€1.2million for an under-performing Aer Lingus CEO

mayotom

so the Aer Lingus CEO paid €1.2million last year, I think that is far too much, as the airline has the potential to perform much better and he simply has not achieved that, Ok they have improved but have a long way to go, they have a serious debt pile and pension deficit which have not been addressed adequately. So why the big bonus?

cson

It's excessive but Mueller has done a cracking job with EI.

highlydebased

He has done monumentally better than Mr Mannion did. That is irrefutable.

saeglopur

mayotom wrote: »

they have a serious debt pile

Wha??? Where did you hear this?

Davidth88

I am not an industry expert , just an interested bystander/customer

In my opinion he seems to be doing a pretty good job.

Put it this way they are still here , still flying , and still have some sort an identity .

Wish he would roll back on a couple of the ' Ryanair esque ' things like charging for baggage , but otherwise good.

mayotom

saeglopur wrote: »

Wha??? Where did you hear this?

Financial reports here and on their own website here that is a serious debt for a relatively small airline. Much worse and they would have serious problems.

eitlean

He's done well for what he had to contend with. That's for sure. A crashed economy, high overheads and poor route network plans from past management.

BUT, does he deserve such renumeration? No. Not in my opinion. €600k would get much better returns in value for the airline if put into the dodgy pension fund which us taxpayers will probably have to cough up for if ever we're to offload the airline. If he were to decide to leave, no big deal really. The world is a wash with airline CEOs waiting for another shot at playing the game.

L1011

mayotom wrote: »

Financial reports here and on their own website here that is a serious debt for a relatively small airline. Much worse and they would have serious problems.

...their debt is less than their free cash. Much of the "debt" is also in the form of committed lease payments on craft.

coylemj

In fairness to Mueller, there are several factors outside his control which directly affect the profitabilty of Aer Lingus, the price of oil being one of them and if Israel bombs Iran, just watch the price of oil go even higher, the Americans cancel their summer holidays in Europe in droves and the EI share price go down to a few cents.

Dacian

I agree that 1.2M is an awful lot of cash:

However the EI 'debt pile' is quite normal. Most of it is essentially like a car loan or mortgage. The have E900M in positive reserves, 325M of which is actual cash in hand. (Again 2011 FY results) Yes they owe a lot of money on leasing for their aircraft......but this is quite normal for an airline. If the world economy goes down the tube overnight EI can cancel these leases (with penalties) rather than have invested all their money in aircraft they do not need.

The pension deficit is connected to EI but is not their responsibility. It is legally a separate trust fund that is funded by the employees of EI/DAA with statutory payments form the companies themselves. EI are very public on their position on this. Even if they decide to pop E100M into it it doesn't destroy the airlines essential profitability.

EI have been turned around in the last 2 years, spearheaded by this CEO. The previous guy seemed incompetent and didn't deserve E50K let along the million he walked away with. Under Mueller EI have started to move away from the Low cost attitude and back to a more balanced service level. Mannion just tried to copy everything Ryanair did, which is always going to be a losing battle.

And regardless of which airline you prefer, currently EI are the only airline in Europe that are directly competing with Ryanair in their homebase and managing to not just stay aloft but deliver 2 profitable years in the midst of the worst recession to hit its home market.

Saying that I will reserve judgment on the CEO until I see him fully turn EI around. The cost base has been greatly reduced, the airline is now efficiently run. The major restructing has taken place so when the global/european economy starts to pick up EI should be in a good position to expand their markets. I think this will be the teat of whether he is worth that money or not.

drdeadlift

I would love to know how he would over perform given the situation he inherited,hell they seem to be slowly on the up so whatever they pay him its worth it.

On a side note could you imagine looking at your current account with a salarie like that

basill

His notable achievements to date have been to:-

- give his employees a pay cut
- take away T&Cs
- defer aircraft orders
- charge more for ancilliary services
- stop flying half empty 330s across the atlantic from SNN

He is highly risk averse even with a cash pile to support a modest amount of expansion. He refuses to join an alliance even though every analyst points towards these as being key for survival.

At DUB airport AL are being squeezed out of medium and long haul routes. UA/CO are coming in from IAD with rumours of further routes such as Miami in the pipeline. Dubai is now the highest performing route for Emirates. AL refuses to fly to China following a request from the govt and has parked a return to the West Coast of the US.

So really apart from adding a few short haul routes here and there I can see little room for growth at all. In fact if anything we are at risk of being squeezed out completely from our own bases.

Ask yourself what other airlines would allow a foreign airline to come onto their patch and take their passengers from them in such a manner as the middle east, US and Canadian airlines have done.

Plowman

This post has been deleted.

flyaway12

basill wrote: »

His notable achievements to date have been to:-

At DUB airport AL are being squeezed out of medium and long haul routes. UA/CO are coming in from IAD with rumours of further routes such as Miami in the pipeline. Dubai is now the highest performing route for Emirates. AL refuses to fly to China following a request from the govt and has parked a return to the West Coast of the US.

UA/CO have removed capacity from their DUB-EWR route to add DUB-IAD, so there is no capacity gain, and reduced competition in the DUB-NYC market. UA will never fly MIA-DUB; they have no hub or even a sizeable operation in MIA. The only airline that would ever consider such a route would be AA. I cant really see how EI are being squeezed, when they have publically said that their J cabins are too small, and their forward bookings on Transatlantic routes are strong.

Dubai wouldnt never work for EI as they were catering purely for O&D routes. EK offers a huge amount of destinations beyond DXB to Irish passengers, so this route would always work.

The West Coast was not making money, so they dropped it. Mueller has said, time and time again, that they will return when market conditions allow the route to be operated profitably.

If China could be operated profitably, do you not think they would launch a route there? The fact is, they have a European network, and a small long-haul fleet that focuses on East Coast USA. Another US or Canadian will happen before China ever does

Bearcat

Aer Lingus is a very small, actually a bit player on long/medium haul routes. It has 6 330s plying the highly seasonal immigrant routes and 1 in IAD. Expanding further afield has a massive impact on their ability to crew aircraft in the summer season.......ALs 330 route are highly seasonal like it has been since they began to cross the Atlantic.

AL in the next 18mths will change dramatically re ownership so say the markets and the govt are definitely out. Once a solution of some sort sees the pension deficit addressed and me thinks those involved are in for a rear end toasting here......only then will one see Al ownership fortunes and possibly route fortunes dramatically change if a major player comes into town.....that major player though has to knock on Michaels door and Michael is not exactly known to roll over easy for a belly rub.

Until the above massive hurdles are sorted I see nothing except the current route structure remain on long/med haul and maybe the odd extra route thrown into the fray on short haul.

Bessarion

flyaway12 wrote: »

.........Dubai wouldnt never work for EI as they were catering purely for O&D routes. EK offers a huge amount of destinations beyond DXB to Irish passengers, so this route would always work......

This point is perfectly valid, however there were very advanced discussions with EK on a codeshare to 12 cities from DXB prior to the launch of the route. However EI operating a old tired aircraft interior with a LCC style service on the inaugural service scuppered that plan. EI should have put their newest aircraft with PTV's on that flight. This tiny yet significant detail shows the mis-mgmt that then-CEO Mannion allowed. The DUB-DXB route was his baby yet he didn't even take a day to day interest in it.

In addition EI had the entirely wrong schedule so passengers misssed the last wave of departures from DXB heading East. With the right times they could still have carried a decent amount of transfer pax. One thing they did get right was the freight, an informed mate told me that sometimes the cargo alone paid for the flight itself. (ie. 15+ tons on some days)