Aer Lingus cut backs....

Fabio

With EI being in the news recently about their first loss in a number of years what do people on here reckon will be cut from service?

Long haul flights?

Danbo!

Well the cancellation of the LAX route should make some difference in november. Other than that I can see them thinning out routes (likely to be longhaul routes first) as in running them less frequently without cutting any routes entirely, but only time will tell.

Fabio

Yeah...I suppose we can expect to see prices go up too. Whenever I do a search they seem about the cheapest option to fly from Ireland to the States.

Our man in Havana

Seems strange that he is cutting the LAX route and not the SFO route.

FlutterinBantam

Cost base... that's what should be cut.

Noo frikken use cutting anything else unless you cut...what???


The cost base

Expect turbulence;)

Tenger

Bond-007 wrote: »

Seems strange that he is cutting the LAX route and not the SFO route.

SFO had more cargo on it so a more profitable route.


EI recently lowered staff costs by EUR 20M. They also shaved EUR 20M off their tech costs with a new contract with SR Technics. These savings have not been given a chance to fully take effect. So that 22M loss from Jan-Jun '08 doesn't take into account the new costbase for the second half of 2008 or next year. So costbase is not the only solution here.

And only 'losing' 22M in the current climate is relatively good,look at other Europeans airlines.....but obviously in reality it is not a good thing. I want EI to make a profit.

FlutterinBantam

Never said it was the only solution, however there is zing all use cutting routes unless your cost base can support your fares pitch and non capital operating costs.

my sources tell me that there is an extremely high level of hours worked at "double time" for whatever reason,and we all know that paying a lot of "double time" is not a sound economic practice in the long term, especially so in the harsh competitive world of low fares airlines.

Outsourcing and other methods may be needed to bring costs back to economic level as well as major work practice changes.

Tenger

FlutterinBantam wrote: »

Never said it was the only solution, however there is zing all use cutting routes unless your cost base can support your fares pitch and non capital operating costs.

my sources tell me that there is an extremely high level of hours worked at "double time" for whatever reason,and we all know that paying a lot of "double time" is not a sound economic practice in the long term, especially so in the harsh competitive world of low fares airlines.

Outsourcing and other methods may be needed to bring costs back to economic level as well as major work practice changes.

Have to agree her. In order to survive and hopefully prosper cutting routes can only ever be a short term response. You need to attract new passengers to fill your planes to regain profitability.

I do think EI need to differentiate their product from FR so the touted(in the papers) option of flying to non-central airports would be a bad idea IMO. EI will need a long time to be equal to FR in costbase so trying to compete at their level (not meant in a derogatory way)cannot work.

High levels of overtime have to be addressed.Under the new agreements I believe there is no more double time but still time and a half. From my experiance EI would rather be under staffed and use O/T to cover gaps than hire more staff. I worked in an operational office before. Our roster needed 8 bodies,purely to be present at the desk regardless of workload,we had 7 so everyone got a O/T shift each week. Great for me at the time but for the company not a good situation.

Preset No.3

Its people like Bramble and the rest I feel sorry for. I have a few cc friends and its always the main workers that are expected to take the hit. Still no suggestion that the new chairman will cut all the senior managers wages. Incidentally how much is the new chairman pay check?

Just a question in relation to the losses, wheres the money from the profits gone? Also how can they blame the losses on the cost of oil when most of the fuel for 2008 was hedged?

I dont see how much more that EI can reduce their cost base. Its a shadow of what they used to be like. The t/a service reminds me of something offered in the third world, and lets not even talk about premier.

So I throw it out there, what can you suggest EI do to lower losses? Because ultimatly it is going to the customer that pays for everything.

Maybe let go a few more middle managers that do nothing anyway and give senior managment a pay cut..........but its more than likely going to be the new cabin crew with a shiny new uniform (that they paid for) thats going to get the pay cut!

FlutterinBantam

Good suggestions there,management should take the pain as well.

However to have meaningful results very painful issues need to be addressed.

Ground handling: Could Servisair do it for less and outsource at Dublin??

Cabin Crew. again investigate agency workers trained up and now the responsibility of the agency rather than the parent company.

Root & branch evaluation of employee performance and productivity, with ad hoc sick leave/ absenteeism/performance on the job scrutinised thoroughly and anyone not cutting the mustard told to shape up or take a hike.

EI needs passengers but not in the workforce.

Fully realise 80-85% of the people out there work very hard ,but in todays economic situation the non performers need to be cut adrift.

That would be a start.

Victor

Heading into a downturn, it is better to have fewer staff, doing some overtime, than having more staff.

At least this way they can cut back on overtime to deliver savings, without the pain of implementing redundancies.

As they are sitting on a mountain of cash, they can tolerate aircraft sitting on the ground. Expanding their customer base when the overall market is contracting isn't good. To fill those second / third planes they would need to sell for lower than the marginal cost of operating the aircraft, thereby incurring more losses.

Tenger

Victor wrote: »

Heading into a downturn, it is better to have fewer staff, doing some overtime, than having more staff.

At least this way they can cut back on overtime to deliver savings, without the pain of implementing redundancies.

As they are sitting on a mountain of cash, they can tolerate aircraft sitting on the ground. ............................. To fill those second / third planes they would need to sell for lower than the marginal cost of operating the aircraft, thereby incurring more losses.

The problem with the EI system of O/T is that they require O/T for the airline to run. It is a constant thing rather than just a temporary solution. Therefore they cannot 'just cutback' the O/T.

EI does not do the FR thing of flooding a route to drive away competition. FR had alot of negative income routes. These are why FR is 'grounding' planes over the winter. They have the marginal routes. Look at EI,only recently adding a fourth flight on its Paris CDG route is has a very high load factor.

EI do need to look at their BFS base which is not performing as well as expected. The LHR and AMS routes have very bad load factors.

And infortunately for the people of Clare SNN has to addressed and a decision made on what EI want to do there.