At the controls as Aer Lingus continues steep ascent
Newly-installed chief executive Sean Doyle is targeting further transatlantic expansion
“There’s no room for complacency in this business.” It’s not exactly a mantra, but it’s a phrase that Aer Lingus chief executive Sean Doyle repeats often enough to make clear that he does not believe in taking things for granted.
Doyle took over at Aer Lingus at the start of the year, inheriting a business that had just earned record operating profits of €305 million in 2018 and had grown its transatlantic operations, the chief focus for expansion, by 17.5 per cent.
This year it will launch a new service from Dublin to Minneapolis in the midwestern United States, while only a hold-up in the delivery of new aircraft has forced it to postpone plans for a new route between the capital and Montreal until next year.
Notwithstanding delays in the arrival of the Airbus A321 long-range aircraft it has ordered from the European aircraft manufacturer, Doyle indicates that further expansion across the Atlantic is on the cards. Aer Lingus plans to continue with its strategy of developing its base at Dublin Airport as a hub, using the gateway to transfer passengers between Europe and North America, cashing in on its geographic position and the fact that it is one of the few European Union airports with US customs and immigration pre-clearance.
“If you look at what we communicated in November, we want to go from 17 long-haul aircraft to 30 over the next five years. That would be the most significant expansion that Aer Lingus would have ever seen.
“I think we have momentum in a number of directions that we’re looking to capitalise on. We’ll be looking at new destinations next summer but also looking at ways in which we can strengthen the places that we already fly to. So places where we may be not flying daily, we have to look at getting them up to a daily service because that’s important when you’re building out hub activity to offer a consistent daily schedule that people can use to plan their itineraries.”
The A321 is going to play a big part in this. Aer Lingus has ordered up to 12, with four due to arrive this year. Putting it simply, the economics of the new aircraft will allow the airline to serve destinations in the US, particularly on the east coast, more cheaply.
Doyle says that the carrier, its parent, International Consolidated Airlines Group (IAG), and Airbus are “excited” about the fact that the Irish carrier will pioneer its use across the Atlantic.
This, he says, will focus the manufacturer’s efforts on getting past the delays in delivery, a problem that is hitting the industry as a whole, not just Aer Lingus. “Currently, we expect that all four A321LR Neos planned for 2019 will be delivered in 2019, and similarly we expect to receive all four A321LR Neos planned for 2020 to be delivered in 2020.
“There are a lot of people interested in the aircraft, which tells you all you need to know, but strategically it’s exactly the right play for Aer Lingus. It plays to the Dublin hub in a way that does not afford the same advantages out of other European gateways.”
The A321 is a narrow-body aircraft. These are more usually associated with shorter routes, although new technology is changing this. Within Aer Lingus, Doyle points out, there is already a precedent for using such aircraft on the North Atlantic, as the airline flies Boeing 757s on such routes.
“Aer Lingus was also one of the first airlines to operate the A330 across the north Atlantic and that was a plane that was originally designed for domestic operations,” he points out, adding that the aircraft has since become ubiquitous on routes between Europe and the US.
While new aircraft technology is opening opportunities for airlines, it has not been without its troubles. Following crashes in Ethiopia and Malaysia, US manufacturer Boeing has suspended deliveries of its 737 Max aircraft while it seeks a solution for a software problem that may have been responsible for the tragedies.
Doyle points out that Aer Lingus does not use the B737 Max.
“I think everybody in the industry obviously takes the tragedies that happened with Lion Air and Ethiopian very, very seriously,” he says. “And I think the industry has a track record – be it the manufacturers, the regulators and the operators – of really learning from what went on and making sure that we implement best practice to ensure it does not re-occur.”
There are commercial challenges too. Following a period of almost unprecedented growth, airlines, particularly in Europe, are running into difficulty as costs rise on the back of oil prices and interest rates, and as competition intensifies. Norwegian Air Shuttle, which itself has ambitious plans to offer cheap transatlantic flights, including from Ireland, has sought more cash from shareholders. Iceland’s Wow Air left passengers stranded this week as it finally collapsed after the failure of rescue talks. Most observers predict that aviation faces a period of closures and consolidation.
A British Airways veteran, Doyle knows that aviation is particularly prey to cycles. “What you’re seeing this year in the industry is probably a clear differentiation between airlines that are doing well and those that who aren’t doing so well. But I think we’re financially in a very strong position to weather whatever may come our way.
“We need to keep finding ways of being smarter, more efficient and continuing to offer value for money because that is probably one of the bigger single drivers of people choosing Aer Lingus ahead of the competition.”
Aer Lingus calls itself a “value carrier”, which Doyle explains means that it is not full service in the traditional sense, but neither is it low-cost. Instead, its chief executive says, it focuses on what passengers value. It is something that he argues the airline does better than any other.
Competition does not only come from other airlines. As Dublin Airport seeks to develop itself as a transatlantic hub, it will be competing with other gateways across Europe. Its owner, State-owned DAA, is already building a new runway and plans to add extra piers and stands for aircraft by 2023, something the airlines say it needs to do urgently. Doyle says that when he talks to the airline’s pilots, this is the issue they raise most with him.
“You know, Dublin is number five now [among European airports] for transatlantic destinations served,” he says, noting that it has come a long ways since 2012. “We grew our north Atlantic services by 17 per cent last year, so it’s important that we get behind the capital development plan, build out the right infrastructure, build on the momentum and advantages that we have.
“I think stands and piers and taxiways are a fundamental physical constraint that you can’t overcome and they are very important to getting the best use out of the additional runway capacity. That’s why we fully support the capital development plan as being the right thing to focus on over the next four to five years.”
“It’s an ambitious plan,” he says of the DAA’s proposals. “It’s a complicated programme, so there’s no room for complacency. I think we need to get through the planning application and get some sensible outcomes in things like noise regulation. There’s no point in having a hub if you can’t land aircraft in the peak period when people want to come to Dublin and when they want to connect.”
The Government has already named Fingal County Council as the airport’s noise regulator, a step towards addressing local concerns that led to the night flight conditions attached to permission for the new runway – limiting the number of flights in and out of the airport to 60 between 11pm and 7am, a window that takes in some of Dublin’s busiest periods.
Dublin already exceeds these limits, but they do not apply until the new runway is finished and in use.
Doyle argues that it is difficult for Aer Lingus to plan its future until there is certainty about all of this. It is, he says, one of the “big tensions” in managing the business.
Failure to find a resolution means Dublin will end up with a runway it cannot use fully, something that will run counter to the national interest that required the new runway in the first place, he warns.
It was, he remembers, a thriving place until the mid-1980s, when a domestic recession and a shift in manufacturing to the Far East conspired to close one of its biggest employers, Youghal Carpets. Parents of about half his classmates were among the 800 people who lost their jobs as a result.
“That was a big shock to the town,” he recalls. “Youghal had a great hurling team in the early Eighties and within a couple of years half of that team were either in America or the UK seeking a living.”
It was this experience that taught him to take nothing for granted. “ I think that was very much one of the things that would have driven me forward in my career was seeing what Ireland and Youghal were going through in the 1980s.”
He graduated from University College Cork with a B Comm and trained as a management accountant with CB Forms, a start-up in Cork city run by a friend of his. In 1998, driven by the desire to see a bit of the world and work for a larger organisation, he successfully applied for a job as a financial analyst with British Airways.
Doyle went for two years but stayed for 20. He arrived at a time when the airline was growing but also dealing with newly-emerged competition from low-cost carriers Ryanair and EasyJet. He was still learning the ropes when terrorists attacked the World Trade Center in New York in September 2001, bringing the industry to a near standstill.
Like many others, British Airways had to cut its workforce and unprofitable routes to survive, but it emerged with a leaner base from which to grow.
“That was quite a learning curve, to be part of the airline business at that time,” he says.
Stints in Singapore and Sydney followed between 2001 and 2006. This period gave him a ringside view of Asia’s growth. He returned to London in 2006 to head the cargo operation in British Airways, more or less on time for the global financial crisis and subsequent recession, which prompted further restructuring at the airline.
In 2009, British Airways asked him to negotiate its joint venture with American Airlines. From there he became head of strategy and business planning before going on to head the carrier’s commercial business in North and South America. He then took on alliances and fleet, taking on additional responsibility for the company’s separate business units in Gatwick and London City Airports.
At the end of last summer, IAG asked him to take the Aer Lingus role, succeeding Stephen Kavanagh. Doyle says the offer “flattered and surprised” him.
“But the more I thought about it and the more I thought about the opportunities that Aer Lings would present, and what I could bring to it, the more excited I got. We’ve got a brand that reaches into the hearts and minds of guests not just in Ireland but in North America. We’ve got a hub in a great location. And we have the ambition to keep on growing and building on our success.”
Name: Sean Doyle
Post: Chief executive, Aer Lingus
Why is he in the news? He took over at Aer Lingus at the beginning of the year, following 12 months where it grew its transatlantic business by 17.5 per cent and posted record €305 million in operating profit. The airline plans further growth in 2019.
Family: Married to Sophie, with a six-year-old son, Oliver.
Interests: Sport of all kinds, but particularly the GAA and the Cork hurlers.
Something you might expect: He has a B Comm and trained as a management accountant.
Something that might surprise: He swims for charity from the beach in his native Youghal, Co Cork, every Christmas Day.