The board of Aer Lingus has a task which is both enviable and troublesome. It must identify (and secure the agreement of) another airline with which it might enter a "strategic alliance". The task is enviable because a successful alliance could develop Aer Lingus into areas and on a scale that it could only dream about were it to remain on its own. The task is also troublesome because alliances are not guaranteed to succeed and that which the board might prefer could run into significant obstacles.
There can be no doubt however that the future of Aer Lingus will be best secured by forging an alliance with one or more airlines. The company has crawled back from the brink of insolvency five years ago to a situation where it has no debts and is earning profits of nearly £1 million a week. But this is the top of the cycle and while argument abounds on how long the boom conditions will last, there is no dispute that a downturn will come. Aviation is a particularly cyclical industry. When the next downturn comes, Aer Lingus would not want to be a relatively small player, without alliances, operating only peripheral services.
While Aer Lingus spent the last five years restoring its finances, other airlines throughout the world have been forging alliances. There are now four sizeable alliances and Aer Lingus must choose from them. They differ considerably in their working relationships but they are similar in one vital respect; each contains one large airline from Europe and one from the United States. It will be the job of the Aer Lingus board to identify which alliance offers the best prospects for long-term growth of Aer Lingus - and then to hammer out favourable terms.
A difficulty may arise on the issue of the Shannon stopover. When Aer Lingus had its back to the wall, the stopover was watered down. The rule now is 50/50; every trans-Atlantic crossing which lands in Dublin must be matched by a landing in Shannon. That change, forced through to his credit by Albert Reynolds, was bitterly opposed by local politicians, including Ms Sile de Valera and Mr Tony Killeen who both felt it necessary to resign the Fianna Fail whip. But in the current competitive climate, no potential American partner for Aer Lingus would welcome mandatory flights to airports unless customer demand justified them. In addition, any American airline seeking its government's permission to forge an alliance with Aer Lingus may have to prove that Ireland allows free and fair competition; that it allows airlines to serve whichever airports they wish, without restriction.
Shannon more then survived the watering-down of the stopover. Its traffic increased by nearly 50 per cent in the intervening years and the prospects are encouraging. But it will be argued, perhaps correctly, that it might have prospered even more had the stopover remained undiluted. But stopover requirements cannot be squared with airlines' needs to maximise their potential and customers' requirements for availability and cost-effectivness. The Government must ensure that Aer Lingus forges an alliance of its choice which will maximise its potential. It is also up to the Government, aided by Aer Lingus, to commit resources to Shannon that will underpin its role and encourage its expansion.