Saturday 27 May 2017

Aer Lingus rescue bid for Aer Arann not on the horizon

John Mulligan

John Mulligan

INDUSTRY sources last night ruled out any suggestion that Aer Lingus could move to acquire Aer Arann as the regional carrier struggles for survival.

Some insiders suggested yesterday evening that Aer Lingus could move to protect its association with Aer Arann by taking over the carrier and attempting to turn it into a profitable operation.

But people close to Aer Lingus dismissed any notion that the former state-owned carrier would make such an approach.

It was speculated that Aer Lingus could come under political pressure to save Aer Arann if its prospects further deteriorate. But as Aer Lingus chief executive Christoph Mueller continues to push through a major cost-saving programme, it's unlikely the company would be in any position to attempt such a takeover.

Such a move would also likely meet resistance from unions at Aer Lingus.

Meanwhile, thousands of passengers booked on Aer Arann flights that the regional carrier operates as part of a franchise agreement with Aer Lingus won't be immediately impacted by the appointment of an interim examiner last night.



Partnership

Aer Arann and Aer Lingus launched the franchise agreement in March this year, with the smaller carrier repainting four of its aircraft in Aer Lingus livery and cabin crew adopting Aer Lingus uniforms. The partnership was structured so that Aer Lingus bore no costs associated with it.

Aer Arann pays Aer Lingus a franchise fee, and, in return, the 12 routes operated under the agreement can be booked via the Aer Lingus website, giving it access to a much bigger potential pool of customers. The routes that fall under the agreement include services from Cork, Dublin and Shannon to cities such as Glasgow, Manchester and Bristol.

Earlier this week, Mr Mueller said that more than 100,000 passengers had been carried on routes operated under the franchise deal since it began and added that the partnership met revenue expectations. Aer Arann recently added a fifth aircraft under Aer Lingus colours to commence services from Shannon to Britain.

In a statement last night, Aer Arann said it intended that all its services, including its franchised Aer Lingus routes, would continue to operate as normal and that bookings could still be made.

Aer Lingus confirmed the deal remained in place. But Aer Arann's move into examinership could have a damaging impact on the Aer Lingus brand.

Irish Independent

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