Aer Lingus cuts highlight urgent need for a restart plan for Irish aviation

The Bottom Line: Airlines in peril after 14 months of Covid losses and no restart plan

 

Aer Lingus’s decision to permanently close its crew base in Shannon Airport, resulting in up to 81 redundancies, and to temporarily lay off ground staff there and employees in Cork Airport between September and November is a stark reminder of the state of the aviation industry right now and the lack of a restart plan from the Government.

This decision has come in spite of an acceleration in the pace of our vaccine programme, and major steps towards reopening the economies in both Britain and the United States, our two most important markets for visitors – which should be giving us hope that air travel can resume in a meaningful way in the very near future. Instead, the Government remains silent for now.

As one senior aviation executive quipped to me, “There’s a restart plan for the dog parlour industry but not for aviation, which is crucial for tourism.”

There remains an eery quiet at Dublin Airport, the big beast of Irish aviation, with about 4,500 passengers a day compared with about 100,000 daily in pre-pandemic times.

Taoiseach Micheál Martin described the Shannon closure as “very sad” news. He said that next week the Government would “decide on the broader issue of travel and participation in the digital green certificate”, which is being established by the European Commission from June 1st to try and facilitate a safe resumption of flying.

This “is central to the plan for reopening later in the summer in respect of the aviation industry”, Martin said.

There is a growing alarm within the air travel industry at what is perceived as a lack of energy, focus and engagement from within Government on the resumption of air travel and tourism.

‘Closed to visitors’

And this after months of harsh restrictions on non-essential travel, and a loathed hotel quarantine regime. On Monday, Ryanair chief executive Michael O’Leary described the restrictions as “insanely stupid and ineffective”, adding that “all it does is present an image that Ireland is closed to visitors”.

He has a point and it’s not a great look for an island economy that has traded in the past on its céad míle fáilte.

Ryanair has moved aircraft from Dublin to bases in Spain, the UK and elsewhere and would not be moving them back this year, O’Leary said.

The Aer Lingus decision is clearly a blow to the west of Ireland and no doubt questions will be asked as to why conditions weren’t attached to the €150 million loan given to Aer Lingus by the State around the turn of the year.

Of course, there could be other factors at play. Aer Lingus has been grumbling about its cost base in Shannon for many years and the pandemic provides good cover to tackle the unions on this issue.

Brian Bowden, Aer Lingus chief people officer, told Tánaiste Leo Varadkar in a notice of the likely job losses that Shannon had been inefficient and out of line with the market for a significant period of time.

And yet, in February 2020, Aer Lingus announced the introduction of a new Shannon-based aircraft and brought forward by one month the return of its seasonal service to JFK in New York.

In addition, new services to Barcelona and Paris-Charles de Gaulle were announced for Shannon, which would have resulted in Aer Lingus’s capacity there growing by 20 per cent.

“We are delighted to demonstrate our continued commitment to Shannon Airport and the wider region,” Aer Lingus’s then chief corporate affairs officer Donal Moriarty said at the time.

Flight crewing

Then the pandemic hit. And 15 months later, Aer Lingus is not currently flying from Shannon and hasn’t since March of last year. It lost more than €1.1 million a day in the first quarter of this year. The airline is being cagey about how flights will be crewed whenever it decides to resume flights from the Co Clare airport.

Before Covid, it was operating transatlantic services from Shannon (for most but not all of the year) and a regular service to Heathrow in London, a prime asset for the region that was lost in 2007 but restarted in 2009.

Will it resume these flights? What might happen to the prized Heathrow slots?

Aer Lingus also has a new chief executive, with Lynne Embleton, formerly of IAG cargo, taking on the role last year, although she has yet to move to Ireland. And it recently launched transatlantic services out of Manchester, a clear signal that its focus is not just on the island of Ireland.

On Wednesday, Willie Walsh will address the Oireachtas committee on transport. Walsh is a former chief executive of Aer Lingus and acquired the Irish airline as boss of International Airlines Group. He is now director general of the International Air Transport Association, a major industry representative body.

Walsh will tell the committee that Covid-linked travel restrictions mean the State is “at risk of falling behind its key economic partners” and that the State “continues to impose some of the strictest Covid-19 measures in Europe”.

“As several international and EU markets begin opening up, Ireland is at risk of falling behind its key economic partners,” he will say, arguing for a “clear pathway” to reopening the aviation sector.

Non-essential retail opened here on Monday and the hospitality sector is preparing to take its first steps towards reopening in early June. The time has surely arrived for the Government to lay out its plans for restarting aviation. Two summers have already been lost and the €9 billion tourism sector is on its knees. The plans can’t come a minute too soon.

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