Aer Lingus transfer SNN-LHR flights to BFS

The_Conductor

KC61 wrote:

Belfast most certainly does have a link to/from London Heathrow already. bmi flies the route from Belfast City to London Heathrow eight times a day!

When you factor in the 4 different airlines on the route (ANA All Nippon Airways, TAP Air, bmi british midland, SAS Scandinavian Airlines) there are already 164 flights a week between Belfast city and LHR airports.....

Admittedly they are not exactly budget carriers, but EI's argument was on economic grounds.

Doesn't really add up somehow, unless you factor the hub deal for EI in Belfast into the equation- when it does begin to add up. The LHR route was probably the sweetener in the deal from EI's end.

BuffyBot

When you factor in the 4 different airlines on the route (ANA All Nippon Airways, TAP Air, bmi british midland, SAS Scandinavian Airlines) there are already 164 flights a week between Belfast city and LHR airports.....

They aren't different flights, they are all bmi flights. The other airlines codeshare with bmi..

The_Conductor

BuffyBot wrote:

They aren't different flights, they are all bmi flights. The other airlines codeshare with bmi..

Me bad /:

Terrontress

Have you read this morning that the trade unions are kicking up because the Aer Lingus staff in Northern Ireland will be paid less than their counterparts in ROI?

http://news.bbc.co.uk/1/hi/northern_ireland/6936081.stm

Does this refer to after the agreement (i.e. DUB) or will the BFS people get less than SNN staff currently get?

May explain a motivation for the move.

The_Conductor

Terrontress wrote:

Have you read this morning that the trade unions are kicking up because the Aer Lingus staff in Northern Ireland will be paid less than their counterparts in ROI?

http://news.bbc.co.uk/1/hi/northern_ireland/.stm

Does this refer to after the agreement (i.e. DUB) or will the BFS people get less than SNN staff currently get?

May explain a motivation for the move.

Well- the new staff in Dublin are on a lot less than their companions who were with the company prior to privatisation. The new contracts are not nearly as generous, on quite a few fronts. It could be that they are comparing the new contracts with existing staff?

antoinolachtnai

smccarrick wrote:

The reason it was sold- is Aerlingus had to be in a position where it could raise the finances to replace its fleet. The government was not in a position where it is allowed to either invest further money in the company to purchase aircraft or to make loans to the company (at favourable rates or otherwise).

Not true. The government just didn't want to put in the money, for very good political reasons. But there was no legal reason why they couldn't.

Private investors had no interest in Aerlingus, particularly given its labour relations history.

Mick O'Leary seems pretty interested. So was Willie Walsh.

Perhaps they could have gotten more money- there is no guarantee they could have done.

Hindsight is 20-20, but in retrospect it is clear that Michael O'Leary and a lot of other people were willing to pay a big premium over the flotation price.

What they did, along with selling off the company, was guaranteed that it would exist longterm- the biggest mistake they made was leaving it in a situation where Ryanair was able to mop up as many shares as they did.

This is the nature of selling the majority of something. You no longer own it. You have little further say in its future. If you don't want a particular party to buy the shares, you shouldn't have floated it. It's a free market.

You no longer get to have any input into whether the company has a long term future.

They airline that used to belong to the people of Ireland was a bankrupt, inefficient behemoth- without any clear path to the future. The pensions liabilities alone, similar to the situation at BA, actually exceed anything that the airline is/was worth. This has been rectified.

I wasn't talking about the airline as a whole. I was talking about the slots.

Yes, the people of Ireland owned the airline. They also owned the liabilities that were attached to the airline. Under state-aid rules, the government was no longer entitled to continue supporting these liabilities.

What liabilities would these be now? EI had little enough debt.

Have you heard of Alitalia?

I am not trying to support EI pulling out of Shannon, or what the government did- simply point out that EI's actions are on financial grounds- as were the governments.

No, the government sold EI on political grounds. The mistake they made was to sell the slots with the airline, and to retain a 25 percent share.

LordSutch

So now Aer Lingus now have their first 'UK Hub' located in the UK, and servicing the biggest 'UK Hub' at Heathrow! this can only be good for business & for all concerned, the passengers, the Airlines, the competition, the price war? and for the Northern Economy ...............

Poor little Shannon!

antoinolachtnai

I'm all for people making a few quid, but there is a thing called 'regional development' and 'the national interest' which is important, even though I can understand that the management of Aer Lingus don't have them as priorities.

FlutterinBantam

antoinolachtnai wrote:

I'm all for people making a few quid, but there is a thing called 'regional development' and 'the national interest' which is important, even though I can understand that the management of Aer Lingus don't have them as priorities.

Both "regional development" and " national interest" have nothing to do with Aer Lingus,or Tesco, or Superquinn ,or Supermac's....:rolleyes:

antoinolachtnai

In fact they do. Regional development is critical to providing avenues to allow business to develop in Ireland.

The_Conductor

antoinolachtnai wrote:

Not true. The government just didn't want to put in the money, for very good political reasons. But there was no legal reason why they couldn't.

Under EU State Aid rules, the government was not allowed to make any further financial contributions to Aerlingus, as they had done in the past. Alitalia and Olympic Airways, the Italian and Greek national carriers respectively, have both received state aids to assist them in purchasing new aircraft. The Commission is in the process of applying fines to both the Italian and Greek governments in relation to these aids, and Olympic Airways has been ordered to return almost 2 billion in illict funding- which it is thought will bankrupt them.

There most certainly was, and continues to be, legal reasons why the government could not put the money in.

dowlingm

smccarrick - antoin is in his own little world, circa 1960. Don't disturb him with stuff like EU competition law.

antoinolachtnai

But there was a sound financial basis for investing in EI and it could have been structured in a way which would have been non-discriminatory and would have allowed the investment. Rescuing bankrupt airlines is very different from putting money into strong and growing ones.

I am not saying that this would have been the right thing to do. It's just that this EU state aid rules thing is a mirage for the benefit of the unions.

I do think it was right to privatise Aer Lingus. What I don't think was right was to sell the slots with it. (I also don't think the state should have bothered retaining any shareholding.)

The political reason for selling was to allow the government to disengage permanently from EI's IR challenges.

So how come Olympic hasn't actually been shut down yet? Is the commission wating for the end of the summer season (same as 2005 and 2006, other years when they neven actually got around to shutting it down).

Zoney

I hope all the Dubliners laughing about this realise the implications of people in the Midwest losing their jobs; fewer taxpayers and the social welfare burden on the State increasing. If the Midwest doesn't get future investment either, it'll mostly just have to survive on handouts from the rest of the country for the foreseeable future.

What's bad for any part of the country is bad for the whole.

And this is certainly a pretty grim harbinger of things to come for the Midwest - it's pretty doomed if Shannon is further sidelined.

antoinolachtnai

I suspect there might be an element of Shannon bringing this down on itself - what were airport charges like at Shannon, for instance?

It is definitely very bad news. When you lose those types of flights, it's hard to get them back.

The_Conductor

Antoin- the Olympic airways saga is tied up in other fiscal irregularities the Greeks managed to get themselves involved in- most recently being the misapplication of a large tranche of EU funding designed to encourage their farmers away from the production of Theselonika var. tobacco. It has been declared to be in breach of competition law- there are negotiations as to what the actual penalty on the Greek will be (which will irrespectively include the full and total repayment of the illict state aid).

In the case of the Italians- Alitalia was found to have been granted more favourable landing conditions, profitable airport investments and restructuring aid than was available to Ryanair (the company who complained to the Commission). Obviously the Italians had zero interest in restructuring aid for Ryanair- so they were onto a winner before they ever went in the door..... Its not as clear cut a breach of competition law as the Greeks- who tried to blatantly lie about it, but its illegal aid nonetheless, which has to repaid by Alitalia to the Italian government.

Zoney- I don't anyone, from Sligo (as myself), Dublin or elsewhere is laughing about people anywhere loosing their jobs. The simple facts of the matter is that the country as a whole is haemorhaging jobs at the rate of just over 60 notified redundancies a week since the start of the year- and its getting worse. Irrespective of EI's decision- there are fewer taxpayers (as most of the recent job growth in the service sector is very low paid and non-taxable), the social welfare burden is increasing at well over twice the rate of inflation (and set to increase as pensions rise- after all the old people all went and voted, the younger people largely didn't), and we are all surviving on handouts- not just the people from the West/MidWest/SouthWest (in the first 6 months of the year the exchequer ran a 1.2 billion deficit- forecast to reach over 4 billion by years end). The country as a whole is in trouble- only its not PC to talk about it in the mainstream media just yet. Do we really think that all the Latvians/Poles/Lithuanians/Estonians who have helped our economy to boom over the past few years with cheap labour are going to hang around either- nope, they'll go where the money is (and the next stop on their list, ironically, is London). As for the Dubliner's laughing- if you check the exchequer figures you will note that the Greater Dublin region has subsidised the rest of the country at all times (compare tax receipts by Revenue Commissioner district with exchequer expenditure by county to extrapolate where tax payers money actually gets spent). Its not in anyone's interest for jobs anywhere in the economy to be lost- be it Motorola or Pfizer in Cork, Dell in Limerick, Ericsson in Clonskeagh in Dublin, Clientlogic in Swords- or indeed any of the other long list of redundancies announced over the past 2 months- which reads like a global Who's who...... Ireland, as a country, needs decent, well paying jobs that are not going to evaporate in a worsening international economic climate. We do not need the Mid West Development Board stabbing the SE Development Board in the back and every little parochial setup spitting tooth and nails at organisations a few miles down the road. We are a country and what happens to Ireland as a unit affects us all. Its time for all the petty rivalries between the different regions to be put to bed.

FlutterinBantam

I would hope people in Dublin are not laughing.

However it seems to me that there is a very defeatist attitude in that region

as a result of the LHR EI flts being withdrawn.

The_Conductor

antoinolachtnai wrote:

I suspect there might be an element of Shannon bringing this down on itself - what were airport charges like at Shannon, for instance?

It is definitely very bad news. When you lose those types of flights, it's hard to get them back.

They're not bad actually-

E4.20 per movement of aircraft on the runway +
E32.75 to park aircraft per 30 minute slot (for widebodied aircraft, smaller aircraft are less) +
E7.50 per use of the airbridge
E4 per passenger service charge
E5.50 per passenger security charge

In the context of large airports- they are reasonable enough...... *(Ryanair probably wouldn't agree with me though:) )

S.

dowlingm

One other issue with Heathrow is revenue allocation. When BA operates a flight from say Glasgow-Heathrow, some of the passengers are transferring to BA longhaul flights. The way BA's accounting works, this makes the feeder flight look low-yield because the fare is not divided by 2, but only a nominal amount is instead allocated to the feeder with the longhaul sector getting most.

Now, EI has a codeshare arrangement with BA for the SNN-LHR so the same doesn't strictly apply but it would be interesting to know how much BA does pay for the seats, because I regularly flew ORK-LHR-YYZ-LHR-ORK on a BA ticket but EI on the Cork legs and it cost virtually the same as the same ticket from LHR-YYZ-LHR.

This could possibly be why yield is an issue when load factors are high.

[edit to note: smccarrick - I don't think MOL is paying the sticker price at SNN...]

Slice

In the whole media hoopla on this issue not once has any one publin commentator whose come out against the move by Aer Lingus posed the question; what must Shannon do to become more competitive in attracting and retaining airlines to the airport?

FlutterinBantam

The old reliables:

Reduce cost base

More flexible work practices.

Aggressive marketing .

That would do for starters.

markf909

So much hyperbole over this with one local councillor on Morning Ireland predicting 40,000 jobs at risk :rolleyes:

So with the west being opressed as usual, how long before we have a politically motiviated fudge solution with Aer Lingus cutting Dublin and Cork Heathrow slots to placate "balanced" regional development?

bill_ashmount

markf909 wrote:

So much hyperbole over this with one local councillor on Morning Ireland predicting 40,000 jobs at risk :rolleyes:

How do these clowns get elected ? :rolleyes:

The_Conductor

bill_ashmount wrote:

How do these clowns get elected ? :rolleyes:

Unfortunately they get elected when the likes of you and me don't get up our arses and go to vote....... The electorate also seem to have amazingly short memories- so if they screw something up this year- its all forgotten about next year, or whenever polling comes around again. Politicians are vermin of the highest order......

Bomany

Bad news for the mid west sure. But in Donegal - remember us? The county with twice the national average for unemployment this is good news. Any increase in access via Belfast International Airport is bound to be bring economic benefit to Donegal. As a border county we are have closer links to the North and so any economic investment in their infrastructure will have some benefit for us. This is one part of the Republic where the Aer Lingus announcement is seen as good news.

jank

I sympahise with Shannon in this case, but the question must be asked about the shannon stop over and why cork airport is still bared from offering tranatlantic flights.

It looks like the state has its eyes of ireland being a one all ireland economy and for belfast to be states 2nd city.

Unfortunately to the detrement to the West

ednwireland

Bomany wrote:

Bad news for the mid west sure. But in Donegal - remember us? The county with twice the national average for unemployment this is good news. Any increase in access via Belfast International Airport is bound to be bring economic benefit to Donegal. As a border county we are have closer links to the North and so any economic investment in their infrastructure will have some benefit for us. This is one part of the Republic where the Aer Lingus announcement is seen as good news.

well said i use belfast international regularly and live in donegal town i flew to mexico last year through shannon, belfast is much better
as far as i can see this is a commercial decision by AL because of the inherited cost base at shannon easier to start afresh at belfast.
they will have the same competition as at shannon to stansted gatwick and luton not heathrow because of the scarcity of slots i doubt BA will reinstate its shuttle to belfast last time i was on it (before it closed) it was subbed out to maersk anyway so ba werent running it.
yes its bad news for shannon but between the hamstrung airport authority and thelegacy union issues i think it was only a matter of time before AL thought it could make more money elswhere.

bill_ashmount

smccarrick wrote:

Unfortunately they get elected when the likes of you and me don't get up our arses and go to vote....... The electorate also seem to have amazingly short memories- so if they screw something up this year- its all forgotten about next year, or whenever polling comes around again. Politicians are vermin of the highest order......

I have to plead guilty, I didn't vote. I may have to review my policy of abstaining from elections, going to be hard to find a good candidate though.

MG

ednwireland wrote:

as far as i can see this is a commercial decision by AL because of the inherited cost base at shannon easier to start afresh at belfast.
QUOTE]

Interestingly the share price didn't seem to reflect it being a good commercial decision with a small gain in share price on around the day of the announcement attributed to Oil price falls.

MG

markf909 wrote:

So much hyperbole over this with one local councillor on Morning Ireland predicting 40,000 jobs at risk :rolleyes:

Seems to me that he is doing exactly the job he was elected for. It's natural for the media to pick up on the big number but the underlying fact is that transport links are intergral to building and sustaining the long term economy of a region. I think what he was saying is that 40-50k jobs in the region are international companies which are not inclined to commit to a region without reasonable transport links. Therefore, in the medium to long term what he is saying may not be hyperbole.