Aer Lingus at 75

 

On the morning of May 27th 1936, five passengers climbed on board the inaugural Aer Lingus Teoranta flight. The De Havilland 84 flew from Baldonnel to Bristol and, to the dismay of the two fare-paying passengers, it arrived late; train connections were missed. But as it celebrates its 75th birthday, Aer Lingus has a size, a reach and a reputation that its founders would not have dared dream of. It was a flagship for the new Ireland.

The airline’s early growth was stalled by the onset of the second World War. Yet when peace returned, it quickly established a route network to the Continent and then to the United States. It played a role in the growth of Ireland’s tourism and industrial development that cannot be overstated. In an era when the private sector gave birth to few companies of significance, the airline represented the best of what an independent Ireland could offer. Chief executives such as J.F. Dempsey and Michael Dargan were men of flair and pillars of the business community.

When Aer Lingus celebrated its half century in 1986, it dominated aviation in Ireland. A year before, an upstart challenger had appeared on the scene. But with just one 15-seat aircraft, 25 staff and only a Waterford-London route, Ryanair was not giving Aer Lingus executives any sleepless nights. Much has changed since then.

Indeed, the primary concern of Aer Lingus management in recent years has been how they might curb Ryanair. Their strategy has evidently met with little success given that Aer Lingus is currently flying less than 10 million passengers a year and Ryanair is ferrying seven times that number. Aer Lingus has previously competed directly with Ryanair as a point-to-point low-fares operator with mixed results. Despite operating on the edge of the Continent, it dropped out of the Oneworld alliance. Now, it takes a different view. It wants to be seen to offer passengers something extra. It also wants to rejoin an alliance. However, it needs to reconcile being a low-fare airline with offering a higher standard of service that costs more to provide.

On its 75th anniversary, the Government must address Aer Lingus’s ownership. The State holds a 25 per cent shareholding to prevent Ryanair gaining a controlling stake. Given the Government’s need to sell non-essential assets, however, retaining that share is hard to justify. And just as Europe’s other airlines have been busy consolidating, it is hard to envisage how the future for Aer Lingus must not be as part of a larger grouping.