Aer Lingus wings clipped

The fate of Aer Lingus ‘s Belfast hub, launched with such a fanfare only a year ago in a highly controversial move from Shannon must now be in the balance as the airline posts frightful losses of 22 million euros. And with a “3-figure” million loss possible for 2009, as chief financial officer Sean Coyle admitted today.He added that the company’s cost per passenger is roughly double that of rival Ryanair.

With fierce competition raging between all airlines flying in and out of Aldergrove and City, it was a stinging blow to to reveal that after all the rows with staff in the Republic, Belfast passengers numbers were 60,000 behind their abandoned Shannon/ Heathrow link.

Aer Lingus sold just 176 seats on its Belfast Aldergrove to London Heathrow route for the first month of operation of the new route in January. A total of 32,364 seats are available on the return route, with three 174-seat aircraft flying three return trips daily.

A year after its controversial decision to switch Heathrow flights from Shannon to Belfast, Aer Lingus has cornered just 10% of the Belfast/London air market.

Aer Lingus defended the airline’s Belfast/Heathrow performance, saying market share “wasn’t the main consideration” and stressing the route’s improving performance.

But industry figures from the UK’s Civil Aviation Authority (CAA) confirmed that Aer Lingus carried about 87,000 passengers on the Belfast/Heathrow route between January and May, less than 10% of the total Belfast to London market, which came in at 888,000 for the five months.

Aer Lingus’s sole competitor on the Heathrow route, BMI, meanwhile, carried almost 220,000 passengers during the same five months this year..

As of July 2008, Aer Lingus had three Airbus A320 aircraft based at Aldergrove, serving eleven European destinations

Only three weeks ago, Aer Lingus said it had no plans to axe routes or reduce frequency on its services from Belfast despite crippling fuel costs.

Will that pledge survive these awful figures?

Meanwhile, good news in the announcement that the leading department store John Lewis is putting in another bid to open an all Ireland store at Sprucefield, shorn this time of the additional shop units that had caused such a furore with local traders in Belfast and Lisburn. The over-worked word “iconic” applies to JL even more than to Ikea whose opening at Holywood Exchange was regarded as such a coup.

  • kensei

    Well, had you listened to Radio Ulster this morning, you would have heard a robust commitment by Aer Lingus to maintain Belfast routes. They said they’d aimed for 500,000 passengers in Belfast in the first year, and had more or less made that.

    I doubt anyone in Aer Lingus thought they were going to walk into Belfast and become the market leader. If they did, they deserve fired. It’s clearly the potential for growth that has attracted them. What matters at this point isn’t absolute performance, but where they are as regards their targets. The downturn might hit a few routes and some jobs, but I can’t see the rationale for pulling out of Belfast at this point, a mere year after going in. If performance is poor in 5 years time, possibly.

  • slug

    Kensei

    I hope you’re right as the new services to Heathrow, Paris, etc are very good for Belfast.

    I was listening to Mannion on Radio 4 Today Programme this morning and they asked him about the rumours that EasyJet will merge with Aer Lingus. He denied it – but with a lack of strength. It sounded like it was something that could happen.

    Hope it doesn’t result in an EastJet level of service but it could result in a rationalisation in services from Belfast and a big reduction in competition – not so good.

  • Some of us pointed out last year that Aer Lingus were providing few new routes and were clearly trying to go head to head with Lyin’ air… and failing by the looks of things.

  • kensei

    slug

    It sounded like it was something that could happen.

    That would depend on the Irish Government, surely? And possibly various competition authorities.

    But that one might fly (boom boom). There has already been a spate recently, particularly in the US:

    http://www.independent.co.uk/news/business/analysis-and-features/airline-mergers-take-off-779834.html

    Yes, it would be bad for competition. but what we paying for air fares is probably unsustainable in the long run either way.

  • slug

    “That would depend on the Irish Government, surely? And possibly various competition authorities. ”

    The competition authroities wouldn’t be too concerned subject to some route divestitures. The Irish govt is another matter but EU rules prevent them from propping up a loss maker so can they really object?

  • Jean Baudrillard

    slug: ‘Hope it doesn’t result in an EastJet level of service’

    Have you flown with Aer Lingus recently? Their level of service is at most on a par and often below that of EasyJet. It may be a national carrier – but it’s long been of the budget variety.

    Is the John Lewis story really such ‘good news’? At first glance, yes, for jobs and investment. But what’s the net gain? How much wealth does such a store suck out of the local economy? Persumably more than it puts in or the owners wouldn’t be that interested?

    It seems that with this application they’re focussing on the ‘all Ireland’ approach – I guess it will strengthen the case for Sprucefield as a location over, say, Belfast.

    In the final planning decision the government should be looking at the value such a store adds to the total NI economy – a Sprucefield site has very little potential to add much.

    In the mouth of a recession it may seem churlish to complain but if this goes ahead it will be a poor decision.

  • slug

    Jean

    Yes I have flown Aer Lingus and I thought the service is good, and better than EasyJet at a good price. It has codeshare deals with BA and flys from Heathrow.

    “Is the John Lewis story really such ‘good news’? At first glance, yes, for jobs and investment. But what’s the net gain? How much wealth does such a store suck out of the local economy? Persumably more than it puts in or the owners wouldn’t be that interested? ”

    Interestingly its a worker-owned firm so it might benefit the workers who sign up. Also it brings better choices for local consumers. The “suck out more than puts in” thesis ignores a lot of benefits.

  • David

    Interesting that Aer Lingus claim that they have no plans to axe routes, as they have already axed at least one: their Belfast-Budapest route.

    I travelled on this route a couple of times. It was always almost empty and then they axed the route after about 2 months just before the summer holidays. I don’t understand why they didn’t market it a lot more, especially as it was the only new route that they added to the existing offerings from Belfast.

  • BfB

    Simple…. really.

  • Harry Flashman

    “chief financial officer Sean Coyle”

    See that’s their problem right away there, Hugo Duncan maybe or Gerry Anderson if they could afford him but Coyler’s best left to spinning the latest Charlie Landsborough record for big Maggie from Rosemount.

  • The bones of this story have been around since the beginning of the month. Keep up with the plot, Brian!

    It isn’t just Aer Lingus having problems.

    Yesterday, Ryanair announced it was ending services out of Cork [ORK] to East Midlands [EMA] (as of 2 Oct) and Prestwick [PIK] (4 Oct): that’s two of the seven routes they operate out of Cork, the equivalent of 200,000 passengers a year, and 6% of the traffic through Cork.

    There seem, as always with Ryanair, to be two completely different accounts. Ryanair is saying that Cork has increased charges. The airport is saying the hike is part of the rack-renting in the agreement: 100% remission in Year One; 80% in Year Two, etc.

    Meanwhile Shannon [SNN] are in a bigger pickle. They offered Ryanair such a deal that it froze out competition and the only other short-haul operator there is Air France. Yesterday, again, it was reported that Aer Lingus are possibly phasing out the direct flight from SNN to Chicago in favour of a dirct service from Dublin: blame that on Open Skies and the fall-off in traffic affecting all trans-Atlantic operators

    On the other hand, Aer Lingus carried 1m passengers in the month of July, 8% up on last year: the first time it has hit that number. Load factors, though, are down by 4.7%. Not surprising that, among the other Aer Lingus service cuts are Cork-Prague, Dublin-Copenhagen, Dublin-Riga. There seems to be a Cork-Lisbon route in prospect. It needs to be borne in mind that EI are currently refitting three of the A330s, which is why some strange rented equipment is appearing, and why some routes may be limited over the winter.

  • I don’t know if it has anything to do with it – but I do think it apt that Aer Lingus’ abandonment of a cúpla focal as Gaeilge on its inflight announcements may have had the opposite effect to that which was intended. It failed to turn on some unionist travellers it presumed would be turned off by the Irish language greeting – and the axing of the greeting, symbolic and all as it was, resulted in some nationalist travellers who would have entertained some ‘loyalty’ to Aer Lingus being turned off the idea of flying with the ‘national’ carrier which had shown such abject disrespect to a national language which many hold dear.

    Naturally I believe that most travellers look to the bottom line before booking a ticket – but when the bottom line is more or less the same across the board, other factors surely come into play.

  • esmereldavillalobos

    I don’t travel into central London from Belfast that often – I usually fly home from Stansted (its handier for me rather than a preference for the airlines though security is a nightmare). The Stansted Express is 30 minutes from London Liverpool Street and SleazyJet is substantially cheaper from BFS to STN than BMI or AerLingus BFS to LHR. Do many sluggerites use Heathrow regularly from Belfast rather than Stansted (or even Luton)? Just interested…

  • slug

    “Do many sluggerites use Heathrow regularly from Belfast rather than Stansted (or even Luton)? Just interested…”

    Yes. Stanstead and Luton are inconvenient for me.

    Aer Lingus is quite cheap, actually.

  • Briso

    Posted by David on Aug 28, 2008 @ 11:53 AM
    I don’t understand why they didn’t market it a lot more, especially as it was the only new route that they added to the existing offerings from Belfast.

    ———-

    They also added Belfast – Malpensa which is still going.

  • I lived in London, just around the corner from Paddington station, for many years and always flew LHR-BFS with BMI. As long as you booked a reasonable period in advance, it was rarely prohibitively expensive, and I could go from locking my own front door in London to opening my parent’s door in under three hours, although that was always slightly hairy…

  • Sorry, meant to say LHR-BHD.

  • feismother

    I travel to Heathrow quite often for one reason or another and usually use BMI which, as said upthread, is just as cheap if booked well enough in advance. I’ve gone with Aer Lingus too and have had no problems except the security staff at Aldergrove airport are the worst I’ve ever encountered.

  • oh for pity’s sake Brian. EI knew how to lose “awful” and “frightful” amounts of money before it either set foot in Belfast or had $100/bbl oil to contend with. Meanwhile the Shannon lobby aren’t mentioning that Cork’s LHR traffic is substantially up since the closure, so presumably Limerick folks are simply heading down the N20.

    At least the CAA publishes passenger numbers. The IAA doesn’t so we essentially have to take the operator’s word for it on routes ex Ireland to destinations other than the UK.

  • Is cosúil nach bhfuil brabús san chosc ar Ghaeilge.