Tag Archives: Aer Lingus

PlaneBusiness Banter Now Posted!

home-typewriter copy 1.jpgGood evening everyone. This week’s edition of PlaneBusiness Banter is now posted.

What, pray tell, are we talking about this week?

I’m sure you won’t be surprised to know we talk a lot about the escalating disaster that is American Airlines. I think a lot of people are missing the bigger picture in terms of what is happening at the airline. This is not just a “pilot/management” pissing match. It’s much worse.

Meanwhile, across the pond, we try to get you caught up with all the latest potential “coupling” updates, including whether Qatar is going to get cozy with British Airways, whether British Airways is going to buy the Irish government’s stake in Aer Lingus, and whether or not Ryanair’s Michael O’Leary is still remotely interested in actually buying a piece of Aer Lingus or not. Our answer? No.

Back on this side of the pond, Air Canada’s CFO Mike Rousseau rolled out a lot of additional details about that airline’s new low cost subsidiary last week to a CIBC analyst conference. The information got investors excited apparently, as shares of the airline posted the largest gain of any airline stock we track for the week.

Reports say that Delta’s refinery subsidiary has started to make jet fuel. Don’t know about you, but I’m still excited about this project.

Another project I got to get a first hand look at last week that got me excited was Lufthansa System’s new onboard wireless IFE system, BoardConnect. I sat down with the folks from Lufthansa Systems at the APEX Conference in Long Beach. No question about it — the concept is the best option I’ve seen out there. If I owned an airline, I’d install it on my airplanes.

We have our usual letters this week, including a rebuttal to American Airlines’ claim that my tweet concerning the pilot contract terms harkened mostly back to the April Term Sheet.

Virgin America announced its second quarter 2012 earnings on Monday. Richard Branson can honestly say he has an investment in a non-profit entity in the U.S. Still.

Oh, and of course we address the major aircraft-related question of the week — why is it that windows in airplanes don’t open? And who is going to do something about this?

All this — and more — in this week’s issue of PlaneBusiness Banter.

Reader Comment on United Pilots’ Stand on Aer Lingus Deal

Tough crowd out there today.

From the inbox:

You are not serious about this whiny crap from UA pilots are you?”


Let me put it this way. Given what is going on at the airline — I would have expected the airline to have at least discussed this “innovative agreement” with its pilot union before it was announced. At least.

Actually, I’m more interested in an arm-wrestling contest between Ryanair’s Michael O’Leary and United’s Glenn Tilton.

I’d pay big bucks for that ticket.

United Airlines Seems Determined to Piss Off Employees; O’Leary Tees Off on News


Take one major airline.

Have that major airline use bankruptcy as an excuse to destroy its employee pension plans.

Have same airline continue to enjoy some of the most adversarial management/employee relations in the industry.

Add just one more objectionable move on the part of said airline’s management to the almost-boiling pot.


Back off and watch as the pot boils over.

Today that is exactly what has happened, as United Airlines’ pilots are reacting to the news that the airline plans to link-up with Irish airline Aer Lingus to offer flights between the U.S. and Madrid. Say what?


Starting next year, both airlines will market the flights and each airline will have their own flight numbers on the route.

But United Airlines’ employees will have nothing to do with the actual operation of the flights.

No, Aer Lingus will fly the planes with their crews. And provide the planes. United will handle the marketing for the flights.

According to a report in Bloomberg, “Aer Lingus and UAL will review the partnership after two years and may turn it into a ‘full-blown joint venture,’ with the Irish carrier owning 51%.”

Not surprising that the United pilots are not happy about this news. Looking at the details of the deal this looks like nothing more than a glorified wet lease.

Meanwhile, United Airlines continues to sit on a stagnant-to-declining fleet, and continues to announce furloughs for its own pilots and flight attendants.

In a message from the Chairman of the airline’s ALPA MEC, Steve Wallach told the troops,

“The day after reporting one of its worst quarterly financial results in history and after furloughing an additional 254 pilots (bringing the total to 606 pilots), United Airlines announced today that it has entered into what it calls an “innovative” partnership with Aer Lingus”….He then added, “Aer Lingus has advised the Irish press that this joint venture will operate an Aer Lingus aircraft with neither United nor Aer Lingus employees, under a separate operating certificate and under newly established wages and working conditions. Obviously, this partnership will be accomplished at the expense of United’s and Aer Lingus’ own pilots and other employees. This development, where United attempts to establish an airline operation without the use of United aircraft or employees, is nothing less than the outsourcing of jobs to an international company, and clearly demonstrates that this management continues to make business decisions without regard to its pilots and other employees…..The United pilots are exploring every option to put an end to the company’s blatant disregard and lack of loyalty to the United Airlines brand.”

By the way, we all should have known that Ryanair’s CEO Michael O’Leary wouldn’t sit around and be quiet on this development. As most of you know, Ryanair is in the middle of yet another hostile takeover run at Aer Lingus.

Today Ryanair issued a statement in which O’Leary said, “

Aer Lingus and United Airways share many similar traits. They both used to be big in the 1950’s and 1960’s, but sadly today they are just shadows of their former glory. Both have recently announced losses, job cuts and pay cuts. After months of trawling around looking for partners, it is a sad reflection on Aer Lingus that the best they could come up with is one of the weakest and biggest loss makers in the U.S. airline industry. Given the scale of United’s losses there is no guarantee that they will even be around in March 2010 to operate this “partnership”.

“It is hard to think of any transatlantic airline losing any sleep at the thought of being faced with the combined weakness of Aer Lingus and United Airlines on the Madrid-Washington route. Today’s announcement shows just how desperate Aer Lingus is to find a partner, any partner it can, even if the flights don’t start until March 2010. This so called “partnership” with another “loser” like United shows that Aer Lingus has no independent strategy, and no prospect of remaining independent.”

That’s what I like about Mr. O’Leary. He’s never afraid to tell us what he really thinks.

Ryanair Makes New Bid for Aer Lingus


Let no one say that Ryanair’s CEO Michael O’Leary is not a determined person.

This morning Ryanair announced that it will pay $1.78 (€1.40) a share — or $950 million in cash — for the remaining 70% of Irish flag carrier Aer Lingus. This price represents a hefty 28% premium over the current stock price.

Two years ago Ryanair tried to buy the airline, but only got as far as putting together a 30% stake in the airline.

Significance of the move? When was the last time we saw a low cost carrier purchase what is considered to be a Legacy carrier?

I suspect Mr. O’Leary may be successful in his attempt this time. There are too many things working in his favor as compared to two years ago.