Aer Lingus’ Turnaround

JetBlue, Ryanair, Uncategorized September 27 2004 0 Comments

Aer Lingus is in the process of a major turnaround, leaving behind its roots as a bloated Irish flag carrier to become a nimble, lowfare airline able to compete with Ryanair on its home turf. With Dublin only 6 hours or so from New York, the NYC-DUB route is about the same length as NYC-LAX; Aer Lingus figures if Southwest and JetBlue can be a lowfare carrier on transcon flights, why can’t Aer Lingus be a lowfare carrier on transatlantic. Some major changes:

-They’re slashing business class fares to around $2,600 round trip from NYC, about 40% less than competitors. The airline is hoping to fill about 75% of its premium seats, up from 35%.

-They’re trying to raise load factors to upwards of 95% from 40-60%. To accomplish this, they’re dropping in-season coach fares about 30%, with most fares in the $500-$1000 range.

-Internet bookings, now at about 30%, will reach about 50% in the next year or so. This is a massive accomplishment as I remember them being in the low single digits a couple of years ago. They offer a $30 discount online.

-They’ve eliminated business class on most intra-European flights.

-They’ve pulled their intra-European fares from GDSs (travel agents), saying that the fares are too low to warrant paying those distribution costs.

Compare this to how US airlines have, for the most part, reacted to their crisis and you’ll note how little US airlines have really changed compared to Aer Lingus, who knew that a massive restructuring was necessary to survive.


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