One More Thing

Eircom thinks in black and white; Jetbird hits speed bump; Superquinn chairman talks shop; Aer Lingus plans shrouded in mist

Superquinn man may save the day

SUPERQUINN EXECUTIVE chairman Simon Burke has managed to get himself caught in the crossfire of a standoff at listed British pub chain Mitchells Butlers (MB), operator of All Bar One and Harvester.

Burke was approached recently about becoming chairman by the pub group, which is in dispute with its largest shareholder, Joe Lewis’s Piedmont vehicle, which holds 23 per cent.

MB claimed that Burke and its two other potential candidates for the job were rejected by Piedmont.

But, in a strange twist, Lewis has since proposed that Burke, former Debenhams chairman John Lovering, and two other businessmen be appointed non-executive directors at the company’s annual general meeting on January 28th.

“We’re putting ourselves forward and it’ll be down to the shareholders to decide,” Burke told me yesterday. The shareholders include JP McManus and John Magnier, who have a 17.6 per cent stake.

“We’re going to try and be our own men and try and help the company to make money for the benefit of all shareholders.”

Burke is well regarded in the UK, where he helped turn around the fortunes of toy retailer Hamleys. He is seen as a straight shooter and something of an honest broker in the standoff between MB and Lewis.

“Our attitude is that if it’s appealing to shareholders then we’d be happy to help and if not then no harm done and we’ll be on our way,” he said.

Burke already has a lot on his plate with Superquinn, although his load has been eased somewhat by the appointment earlier this year of Margaret Taylor as managing director.

Burke said this year had probably been the worst he had experienced in his time as a retailer.

“It’s been tough . . deflation is a nightmare for retailers,” he said.

“We’re holding our own; our market share is steady [at about 7 per cent] but it’s a difficult market.”

Sales are down, a store in Dundalk has closed, and Burke admits that proposed store openings have been put on the back-burner while the economy remains in recession.

“You just wouldn’t do it in this climate but we haven’t changed our minds on them. If conditions improve we’ll move them ahead.

“The outlook is not good at the moment. Cross-Border shopping is a menace . . . it’s more intense than last year.”

Unlike several department stores and fashion retailers, Burke won’t be opening Superquinn’s large stores on St Stephen’s Day.

“I just don’t think the demand is there. We might open a couple of convenience stores alright but I won’t be opening the big stores.”

Jetbird loses executive

IRISH AIRCRAFT leasing executive John Slattery has stepped off the board of Jetbird, the fledgling executive jet airline founded by his brother Dómhnal.

Slattery resigned on November 4th but insists it has nothing to do with Jetbird’s lengthy search for about €6 million needed to launch in the new year.

“I’ve been contemplating it for quite a while,” Slattery told me from New York yesterday. “I’m just too busy with the day job.”

Slattery set up an aircraft leasing business called GreenStone Aviation this year, raising $100 million from investors.

“I’m confident that Jetbird will be successful. They’ve hit a couple of speed bumps along the way but no more than many other businesses recently. The business plan is robust and the signs are positive . . . Jetbird will focus on the Rhine-Ruhr [industrial] area.”

Eircom restricts printer use

WITH ITS net debt just shy of €4 billion, Eircom appears to be examining every expense for savings. The telco this week introduced new rules on the use of company printers at its swanky new head office beside Heuston station.

Access to colour printing will be removed on December 21st “unless authorised in advance at director level”.

Staff with an “absolute need for colour” must complete a special request form and seek “director sign-off immediately”.

Forms had to be submitted by today. Those received after that date will be treated on a first come, first served basis. “Reactivation delays should be expected.”

Staff were also informed that a “drilldown per user” would be available on request by directors and “budget holders” and “bad practice” on personal printing “will result in users having a limited number of prints available each month”.

“You may be required to justify large print runs,” the notice added.

Cost-cutting up in the air as Aer Lingus hires workers

Aer Lingus’s announcement yesterday that it would be hiring 96 former SR Technics workers to carry out in-house line maintenance on its Dublin-based fleet makes you wonder about the airline’s plan to radically transform its cost base.

It seems a strange move for a company looking to shed 676 workers and cut €97 million from its cost base, even if the maintenance workers will be employed by a separate entity on Aer Lingus terms and conditions.

Let’s not forget that Aer Lingus spent years trying to get the former Team Aer Lingus (now SRT) workers off its books.

In parallel with this, talks have resumed with pilots on its cost-cutting plan at an independent tribunal chaired by Labour Relations Commission chief executive Kieran Mulvey. The pilots are the last group of workers holding out on a deal. The two sides appeared to be poles apart during their talks at the commission, but the mood music has changed and we can expect an agreement shortly.

So what’s changed? Seán Coyle’s departure appears to have helped matters. The pilots were long suspicious of his role at Aer Lingus given his previous association with Ryanair, a company that consistently refused to deal with the pilots’ union, Ialpa.

Coyle was pushing the cost agenda hard and the pilots won’t have shed any tears at his leaving.

Coyle also had a difference of opinion with new Aer Lingus boss Christoph Mueller over strategy. The German wants more alliances and joint venture rather than the plain low-cost, point-to-point strategy favoured by Coyle.

Once again, analysts have been left scratching their heads about the airline’s strategic direction. Seasoned watchers fear that nothing will really change.

Aer Lingus is holding an investor day on January 26th. Whatever strategy he has in mind, Mueller would do well to have it prepared by then.

LITTLE THINGS

THEY BROUGHT us digital television, personal video recorders and high definition, and now satellite operator Sky wants to bring 3D to our livingrooms, with special glasses included.

Sky, which has about 630,000 customers here, this week ran demonstrations at its Earlsfort Terrace office of its 3D offering, which will get a soft launch in Ireland early in 2010.

Sky is tight-lipped about the extra subscription cost to consumers.

But viewers will have to buy a special TV (surprise, surprise) and these will carry an expected 20-30 per cent premium to current sets.

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Staff at the Independent Directory, owned by Independent News & Media, were told this week that they will get just four weeks’ pay per year of service in their redundancy packages.

This includes their statutory two and a half weeks a year. Sales staff were told that their commissions might not count towards their severance.

All 52 staff were made redundant. last week. Not surprisingly, INM’s decision to announce the redundancies just before Christmas angered workers, who had just put the 2010 directory to bed.

They also question whether the directory will ever appear again. INM said it plans to switch to a two-year publishing cycle for the directory in light of the recession.