Friday 30 September 2016

Stobart Air and O'Ceidigh could gain if IAG takes over €1.4bn Aer Lingus

Published 31/05/2015 | 02:30

Sean Brogan, the company's chief executive, said the franchise agreement will continue under IAG
Sean Brogan, the company's chief executive, said the franchise agreement will continue under IAG

Stobart, the company operating Aer Lingus Regional under a franchise agreement, expects to increase passenger numbers by two thirds if IAG gains control of Aer Lingus.

  • Go To

The company, which is owned by the UK Stobart transport group (45pc), Aer Arann founder Padraig O'Ceidigh (5pc), private equity fund Invesco Perpetual (40pc) and Cenkos Securities (10pc), expects the deal to boost passenger numbers by 2m.

Sean Brogan, the company's chief executive, said the franchise agreement will continue under IAG. It is a ten-year franchise agreement, now in its third year.

The contract protected the company against a change of ownership at Aer Lingus.

Brogan, the former chairman at Stobart Air/Aer Lingus Regional, took on the chief executive last year, after Julian Carr resigned six months into the job.

Stobart Air was known as Aer Arann until the company went into examinership in 2010.

The company was founded in the 1970s, was bought by O'Ceidigh in 1992 and signed a franchise agreement with Aer Lingus after it was bought out of examinership by its current owners in 2010, prompting a change of name.

Stobart Group also owns Carlisle Lake District Airport and London Southend Airport in the UK.

It operates flights under the Aer Lingus Regional brand between Dublin and Cork and regional UK airports such as Aberdeen, Edinburgh, Glasgow, Leeds Bradford, Manchester and Newcastle.

It ceased flights to and from Shannon in January. Until then the airline had flown between Shannon, Bristol, Birmingham and Edinburgh.

Brogan said a takeover by IAG would give the airline access up to 2m new 'connecting' passengers from the UK flying to the US through Ireland.

"Look at Newcastle specifically," said Brogan. "In 2014, Aer Lingus Regional connected 9,000 Newcastle passengers to or from the US through Dublin. But a further 300,000 Newcastle passengers went for London Heathrow, not Dublin, as their connecting point. These are passengers we can win.

"Why would they choose to fly via Heathrow when Dublin is less crowded and offers access to US immigration pre-clearance facilities?

"Especially since they will now be able to do this while earning British Airways frequent flyer miles. It is probably the best loyalty programme in the world.

"The other options is flying through Schipol. Again, that airport is very busy and does not have US pre-clearance facilities."

Sunday Indo Business

Read More

Promoted articles

Editors Choice

Also in Business