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Aer Lingus braces for historic year

February 16, 2011

By Staff Reporter

By Harry Keaney

A mixture of sunshine and clouds, with the possibility of turbulence ahead.

That in essence is the picture facing Aer Lingus, Ireland’s national airline, as it announced last week what may be its last set of results as a semi-state company.

With operating profits up 7 percent while other airlines report losses amid intense competition, Aer Lingus’ results for the last year were, for the most part, regarded as satisfactory. The company carried 6.5 million passengers, an increase of 13 percent from a year earlier. TransAtlantic passengers numbers rose 17 percent, to 905,000, the numbers having been boosted by new routes to Los Angeles and Baltimore.

The airline also announced a new internet service, www.’rlingus.com, which is to start in November. Like other internet developments in the travel business, this is another that will further entice customers to bypass travel agents.

"We’d be hoping to get between 50 and 60 percent of our business from the web engine within 24 or 36 months. The market is demanding and needs online booking," Aer Lingus’ new group chief executive, Michael Foley, said.

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Aer Lingus also became a member of the Oneworld global airline alliance, with customer benefits having started last June. Agreements between Oneworld member airlines enable customers to benefit from better access to global route networks, improved customer-support services, closer linking of member airlines’ frequent-flyer programs, and access to more than 340 airport lounges for eligible frequent flyer members.

As Foley takes over, however, there are a number of issues he must have resolved in advance of Aer Lingus’ planned stock flotation next year. The company is currently facing a series of pay claims and threatened industrial disputes involving pilots, cabin crews, clerical staff and baggage handlers.

Complicating the situation is a dispute over which of two unions represents cabin crew staff.

In addition, the government still has to sort out a dispute over staff pensions and an enhanced employee share ownership scheme. The staff already owns 5 percent of the company but is in discussions over the price for almost another 10 percent.

Problems outside Aer Lingus’ control include rising oil prices.

Although there will be much debate about Aer Lingus in the run-up to its expected flotation, many analysts eventually see the company being taken over. At present, there are more than a dozen different airlines in Europe, a situation that observers see as eventually resulting in consolidation.

And while Aer Lingus aims to be what its chairman Bernie Cahill described as "a quality service provider," there were, he said, "issues that impact on our ability to deliver these standards."

These include rapid growth in passenger traffic, which increases the need for airports in Aer Lingus’ network to upgrade and expand their facilities. "In some instances, this necessary work may lead to a temporary deterioration in some service levels for our customers," Cahill said.

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