Category: Archive

Aer Lingus may strike deal with American or Delta

February 16, 2011

By Staff Reporter

Ray O’Hanlon

Aer Lingus is poised to go into an alliance with a major American airline and the partner of choice is expected to be named in a report to be presented to the airline’s board before the end of this week.

While Aer Lingus has been looking at all four of the world’s major airline alliances, reports in recent days suggest that the field has been narrowed to two groups, one of them headed by American Airlines and British Airways, the other with Delta Airlines as the leading member.

The Aer Lingus board of directors is due to meet Thursday to consider an alliance plan drawn up by airline representatives who have been in talks with other major carriers over many months.

The report will then be passed on to the Irish government, which is the main shareholder in Aer Lingus, and from there to financial analysts at Salamon Smith Barney for final scrutiny.

The bulk of speculation has centered on the Oneworld Alliance headed by Fort Worth-based American Airlines and British Airways.

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A recent report in the Financial Times stated that British Airways was considering buying a 10 percent stake in Aer Lingus as part of a deal. British Airways subsequently declined to comment, a not unexpected response given that airlines tend to zealously guard plans and strategies.

Similar caution was displayed by American Airlines this week in reply to a question from the Echo with regard to negotiations with Aer Lingus.

"It’s our policy never to discuss future business," said American spokesman Mark Slitt. Slitt said he could "neither confirm nor deny" that American Airlines has been talking with Aer Lingus.

One way or another, Aer Lingus will be entering an alliance with a far stronger hand than even a couple of years ago. Aer Lingus passenger numbers over the Atlantic rose by 9 percent last year and with a new route to Los Angeles starting up in May, the airline is set to burst through the million transAtlantic passengers a year barrier for the first time in its history.

An alliance with American or Atlanta-based Delta would allow Aer Lingus to both feed passengers to, and draw passengers from, a much larger number of U.S. destinations than its presently serves with direct flights of its own.

In addition, an alliance with a group of major carriers is expected to pave the way for an Aer Lingus public share offering in the next couple of years.

An Aer Lingus spokesman told the Echo that meetings with possible alliance partners would likely continue right up to Thursday’s board meeting in Ireland.

We’re not ruling anything out even at this late stage," the spokesman said.

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