Tuesday 21 February 2017

Aer Lingus may line up Walsh's BA Oneworld alliance as partner

Published 15/09/2010 | 05:00

AER LINGUS yesterday played down suggestions that it was in advanced talks to join one of the three main airline alliances.

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Last night, a spokesman for the company said talks were ongoing -- but added that they were only at a preliminary stage with the three groups.

Press reports had indicated that Aer Lingus was in advanced negotiations with the Oneworld Alliance, as the airline looked at joining after a four-year hiatus.

Oneworld is believed to be the preference for Aer Lingus over the Star Alliance and Skyteam. British Airways (BA) is acting as the Irish airline's intermediary with Oneworld. Willie Walsh, BA's chief executive, is a former head of Aer Lingus.

Christoph Mueller, the CEO of Aer Lingus, said the airline would use whichever alliance made the most sense for them.

Connectivity

"Oneworld, say, might be the best alliance on paper, from the connectivity we gain and cost synergies," said Mr Mueller. "But if we have to pay more for a seat to Melbourne or Hong Kong than I currently pay with KLM, I can be a member of an alliance until the cows come home but my Irish customers will book themselves on KLM."

KLM is acting as intermediary for Aer Lingus with Skyteam.

"We have to discuss what they can do for us and what can we do for them.

"We bring the entire Irish market to the table, so I think everybody is interested in securing that for their alliance portfolio," he said.

A return to an alliance has been mooted since Aer Lingus began to move away from competing directly with low-cost carriers at the start of the year.

Low-cost model

Last week, Mr Mueller confirmed that the airline had abandoned the low-cost model and was returning to the "yield" (essentially the average fare per passenger) business model that most airlines used for decades.

"We abandoned the low-cost model entirely. We haven't stimulated demand with this since January of this year," he said.

Aer Lingus may add a second aircraft on the Washington-Madrid route, its only long-haul service not involving Ireland, after the venture with United Airlines turned profitable in five months, Mr Mueller said.

The chief executive added that he was "optimistic" that demand for flights between Dublin and the US would justify more seats, once the airport's second terminal opens in November.

Aer Lingus's share price closed at 97c, down 1pc.

(Additional reporting by Bloomberg)

Irish Independent

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