No extra Aer Lingus capacity out of Ireland next year, says chief

AER LINGUS will not add any extra capacity out of Ireland next year because of continued weak demand due to the recession.

That was the message yesterday from chief executive Christoph Mueller to guests at a lunch hosted by the Leinster Society of Chartered Accountants in Dublin.

“There will be no growth in Aer Lingus in capacity next year,” Mr Mueller said.

This message has been delivered to analysts and investors in a recent roadshow by the airline.

Mr Mueller joined Aer Lingus in September 2009 and has been restructuring the airline to return it to profitability.

He said the recovery period for the economy here would be “very long and very slow”, and highlighted the direct correlation between air travel and economic growth.

According to Mr Mueller, air traffic into and out of Ireland has declined by 40 per cent over the past two years, and the airline is operating from a “zero base” in growth expectations.

“The demand will not reach pre-crisis levels any time soon, if ever,” Mr Mueller said.

The Aer Lingus chief executive said the airline has “abandoned the low-cost model entirely”.

“We haven’t stimulated the market since January of this year,” he added. “We haven’t seen a zero fare on Aer Lingus because we believe that it is not sustainable.”

On a brighter note, Mr Mueller said its joint venture with United Airlines, which flies a long-haul service from Washington DC to Madrid, was “profitable after only five months” of operation.

They are now discussing adding a second aircraft in 2011 to operate another service.

“We will try to escape wherever we can.”

Mr Mueller said Aer Lingus had also been successful in attracting transfer passengers for its transatlantic flights from Dublin.

“We have today sometimes a long-haul aircraft with 80 per cent passengers . . . so only 20 per cent of people on board are travelling to or from Ireland,” he explained. “The rest is coming from Barcelona, from Paris, from Amsterdam, from Dusseldorf and from all over the place.”

Mr Mueller said that without this transfer traffic, Aer Lingus’s long-haul flights to the United States would probably have made a loss in the first half of this year of more than the €80 million-plus it recorded in the same period of 2009.

“We are actively escaping the [recessionary] environment [in Ireland],” he said. “We have no other choice.”

He said the new Terminal 2 facility at Dublin airport, which is scheduled to open in November, could help Aer Lingus build the transfer traffic for its transatlantic flights.

Mr Mueller said the airline’s regional franchise service with Aer Arann was performing well. He said Aer Lingus would help Aer Arann in whatever way it could to emerge successfully from the examinership process.

It would not invest directly in Aer Arann, however.

“I want to take the opportunity to reassure the travelling public that we are on standby . . . we will do everything to make that work,” he added.