Monday 26 September 2016

Aer Lingus got €13m sales boost from deal with Virgin

Published 13/04/2015 | 02:30

Aer Lingusn enjoyed a €13m jump in sales last year thanks to a deal with Virgin to lease planes and crew to the British airline
Aer Lingusn enjoyed a €13m jump in sales last year thanks to a deal with Virgin to lease planes and crew to the British airline

AER Lingus enjoyed a €13m jump in sales last year thanks to a deal with Virgin to lease planes and crew to the British airline.

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The agreement was made as Virgin Atlantic tried to create a short-haul airline to sell tickets for travel between towns and cities in Britain.

Virgin leased planes from Aer Lingus which it then flew under its own Little Red label. Aer Lingus repainted four of its Airbus aircraft in Little Red livery under the deal.

Little Red has not been a success and the deal has not been renewed. It runs out this September.

Virgin has been a critic of the attempt by trans-atlantic rival IAG to buy Aer Lingus.

Virgin Atlantic has said it wants to ensure Irish customers will be protected from any acquisition of Aer Lingus by the International Airlines Group.

Joe Thompson, who is Virgin director of Network and Alliances, told an Oireachtas Transport Committee earlier this month that Virgin was "agnostic" in relation to IAG's takeover of Aer Lingus and told the committee Virgin's sole interest was to ensure consumer interests were maintained.

The latest Aer Lingus annual report shows that the airline enjoyed a 45pc increase in revenue to €42.7m last year.

The report attributes most of the rise to the deal with Virgin and notes the agreement has since been cancelled. Another deal with Stockholm-based Novair ends this winter. "These factors will impact this revenue category in our 2015 results," Aer Lingus said.

Aer Lingus said in its previous annual report that it was breaking even following the deal.

Virgin's foray into short-haul proved financially disastrous and the airline said last autumn that it was closing Little Red completely by September 2015.

Figures published by the UK's Civil Aviation Authority showed Little Red's load factor - the average number of seats filled on its aircraft - was just 37.6pc.

Daily services between Heathrow and Manchester ended last month, while flights to Edinburgh and Aberdeen will stop in September.

Virgin said at the time that the decision was taken without discussions with Delta, which owns 49pc of Virgin.

The European Commission is investigating Virgin's partnership with Delta following allegations that the US carrier could be exercising influence over Virgin.

The closure highlights a lucky escape for Aer Lingus.

In 2012, the airline competed with Virgin to secure a licence to operate domestic British services between London Heathrow and Edinburgh.

Had Aer Lingus successfully bid for them, it would have marked its first domestic service in Britain. It already flies between Belfast and London.

Irish Independent

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