Aer Lingus finally ready to go private
THE part-privatisation of Aer Lingus is the best way to secure the airline’s future, according to its chief executive.
Dermot Mannion has said the state-owned body needed €400 million ($493 million) in new capital to fund borrowing of €1.6bn for new aircraft. “I honestly believe, and I’ve had extensive meetings across the organisation, not just with unions, but with members of staff, and my view to them is that the best way of ensuring job security for all of us going forward is that Aer Lingus can continue to build on its successful track record. In order to do that, we need new equity,” he has said.
The Irish government backed plans last month for a partial privatisation of the airline, saying it planned to retain a stake of at least 25.1 percent in the carrier. Another 14.9 per cent being retained by the Aer Lingus workers through their Employee Share Ownership Trust.
About 60 percent of the carrier, which has has an estimated total value of around one billion euros, will be floated “as soon as possible”, the government said.
In talks with TTN before the government’s announcement, Mannion likened Aer Lingus current situation to that of Emirates Airline and the emirate of Dubai a few years ago. “Aer Lingus is facing the same challenges now as Emirates did. We are keen to grow, to improve airport facilities and bring more passengers through the airport. Aer Lingus has many opportunities before it. It is a successful, profitable carrier in Europe and is the most competitive in world for fares.”
With its new flight to Dubai, the airline’s first east-bound long-haul route, Aer Lingus is seeking to further grow its east-bound network, although he did not say where to. The market, however, has speculated about new routes to Bangkok or Shanghai, once the airline takes delivery of the two long-haul aircraft on order.
Dubai is currently one of its biggest routes, he said, with an estimated 70,000 passengers in the first year. The airline has a network in place for 21 destinations with Emirates.
The airline posted a profit of €82.6 million before tax for 2005. It has announced plans to to invest two billion euros in expanding and modernising its fleet over the next six years.
On the airport front, Mannion said Dublin airport was learning from Dubai’s experience. A second airport terminal should be completed by 2009 and permission for a new runway has been granted.
Mannion said that while Dublin has potential as a cargo hub, this is limited by the airport’s limited cargo capacity.
He told TTN he expected a period of uncertainty post privatisation, but that it wouldn’t make a difference in quality of service.