Aer lingus +United?

la la land

rumours about that united may be eyeing up more than a passing interest in aerlingus...
any opinions?

Foggy43

United announced letting go 1,000 staff in addition to the 1,500 already announced, with a fourth quarter loss of $1.3 billion.

I doubt it somehow.

Released to the media January 21, 2009.

oztots

They lost a load on the whole fuel hedging thing didnt they?

Even if they wanted something to do with aerlingus they cant do much beyond code share.

diverdriver

Here's Mannion on the radio discussing this very issue.

http://www.rte.ie/business/2009/0122/aerlingus2.html

So it's on, basically a joint venture company.

FlutterinBantam

United/ALPA pilots have already reacted with a statement, extracts below:
"The day after reporting one of its worst quarterly financial results in
history and after furloughing an additional 254 pilots (bringing the total
to 606 pilots), United Airlines announced today that it has entered into
what it calls an "innovative" partnership with Aer Lingus.

"Aer Lingus has advised the Irish press that this joint venture will operate
an Aer Lingus aircraft with neither United nor Aer Lingus employees [??not
evident from the Irish press ], under a separate operating certificate
[??not evident from the Irish press] and under newly established wages and
working conditions. Obviously, this partnership will be accomplished at the
expense of United's and Aer Lingus' own pilots and other employees. This
development, where United attempts to establish an airline operation without
the use of United aircraft or employees, is nothing less than the
outsourcing of jobs to an international [sic] company, and clearly
demonstrates that this management continues to make business decisions
without regard to its pilots and other employees.

"The United pilots are exploring every option to put an end to the company's
blatant disregard and lack of loyalty to the United Airlines brand."


Hmmm think there is a fair bit of talking to do before this happens.

The stakeholders will not be over the moon, if my experience is correct.

la la land

is it the first step on a slippery slope towards a takeover?
joint ventures of this nature seem destined to fail.. or become 'fixed' into one of the organisations..
also the route choice seems BIZARRE-- washington to madrid? are EI just trying to correct one problem (iad-dub?) and create a whole new set of problems?

FoldedShirt

la la land wrote: »

is it the first step on a slippery slope towards a takeover?

Possibly. United are in need of a white knight. But until the law changes, Aer Lingus won't be able to buy them.

also the route choice seems BIZARRE-- washington to madrid? are EI just trying to correct one problem (iad-dub?) and create a whole new set of problems?

Washington is a United hub with feed from all over the USA. My understanding is that three A330s will eventually be based there, flying routes that United can't (due to lack of aircraft). United's fleet is geared towards high yield traffic. They don't have the money to expand the fleet and its inefficient for them to create a small subfleet for lower yield markets. Expect something like Rome or Athens to be next.

la la land

don't know about athens, but rome is a strong contender...its a V STRONG interline hub through DUB normally...plus the yanks always want to go to rome - expect somewhere in poland too:)

la la land

FoldedShirt wrote: »

United's fleet is geared towards high yield traffic.

is adding EI to the long haul component a bit like mixing oil and water --ie based on the assumption that people will pay high yield for the shorter segment w/ UA and then pay next to nothing for the longer EI segment?

FoldedShirt

la la land wrote: »

don't know about athens, but rome is a strong contender...its a V STRONG interline hub through DUB normally...plus the yanks always want to go to rome - expect somewhere in poland too:)

I think United are ultimately calling the shots on this one. The fact that Aer Lingus already interlines quite a few passengers a day from Madrid (and also Barcelona) via DUB to the USA is just a coincidence. Warsaw might actually fit the bill though - it would be mostly visiting friends and relatives traffic which is low yield. Madrid, Rome and Warsaw could very easily be the three routes.

is adding EI to the long haul component a bit like mixing oil and water --ie based on the assumption that people will pay high yield for the shorter segment w/ UA and then pay next to nothing for the longer EI segment?

On domestic flights in the USA, the service is invariably crap no matter what the airline. There's plenty of low yield capacity in the domestic fleet. The issue is that the long-haul fleet consists of a lot of 767s which aren't very big in the first place and tend to have a heavy emphasis on first and business class seats. These seats would be largely empty on flights to places like Madrid, Rome and Warsaw, and there wouldn't be that many economy class seats to fill with tourists and visiting relatives etc. Aer Lingus on the other hand has larger A330s in which you can pack in hundreds of economy class seats, and offer only business class (no first). While first and business class is where the likes of BA and Air France make their money flying transatlantic, it's still possible to make money on low yield traffic if costs are low (like Aer Lingus).

The more I think about it, the more sensible it seems.

Tenger

Thinking about this today.............its not as mad as I first thought. If EI plan no long haul growth out of DUB/SNN until 2011 they need to find a use for the 2 aircraft arriving next year,and another 2 in 2011. The 2 this year are fleet replacements. And currently the Summer schedule only requires 8 aircraft with 9 in the fleet.

By using 3 aircraft on the IAD-MAD route they use the United brand and a bit of Irish charm to entice US pax to fly with them to MAD. Thus they use the 'extra' aircraft until the Irish economy picks up,they don't need to defer delivery,they spread their risk into a different market,and perhaps spread the EI brand to a new market.

Slice

FoldedShirt wrote: »

I think United are ultimately calling the shots on this one.

I read somewhere that if a joint venture emerges from this Aer Lingus would have a 51% stake - to me that suggest that Aer Lingus have the stronger hand here.

I wonder if this give us a clue as to where Aer Lingus might base their next hub and if it's the beginning of a more aggressive trans-Atlantic, low-cost strategy