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Aviation in Ireland is comprised of a few main airlines; dominant figures such as the established national flag carrier Aer Lingus and the LCC Ryanair - the UK’s second largest airline - are both headquartered in Dublin Airport along with Aer Lingus subsidiary Aer Lingus Regional and Aer Arann, Ireland’s third largest carrier. Aer Lingus also has bases at Shannon Airport, Cork Airport and Belfast International Airport.
The Irish Aviation Authority is a commercial state-sponsored company established to provide air navigation services in Irish-controlled airspace, and to regulate safety standards within the Irish civil aviation industry.
Airports in Ireland
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WestJet dips a toe in the trans-Atlantic market with Dublin service; any prospective partners there?
WestJet’s decision to use St John’s as a launching pad for a conservative experiment in assessing the potential for trans-Atlantic service is not a huge threat to Air Canada yet. But it does put WestJet’s larger rival on notice that even as Air Canada’s fortunes look to be improving, WestJet does not have any intention of leaving any potential sources of revenue on the table, including trans-Atlantic routes where it can effectively deploy its Boeing 737 narrowbodies.
In some ways WestJet’s move is not surprising given that the carrier has previously hinted at international market expansion beyond the transborder and Caribbean and Latin American markets it serves. But as the carrier has previously stressed, any move into a widebody aircraft operation is at least five years off as its immediate focus is on ensuring the successful launch of its regional carrier Encore and continuing to optimise its network.
The carrier is, however, opting to engage in an exercise to learn more about the trans-Atlantic market while juggling the addition of several new elements to its business – Encore, new fare bundles centred on a premium economy product and its continuous quest to expand its business passenger base. It also helps make potential European partners aware that there is another Canadian airline bidding for expansion.
easyJet's FY2014 pre-tax profit increased by more than 50% to its highest ever level and its operating margin returned to double digits after more than a decade at less than 10%. Its pursuit of a more passenger-focused and business-serving LCC model has driven it to improve and innovate in terms of product, with features such as allocated seating and a user-friendly website now being copied by the likes of Ryanair.
This customer focus, together with what the company has called “a benign capacity environment”, as competitors were forced to reduce seat numbers, has led to impressive unit revenue growth, while management has not lost sight of cost control. Its confidence in the future was signalled by a dividend totalling GBP308 million.
Looking into FY2014, however, the outlook for unit revenues is less certain as capacity growth steps up a little, and profits are unlikely to grow as rapidly as they did in FY2013. Nevertheless, easyJet's business model remains robust and should deliver sustained healthy returns.
A corporate leader of any organisation requires an unusual, sometimes extraordinary range of skills. Inevitably not every CEO has these; nor does having the skills necessarily always triumph over external forces. Timing is not everything but it is important. With time, those external forces change the skill sets needed, for example when an industry is undergoing major upheaval.
Arguably, given the complexity of the airline business, a leader in this industry has greater demands placed on him (rarely her; there are very few women CEOs). And today the world must seem a particularly hostile place for legacy airline managements and their workforces, under siege from all directions. Meanwhile the Gulf carriers and many new short-haul low-cost models are changing the demands made on competitors, as protectionism slips away and hiding places become scarce.
This CAPA report examines some of the features involved in making a great airline CEO – or not.
Following dramatic declines in airport passenger numbers in 2012 and 2013, Spanish airports operator AENA has decided to introduce an airport charge discounting scheme to offer incentives to airlines to grow their traffic in Spain once more. With plans being formulated to privatise Spanish airports, the success of this initiative will be closely watched by both industry participants and potential investors.
In this report, we examine traffic trends at AENA and consider whether they have been affected by higher airport charges. Our analysis suggests that there is a clear link and so action to reverse falling traffic numbers through lower charges seems a logical step.
The questions then are whether the discounts offered will have the desired effect and how sustainable will be any resultant growth in passenger numbers.
Ryanair is the biggest carrier in Spain by passenger numbers and its CEO Michael O’Leary has called AENA’s discount scheme “almost unachievable”.
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.
Ryanair saw its 1HFY2014 net profit increase, reversing the decline posted in 1Q. Indeed, its 2Q profit was its highest ever quarterly result. The quarter saw an increase in average fares, strong growth in ancillary revenues and a fall in sector length-adjusted costs per passenger. However, Ryanair also gave its second profit warning in two months, a reflection of what it sees as a weak fares outlook across Europe.
For an airline that saw compound average growth in passenger numbers of 18% per annum in the 10 years to FY2013, does planned growth of 2% in FY2014 and 3% in FY2015 mean that opportunities are drying up?
Announcing a return to allocated seating and a host of customer service initiatives and product enhancements, is Ryanair moving away from the purist LCC model?