DERMOT MANNION has resigned from his position as chief executive of Aer Lingus with immediate effect.
It was expected yesterday that the airline would announce his departure in a statement to the Irish Stock Exchange this morning. The search to recruit a replacement to head the company is to begin immediately.
Aer Lingus chairman Colm Barrington will become executive chairman of the airline on a temporary basis until a new chief executive is installed.
Seán Coyle, who is currently Aer Lingus’s finance director, is among those who is expected to put his name forward for the position.
Mr Mannion’s resignation comes less than a month after Aer Lingus announced a €119.7 million pretax loss for 2008 and brings to an end a reign as chief executive that lasted just over 3½ years.
He took up the position in August 2005, joining the airline from Emirates. He succeeded Willie Walsh, who had left to take the top position at British Airways.
Mr Mannion oversaw the development of new long-haul routes to the US and the Middle East and presided over the privatisation of the company as the Government sold its majority stake and the airline was floated on the Iseq index in September 2006.
However, Aer Lingus suffered as a deepening recession put pressure on fares and led to a decline in load factors – the average number of passengers per flight.
Competition intensified on many of its routes, leading to cutbacks on both long-haul and short-haul services, with further schedule reductions expected to be announced.
Mr Mannion told shareholders in March that the company would record an operating loss of up to €55 million in 2009.
The company’s share price closed at 67 cent on the Iseq index on Friday. As recently as last December, Ryanair attempted a €1.40 per share takeover, having bid twice that amount for the company in late 2006. After fending off the two Ryanair bids for the airline, Mr Mannion faced controversy when it emerged that former Aer Lingus chairman John Sharman had agreed a change to Mr Mannion’s employment contract.
The change, which was subsequently rescinded, would have yielded Mr Mannion a €2.8 million payout in the event of his departure following a successful bid for the airline.
Mr Mannion’s hugely controversial decision to cut flights from Shannon to Heathrow in favour of a Belfast to London service was also blamed for the loss of jobs in hotels and other tourism businesses in the region. Aer Lingus eventually did a U-turn and partially reinstalled the route after a 14-month absence.
Rumours of a rift between Mr Mannion and some members of the Aer Lingus board had begun to circulate in recent months, although Mr Mannion told The Irish Times last month that he had an excellent relationship with the board.
His successor will take the reins at what is an exceptionally difficult time for the global airline industry.
