P. Littbarski
Well-Known Member
The Aer Lingus management team, which announced plans to leave the airline last November, will set up its own low-cost operation serving the Irish, European and US markets.
The new airline will have substantial backing from Irish and overseas investors and could enter service as early as January next year, according to industry sources.
Services are expected to be offered in various markets, but initially out of Dublin.
Passenger forecasts for Dublin Airport suggest further growth in the number of airlines serving the airport is possible.
According to the Airport Authority, passenger numbers are expected to grow by up to 8 per cent per year on average, in the next five years.
Several potential investors have approached the three departing managers with proposals to fund the new airline. The three management figures are chief executive, Mr Willie Walsh, chief financial officer, Mr Brian Dunne and chief operations officer, Mr Seamus Kearney.
A major part of the new offering is expected to be low fares to the United States. Mr Walsh has previously talked about transferring the low fares model from the UK and Europe to US routes.
In recent months Aer Lingus has started operating a charter service to Florida for the first time.
Industry sources suggest acquiring landing slots for the new airline should not present major problems.
Dublin Airport for example is not a "fully co-ordinated airport" which means it is relatively easy for new airlines to get landing slots. Even at airports where slots are controlled, special provision is normally made for new entrants.
An advertisement seeking to replace Mr Walsh as chief executive is expected to be placed in the newspapers next week. An Aer Lingus board sub-committee has been set up to oversee this process.
The three managers have been considering a number of options, including managing an existing airline, but plans for a new airline are expected to take precedence once the executives leave Aer Lingus, said industry sources.
The annual accounts of Aer Lingus still have to be signed off and the three executives are understood to be concentrating on this and other operational issues. Once the accounts are signed off, there is no obstacle to the executives departing.
A five-person transition team has been put in place by Mr Walsh to ensure issues for the year ahead can be managed properly. The members of this team are: Ms Liz White, human resources director; Mr Dick Butler, head of operations; Mr Brian Wheatley, group treasurer; Mr Greg O'Sullivan, head of finance and Mr Niall Walsh, chief operating officer.
The airline's results for 2004 are expected to be extremely strong, with operating profits exceeding €105 million and operating margins of about 12 per cent.
The airline has set itself an ambitious budget for 2005 and falling oil prices may also provide a significant boost to whoever succeeds Mr Walsh and his colleagues.
Meanwhile, the Government is still considering whether to allow the airline to access private sector funding. An announcement is expected before the end of the month. A Cabinet sub-committee, chaired by the Taoiseach, Mr Ahern, has met on several occasions but failed to reach an agreed position.
In the meantime, the Government has asked the Minister for Transport, Mr Cullen, to hold discussions on Aer Lingus with "the relevant stakeholders, including the trade unions".
The arrival of a new entrant could spark a major price war between the airlines. When the British airline, Go, started services to Scotland from Dublin in 2001, Ryanair responded by slashing its fares and Go eventually had to withdraw from the Irish market.
The new airline will have substantial backing from Irish and overseas investors and could enter service as early as January next year, according to industry sources.
Services are expected to be offered in various markets, but initially out of Dublin.
Passenger forecasts for Dublin Airport suggest further growth in the number of airlines serving the airport is possible.
According to the Airport Authority, passenger numbers are expected to grow by up to 8 per cent per year on average, in the next five years.
Several potential investors have approached the three departing managers with proposals to fund the new airline. The three management figures are chief executive, Mr Willie Walsh, chief financial officer, Mr Brian Dunne and chief operations officer, Mr Seamus Kearney.
A major part of the new offering is expected to be low fares to the United States. Mr Walsh has previously talked about transferring the low fares model from the UK and Europe to US routes.
In recent months Aer Lingus has started operating a charter service to Florida for the first time.
Industry sources suggest acquiring landing slots for the new airline should not present major problems.
Dublin Airport for example is not a "fully co-ordinated airport" which means it is relatively easy for new airlines to get landing slots. Even at airports where slots are controlled, special provision is normally made for new entrants.
An advertisement seeking to replace Mr Walsh as chief executive is expected to be placed in the newspapers next week. An Aer Lingus board sub-committee has been set up to oversee this process.
The three managers have been considering a number of options, including managing an existing airline, but plans for a new airline are expected to take precedence once the executives leave Aer Lingus, said industry sources.
The annual accounts of Aer Lingus still have to be signed off and the three executives are understood to be concentrating on this and other operational issues. Once the accounts are signed off, there is no obstacle to the executives departing.
A five-person transition team has been put in place by Mr Walsh to ensure issues for the year ahead can be managed properly. The members of this team are: Ms Liz White, human resources director; Mr Dick Butler, head of operations; Mr Brian Wheatley, group treasurer; Mr Greg O'Sullivan, head of finance and Mr Niall Walsh, chief operating officer.
The airline's results for 2004 are expected to be extremely strong, with operating profits exceeding €105 million and operating margins of about 12 per cent.
The airline has set itself an ambitious budget for 2005 and falling oil prices may also provide a significant boost to whoever succeeds Mr Walsh and his colleagues.
Meanwhile, the Government is still considering whether to allow the airline to access private sector funding. An announcement is expected before the end of the month. A Cabinet sub-committee, chaired by the Taoiseach, Mr Ahern, has met on several occasions but failed to reach an agreed position.
In the meantime, the Government has asked the Minister for Transport, Mr Cullen, to hold discussions on Aer Lingus with "the relevant stakeholders, including the trade unions".
The arrival of a new entrant could spark a major price war between the airlines. When the British airline, Go, started services to Scotland from Dublin in 2001, Ryanair responded by slashing its fares and Go eventually had to withdraw from the Irish market.
