In its first year, 1936-37, Aer Lingus carried an average of one passenger per day each way between Ireland and Britain - a slow start! But during the second World War it provided a valuable link between the two islands - safer, many felt, than the boat service, which was thought to be under threat from U-boats.
However, when the war ended the company embarked upon a huge and ill-planned expansion. On some new routes, opened without any research, only 10 to 15 per cent of seats were filled, and I vividly recall, as a junior employee of less than a year's standing, suggesting to my boss that the Shannon-Paris route might usefully be reviewed given that no paying passenger whatever had travelled on this twice-weekly service during its first three weeks of operation!
The consequence of all that was a loss in the financial year 1947/8 which, as a proportion of our GNP, would be equivalent to more than €200 million today.
In January 1948, an executive committee was appointed by Seán Lemass to take over temporarily from an incompetent board of political appointees. A change of Government in the following month led to the immediate cancellation of a premature trans-Atlantic service which I had calculated would have filled less than 25 per cent of its seats and which would have lost 50 per cent more than the staggering Aer Lingus deficit of the previous year.
However, within a matter of months the company had been successfully slimmed down, uneconomic routes had been closed, and surplus aircraft sold, and it was virtually breaking even. Aircraft utilisation was subsequently maximised by reducing turnaround times to 20 minutes (as Ryanair has recently done once again), and by operating a 24-hour service to Heathrow Airport, where noise restrictions had not yet started to limit night-time operations.
Thereafter the percentage of seats sold was high - over 80 per cent on the London route - and demand during the course of both the day and the week was evened out by the introduction of what I believe were the first international excursion fares in Europe. By the late 1950s Aer Lingus was adjudged by an independent body to be the most efficient airline in Europe.
I left the company in 1958, and in the decades that followed I often worried about the increases in costs and fares that seemed to be slowing the growth of the airline, especially from the mid-1980s onwards. So, in 1986, as Taoiseach, I felt that I could not allow old loyalties to inhibit me from accepting a proposal by Jim Mitchell to licence Ryanair to compete with Aer Lingus. And in December of that year I discussed with the airline's chairman, Brian Slowey, steps that might be taken to turn it around. However the government changed in March 1987, and my ideas as to what needed to be done did not prove acceptable to my successor in office.
In the 1990s, as costs rose even further and traffic growth halted, Aer Lingus faced a series of crises. It is only with great difficulty that, after several changes of chief executive, the company has now finally been successfully turned around by its present CEO, Willie Walsh, with the loyal co-operation of the airline staff, who are now beneficiaries both of profit-sharing and of a 15 per cent share-holding.
Why did it all go so wrong? First of all, successive governments of both complexions, mesmerised by their concern about a marginal seat in Clare, persisted with a particularly restrictive version of the compulsory Shannon stop, which was not modified until too late to enable Dublin to become, as might have been the case, the preferred hub for Aer Lingus services between North America and provincial British airports.
Next, political appointments to the board of Aer Lingus, which were hugely in demand from party activists attracted by the reduced rate travel facilities enjoyed by directors, undermined that body's capacity to rectify management weaknesses. And, although in my experience the pilots' union, IALPA, was constructive and forward-looking, some of the other unions seemed to me at times to have been more concerned about their own agendas than with the staff in Aer Lingus.
Against that very negative background the achievements of the past two years are quite remarkable, and demonstrate just how much difference a really dynamic chief executive can make to a company. Within two years costs have been cut by almost € 350 million, or 30 per cent, and all the benefits of this have been passed on to the company's passengers. For, since 2001 the average European fare has been reduced by no less than 35 per cent, from 17.3 cents to 11.1 cents per kilometre flown. This remarkable outcome has, moreover, been accompanied by a return to profit at a higher rate than previously, after the net loss of €140 million incurred in 2001.
Aer Lingus is now shifting the centre of gravity of its activities away from Britain towards the Continent. For, whilst the Aer Lingus share of cross-Irish Sea air traffic has fallen, by contrast its Continental traffic has increased by over 27 per cent in a market that grew by only 11 per cent last year and in which Ryanair has been refusing to expand because of its row with Aer Rianta.
This year Aer Lingus is opening three new Continental routes from Cork and seven from Dublin. It is also reopening the Bristol route which it pioneered in May 1936, and the Copenhagen and Zurich routes that I initiated as research and schedules manager in 1957 - from all three of which the company, surprisingly, withdrew several years ago.
Interestingly this Continental expansion is being undertaken without any immediate increase in the size of the company's European fleet - which is, however, being rationalised by substituting between now and the end of next year 17 new larger Airbus 320s for the same number of Boeing 737s and short-haul BAe146s - the latter of which have already been withdrawn from service.
With a view to yet further expansion in Europe, Aer Lingus has also negotiated options on 10 more Airbus 320s. But, pending consideration of several overseas options such as the Far East, Australia, and South Africa, and whilst awaiting the negotiation of a Europe/US air agreement that would give it access to further destinations in the US, Aer Lingus has not yet ordered any more long-haul aircraft to add to its existing fleet of seven Airbus 330s.
It is clear that Aer Lingus has now effectively completed its reorganisation, and, as the Irish and European economies recover from the recent recession, we can expect a resumption of its traffic growth, temporarily halted in 2000, when it carried 6.5 million passengers, as well as further improvements in the impressive profit margin of 9 per cent on its turnover that it achieved last year.