Category: Archive

Continental now main hope for Shannon

February 17, 2011

By Staff Reporter

In what is the ultimate irony, keeping the former Irish flag carrier Aer Lingus flying across the Atlantic from Shannon next year will be largely attributable to the presence of Continental rather than any special loyalties on the former’s loyalty to Shannon.
In what is now proving to have been the smartest of moves, Continental was brought to Shannon in the early 1990s. Even then the strategy of the Shannon negotiators was to keep a Continental service to Newark in the air and thereby keep the pressure on Aer Lingus to maintain its year-round direct daily link to New York.
With the future presence of Aer Lingus on long haul routes being questioned under the latest crisis at the airline, Continental is seen as the only real trump card that Shannon holds.
Gone are the days when political pressure could keep a State-owned Aer Lingus operating year round through Shannon “in the national interest.”
The strategic importance of Shannon in channeling American tourists and business investment into the West of Ireland since the 1960s created the political imperative for year-round air links with the U.S. to be secure.
Through the ups and downs of the seasonal performance that still besets transatlantic travel to and from Ireland, Aer Lingus provided the link. But that was before the government decision to give the airline its commercial freedom with part-privatization.
Since the state shackles were removed in 2006, Aer Lingus no longer has to fall in with the wishes of the government shareholder. So there’s no repeat of the show of political muscle back in 1993 when Clare councilors threatened to defect from Fianna F_il and forced a climbdown by Aer Lingus and a guarantee of daily direct flights between Shannon and New York on a year round basis.
Now the Shannon-New York connection does not even figure on the priority agenda of Aer Lingus. These days, government ministers plead that they cannot influence the decisions of the privatized airline and even the collective and cross-party lobbying of bodies like the Mid West Regional Authority cuts no ice with an Aer Lingus management which does not even deign to reply to written requests for the opportunity to put the Shannon case.
Shannon is certainly not uppermost in the mind of newly installed Aer Lingus chief executive Christoph Mueller, who came on board in October when the airline was already bouncing around in the mother of all economic storms.
Coming on board at the height of the unprecedented economic crisis and gloom in Ireland, he is seen not so much as the man to take the controls and pull the airline out of a tailspin, but rather as the man charged with decisions on what is to be jettisoned so that Aer Lingus can actually stay in the air.
Drastic measures are being taken at Aer Lingus. Yet another round of job shedding is under negotiation in which the airline’s 400 pilots are proving most obstinate and digging in to resist cuts, not only in numbers, but also in salaries and working conditions.
The airline is again airing the option of recruiting and basing cabin crew in the United States in place of high cost Irish staff which is certain to prompt stiff resistance from the Irish Congress of Trade Unions as part of its crusade against jobs outsourcing.
The severity of the situation is deepened by outside factors and influences and is reflected in the actions already taken. With transatlantic passenger numbers disappointing throughout this year, the airline has cut routes to consolidate back to the old reliables of New York and Boston.
Aircraft have been taken out of service and while replacement aircraft coming into the fleet will consume nine percent less fuel and provide improved passenger comfort, savings will be eaten up by the price of fuel which has doubled since spring of ’09.
As the oncoming merger of British Airways and the Spanish flag carrier Iberia testifies, European airlines are in deep trouble and Aer Lingus is regarded by analysts as an airline in need of a partner. But the ownership structure under which deadly rival Ryanair holds a 30 percent stake and the Irish government a 25 percent one is not going to attract a bidder.
While Shannon is not a big concern for Aer Lingus, the airline and its schedules for 2010 are a mighty worry for Shannon, where problems have been piling up for the past five years.
Delta has pulled out its JFK New York service for the winter and U.S. Airways has gone further and pulled its Shannon-Philadelphia run for all of next year as part of major contraction on its long haul routes.
With the Dublin share of U.S.-bound traffic growing from a quarter to one third since the advent of “open skies”, Shannon is fighting a rearguard action to hold onto U.S. routes.
In particular, the great Shannon fear, which goes back to the ferocious defense of Shannon’s transatlantic gateway status of almost 20 years ago, is that Shannon will be reduced to seasonal direct connections to the U.S. and that this will have a devastating effect on morale and investor confidence in West of Ireland tourism and business.
Already, Aer Lingus has reduced direct Shannon flights to three days a week and, as local public representatives have been quick to point out, has selected the three leanest days of the week for the Shannon services.
While the shape of Aer Lingus schedules for 2010 is dependent on the “amputation rather than surgery” solution being pushed by Aer Lingus management, there are no glad tidings as Shannon heads into Christmas. As Aer Lingus moves to dismantle its Shannon transatlantic base, the word on the grapevine is that the New York-bound passengers from Shannon will be routed either through Dublin or Boston.
Already, the prospect of 16 hours of travel time flight from Shannon to New York via Boston has caused uproar among local council members in the Shannon region.
The loss of direct daily connections to New York throughout the year from Shannon will be seen as the thin edge of the wedge and a managed move towards purely seasonal direct services into the West of Ireland gateway. In decades up to the 1980s, Aer Lingus accused American carriers of creaming off the peak season business with such seasonal operations.
What has come to pass at Shannon is precisely in line with what Shannon lobby groups predicted when Aer Lingus won the right to non-stop U.S. flights into Dublin from 1993.
The cumulative effect of deregulation leading to open skies freedom, competition, privatization, and the removal of state support for strategic services has brought about the greatest uncertainty at the worst possible time.
A Shannon deal with Ryanair. which brought dramatic east-bound traffic growth but cost the airport for every passenger delivered, has gone sour and the airport faces a loss of 75 percent of its Ryanair services from April, 2010.
Besides costing the airport authority in marketing subsidies to Ryanair, the spending splurges of the Celtic Tiger era meant that 60 to 70 percent of the Ryanair traffic was of Irish origin and forced the airport into massive investment in expanded car parking facilities which will now lie idle if Ryanair goes through with its pullout threats.
So it’s “thank goodness for Continental,” in the words of one top aviation analyst.
Added the analyst: “Thanks to the foresight of the Shannon negotiators who brought Continental in, and their efforts in holding onto the airline, Shannon has access into what ranks as probably the most powerful hub operation in the USA at Newark. Keeping Continental on the route from Shannon to Newark is the best bet for keeping Aer Lingus on the Shannon-JFK run.”
Journalist and author Dermot Walsh has been associated with Shannon Airport as a publicist and campaigner since 1971.

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