seats on the new 787 could provide some of the carriers that Etihad has invested in an economy of scale that otherwise would be unobtainable.
Etihad currently has codeshare partnerships with 43 carriers. Joint purchasing will likely be limited to some or all of the five carriers that are now partially owned by Etihad. So far negotiations with aircraft manufacturers have included airberlin, Air Seychelles and Jet Airways with Aer Lingus and Virign Australia potentially joining the discussions later. Other airlines that Etihad buys into in future could also join later but for now Etihad is not looking to expand its investment portfolio.
Etihad has emerged as a leader in building up partnerships outside the main global alliances. The Etihad alliance and similar initiatives by other non-aligned carriers have become a viable alternative to global alliances. A joint aircraft order would provide an example of the Etihad alliance even providing a significant benefit that global alliances have so far not been able to offer.
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