3 September 2009 Edition
Aer Lingus losses - all Ireland aviation strategy needed
BY ROBBIE SMYTH
Aer Lingus got its 11th chief executive in 16 years this week as losses at the airline grew to €93 million for the first six months of 2009. Christoph Mueller takes up his post in an environment where short term knee jerk media reactions fuelled by the airline’s senior management immediately focused on more job and wages cuts at the airline rather than looking at the global issues of what is happening in world aviation right now and what is the best way forward for the Irish aviation sector.
The dire predictions at Aer Lingus ranged from a predicted loss of at least 500 jobs, to the company outsourcing much of the work now done by its 3,600 workers.
What was forgotten was that workers at Aer Lingus have negotiated a series of redundancy deals, changes in work practices and radical restructuring of the airline since the global economic downturn in the wake of the 2001 9-11 attacks on the World Trade Centre.
Aer Lingus losses also came in the context of an international downturn in the world aviation industry. Figures released this week by the International Air Transport Association (IATA) showed losses of $1bn a month in the first half of 2009 in airlines across the world.
In Europe 12 airlines lost $1.1bn between April and June, compared with a profit of $439m in the same period of 2008 so the Aer Lingus losses, while serious for the company, are not indicative of an Irish only problem. Even Ryanair is making losses and in June reported that it had made a loss of €169 million in the 12 months to the end of March 2009.
The $6 billion lost so far in 2009 is double the amount Iata said in December that airlines would lose for the whole year. The losses also came during the early part of the summer season where airlines normally make much of their profits.
However passenger numbers are up on many Aer Lingus routes, and in the short haul sector the average load was over 85% of seats.
On long haul flights Aer Lingus is filling 77% of its seats, down 4% on 2008. In July the airline carried 1.117 million passengers, an increase of 8.2 per cent on July 2008. The big problem for the airline is the losses caused by falling ticket prices, a scenario faced by every airline, even Ryanair.
What has been overlooked in the Aer Lingus financial statement is that the whole aviation sector in Ireland is facing serious difficulties. Aer Arran made 57 staff redundant earlier this year, while introducing average wage cuts of 7% across their workforce. The Dublin Airport Authority is negotiating with its workers on a €55 million cost savings plan with a possible 400 jobs lost in Dublin Cork and Shannon airports. Just 200 jobs will be saved out of a workforce of 1,135 in SR Technics.
In the absence of any action by Fianna Fáil Transport Minister Noel Dempsey the Irish aviation sector is being picked part piece by piece when a job protection programme allied with a long term focus on the entire aviation sector could help the industry through the current down turn.
This means focusing on not just Aer Lingus, but the wider aerospace industry, airports across the island and yes even Ryanair. Minster Dempsey needs to act now.