Monday, 20 April 2015

Aer Lingus Takeover

There is a lot of debate these days surrounding the IAG takeover bid for Aer Lingus. Lots of people are adamant that we should not sell our "national airline".
First of all, Aer Lingus is no longer a legitimate national airline. It is a private company in which the Government just happens to have a 25% stake. In actual fact, Ryanair brings a whole lot more to Ireland, in terms of passengers and tourism income, than Aer Lingus does.

Another sticking point is the Heathrow landing slots, which many believe could be sold, thereby affecting connectivity. It may be an issue for Shannon and Cork airports, which is troubling. But the Dublin-London route is the busiest twin city route in the world, I can't see connections between the two becoming an issue should a sale be agreed. Connections to London itself will be of little consequence in Shannon or Cork as Ryanair will still offer flights to Stansted and Luton. But it is the onward connections which become an issue, flights from Cork/Shannon via Heathrow on to wherever it may be. Again, if the routes stay busy and profitable, then there shouldn't be a problem. However, should passenger numbers drop off on these routes, IAG may well pull them. Then again, as Aer Lingus is a private company itself, it would be unlikely to keep a loss making route, unless it was subsidised by the government.



On the other hand, IAG would be keen to keep any transfer passenger within their umbrella. So Aer Lingus flights into Heathrow, connecting to British Airways flights could potentially become even more commonplace.

The future of many staff at the airline is also in doubt, and with good reason. For many years Aer Lingus was a lazy, lumbering national carrier, propped up by the government. The jobs were easy, laid-back and over paid. With the dawn of privatisation, the new management sought to streamline their staff, get more work out of them for less money. This obviously resulted in conflict with the staff who were used to having it easy. Who could blame them, when for so long they were getting easy money for less work. Many of the staff are lucky that the airline maintains some resemblence of loyalty to the staff, where another management team may have replaced them entirely with harder working, cheaper alternatives. IAG may take this line, and to be honest it would be a good thing for Aer Lingus, although obviously not for the staff.



Lastly, a recent opinion piece by Sean Barrett in the Independent suggests that a sale would damage economic recovery. I can't agree with this suggestion (although I am happy for someone to prove me wrong). Barrett suggests that links to the USA would be at risk in the event of a sale to IAG, therfore damaging our economic recovery as US businesses would be less attracted to Ireland. I believe that Barretts arguement more or less contradicts itself. IAG would want to maintain profitable routes, and if the trans-atlantic routes are as big a draw for businesses as he says, then IAG would want to keep them and make them more profitable. People seem to think that all IAG wants to do is cut routes and downsize the airline, they forget that it is a business, keen on making a profit, as is Aer Lingus. The same standards apply whether Aer Lingus is taken over or not. Bottom line, both Aer Lingus and IAG are businesses, profit is their goal. Any loss making routes would not be maintained by either, independent of the other. Likewise, profitable routes will be maintained by both.

Personally, I can't see an IAG takeover making a massive impact on our connectivity, but I am open to being proved otherwise.