New direction for soaring airline

THIS WEEK’S interim results from Aer Lingus show that the airline is on track to financial recovery

THIS WEEK’S interim results from Aer Lingus show that the airline is on track to financial recovery. Davy is now predicting an operating profit of €21 million for this year (previous forecast €4.8 million) and €57 million in 2011.

The results also provided a window on the shifts in strategy that have taken place since Christoph Mueller took the controls almost a year ago. Aer Lingus has stopped chasing traffic by discounting fares and focused on maximising fares from reduced capacity.

Passengers will also soon be able to book a flight without having to pay separately to check in a bag. These new “best” fares have been trialled on four routes and bundle the flight, checked bag and gold circle points into the one fare.

“Some customers don’t want to have to tick 15 boxes on the website,” chief executive Mueller said on Tuesday.

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Aer Lingus will also be joining one of the big airline alliances, having quit OneWorld in Dermot Mannion’s time. But Mueller is hedging his bets for now.

“That decision is more complicated than a marriage because there are so many parties from [which to choose],” he said. “You have to sniff around and check out if there is a mutual match.”

Mueller has no plans to launch more overseas bases, having scrapped the one at Gatwick. “Of course, I am tempted to let the European customer experience our service; that would be a home run,” he said, before adding that Gatwick was “not very successful”.

The joint venture with United Airlines on Washington DC-Madrid on the other hand appears to be working well. More routes from Washington DC are likely from 2011 and the pair could seek a separate airline operator’s certificate for the venture.

This is all a far cry from recent years when Aer Lingus sought to become almost a mirror image of Ryanair. And it’s certainly a different vision than the one Michael O’Leary had for Aer Lingus when bidding for his rival.

So is it still relevant to think of Aer Lingus as a low-fares airline? “We are Aer Lingus and you get what you pay for,” Mueller said. “Our service is superior. It is stunning what you can get for such little money. That will continue into the future.”

Readers might like to know that “toilet fees . . . that is not to be expected from us”. What a relief.

Ciarán Hancock

Ciarán Hancock

Ciarán Hancock is Business Editor of The Irish Times