Monday 11 December 2017

IAG's low-fare brand could operate alongside Aer Lingus

Willie Walsh, IAG
Willie Walsh, IAG
Donal O'Donovan

Donal O'Donovan

Aer Lingus could operate alongside parent IAG's new low-cost long-haul carrier Level in the Irish markets, Willie Walsh has told the Irish Independent.

And he said IAG along with Ryanair stand to gain from a potential collapse of Alitalia.

Level was launched last year, initially on routes from Barcelona to North and South America, partly as a response to newcomers like Norwegian Air International (NAI) which is due to begin flights between Ireland and the US in July 1.

Mr Walsh said Norwegian's Irish push is not a concern for IAG's Aer Lingus unit.

"I don't think it's a particular worry, Aer Lingus has been doing that for many years," the CEO of IAG said.

Eventually, Level could operate alongside Aer Lingus on Irish/US routes he said. "Ireland is a market where Level could grow at some stage," he said. "Aer Lingus and Level could operate beside each other."

In Barcelona, IAG had not seen "cannibalisation" by Level of Iberia's business, he said.

"Level is making a new market among people who hadn't flown long haul previously, maybe hadn't flown at all," he said.

However, in the near term Paris and Rome are seen as more likely candidates to roll out Level initially, he said.

Willie Walsh was speaking after IAG - which owns Aer Lingus, British Airways, Iberia and Vueling - beat market expectations with its latest financial results.

IAG posted record first-quarter profits yesterday, and indicated a more upbeat view on pricing sending shares were up more than 6pc to 608 pence each in early trading, on the back of the news.

IAG said it expects quarterly revenue per passenger mile flown to register its first year-on-year increase since 2014 in the current quarter, which unlike 2016 will include the busy Easter period. "We're seeing an improving trend and it's moving faster than we would have expected," Mr Walsh said.

The group reported operating profit before exceptionals was up 9.7pc to €170m, even accounting for a €32m currency hit when it translated sterling profits are British Airways into euro. "We're seeing an improving trend and it's moving faster than we would have expected," Mr Walsh said.

He said IAG's Vueling as well as rival Ryanair are poised to gain if the latest rescue of struggling Italian carrier Alitalia fails.

"It (Alitalia) doesn't deserve to be in existence," Willie Walsh told the Irish Independent.

"If Alitalia disappeared it would be a blow to the customers who like it but capacity will be replaced overnight - including by ourselves," he said.

Irish Independent

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