Friday 20 October 2017

Aer Lingus scotches rumour that it is to rejoin an alliance

John Mulligan

John Mulligan

Aer Lingus chairman Colm Barrington has scotched rumours that the airline is to rejoin an international alliance as the carrier unveils a new strategy to investors this morning.

There was much speculation that Aer Lingus could be about to announce its intention to join the Star Alliance group of airlines that includes members such as Lufthansa, BMI, Singapore Airlines and Air New Zealand.

But Mr Barrington said yesterday that there were no imminent plans for Aer Lingus to join any alliance, although the carrier was exploring all potential avenues open to it.

He also said it was "very unlikely" that Aer Lingus would re-introduce business-class fares on the Dublin-London route, as he quashed rumours of such a move.

Other sources also said there appeared to be no move by Aer Lingus to alter the fare composition and seating arrangements on the route.

One World

Aer Lingus was previously a member of the OneWorld alliance that includes airlines such as British Airways and American Airlines, but it left the group in 2006.

The then Aer Lingus chief executive Dermot Mannion said that membership of OneWorld had become less relevant because of the increasing number of direct flights that Aer Lingus offered.

He also said that the airline would have to invest up to €2m to enhance its reservation systems to meet the requirements of the alliance.

Since then, Aer Lingus has scaled back its long-haul and some short-haul services and postponed aircraft orders as it seeks to rein in costs and save as much as €97m a year. It has also reduced the number of Aer Lingus aircraft at its Gatwick base.

Aer Lingus management, including chief executive Christoph Mueller, will this morning attempt to persuade investors that a new strategy, backed by the significant cost-cutting measures that include the elimination of about 670 jobs, will provide the airline with a viable future.

Among those in attendance today will be two senior Ryanair representatives. The low-cost-carrier owns a nearly 30pc stake in Aer Lingus, while its one-year moratorium on making a fresh bid for Aer Lingus expires at the end of this week.

However, Ryanair chief executive Michael O'Leary has already said another bid for Aer Lingus is unlikely.

Aer Lingus yesterday appointed two new independent non-executive directors to its board.

They are former Air Canada chief executive Montie Brewer and Nicola Shaw, a director of Firstgroup's UK Bus unit. Mr Brewer is also a non-executive director of Allegiant Travel, the US airline firm in which Declan Ryan's investment company previously had a stake.

Irish Independent

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