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Aer Arann In Trouble?


Giggleberrys
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They rely heavily on subsidy from the Irish Government. And if they're skint...

 

Not strictly true. They operate some 'Public Service Obligation' Irish domestic routes under contract to the Irish Government for which they receive a degree of revenue support, but this is a small part of their business. Manx2 do the same for the Welsh Assembly. Their main activity now is as an Aer Lingus franchisee, operating secondary routes between the UK and Ireland.

 

The process they have entered seems to be something similar to US 'Chapter 11' bankruptcy protection, which some US airlines have used to walk away from debt or restructure leases, business and labour agreements to their advantage, but it's obviously not a clever situation.

 

The IOM-LCY route has suffered lately because the shiny new planes they were using have been taken off to the Aer Lingus set up and the rather old replacements are much less appealing and reliable.

 

Difficult to know how this situation will pan out............

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If LCY is suspended its makes IOM look like a joke financial sector again, come back VLM and Eastern!

 

Not really - with good internet everywhere there's little reason to travel for business meetings. 99% of my calls are via SKYPE with customers, partners etc.

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well in my experience nothing beats being there and the further up the chain of command in any large business the less technology friendly managers become and the more they prefer face to face.

 

LCY is without doubt vital to the island, if RE go then Eastern or possibly flybe need to fill there shoes, however there is an agreement that flybe stay out of LCY from the BA Connect days.

 

Manx2 need to find a 50 seater with crew able to land and take off there and they could be off and running!

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If LCY is suspended its makes IOM look like a joke financial sector again, come back VLM and Eastern!

 

Why?

 

Jersey only have a single weekday service to LCY, which only exists as Jersey is somewhere for VLM to park a plane cheaply, and Guernsey have never had a service to LCY. They seem to get by OK. Neither VLM and Eastern were interested after Euromanx went bust, so little reason to think they'd be more interested this time.

 

All the media reports say it will be 'business as usual' for Aer Arann for the time being.

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Not looking great for one of Ronaldsway's biggest customers:

 

My link

 

"It said that it and the examiner would also use the time to negotiate with potential investors and that "a number of parties" had expressed their interest in the airline."

 

So essentially it's up for sale, routes which don't make a profit will be slashed.

 

Reading between the lines they're having a hard time finding funds.

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Judging from reports on RTE radio today Aer Arann are finished - losses of €18 million racked up in just two years. Some other operator will wait for them to fold then pick off the profitable routes. See here http://www.rte.ie/business/2010/0827/aerarann.html and here http://www.rte.ie/news/2010/0826/aerarann.html

 

As with the ridiculous Steam Packet Company if the IoM want to have proper transport links the Government are going to have to bite the bullet and opt for state operated carriers. The Isle of Man and, latterly, Ireland are prime examples of what happens when everything is sacrificed on the great altar of privatisation.

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