Aer Lingus deep in the red in first half of 2009

earthtimes.org/articles/show … -half.html

rte.ie/news/2009/0827/aerlingus.html

(later in the same article…)

bloomberg.com/apps/news?pid= … xtqaZ8Vdxw

(later in the same article…)

so far AL shares have risen from 50c to 54c and then dropped back to 53c…
uk.finance.yahoo.com/echarts?s=A … =undefined

so, maybe this is good news/was expected?

jesus, that’s a rate of cash burn that a 1999 dotcom would be proud of!

at least it might shut the unions up for a while

“We must now take difficult but necessary steps to address our business model and cost base,” Chairman Colm Barrington said in the statement.

nothing wrong with the business model; they are copying Ryanair as much as possible…so that just leaves the cost base and the reduction in cost base requires buy in from the unions.

Non Irish institutional investment in AL is minimal at this stage, i.e. nobody cares.

I.E. The shares are illiquid.

The Government has 25%, Ryanair has a shade under 30%, the staff and pilots have a large tranche, these are not traded shares.

breakingnews.ie/business/aer-lingus-cost-cutting-could-include-moving-bases-abroad-424101.html#ixzz0PNoZP9RD

I think this is very important.

It effectively says that a controlled return to competativeness in Irish buisness is no longer possible, and that full bancrupcy of the state is require to force all its inhabitents to accept a lower standard of living.

If that does not happen, we’ll turn into Cuba.

It also signals the deathnell for largescale union influence in Irish industry. The country is so fucked, that any significant unionisation is no longer possible.

So, broken economy and broken unions it is…

There is no way to sugar coat it … Aer Lingus is in deep doo-doo and has been for a long time.

Legacy issues surrounding work practices at ever single level in the organisation (including management and the incompetent interference of the previous owner, i.e. The State (remember Bertie Ahern’s tirade against Willie Walsh’s privatisation offer!)) have lumbered the business with outdated and inflexible modes of doing business and far too much influence by the unions.

If the airline is to survive, new bases outside Ireland are needed as are new work practices. This is a tiny island, with a tiny population and possibly the most damaged economy in the Eurozone (OK, it’s a s toss up between us and the Spanish), in tough times there isn’t enough repeat traffic off and on to the island to sustain the operation commercially. They need to open new markets with a competitive product. The planned venture with United flying Madrid to Washington is a start, but there is much work to be done by the CEO when he starts.

As it stands, Aer Lingus could very easily go the way of Sabena, Swissair and the dozens of other airlines that have gone under in the last few years. With the right leadership it can survive, but a big issue is the shareholders … they may be unwilling or unable to pump in more cash. Of the two largest, one is potentially hostile and the other at best inept.

Blue Horseshoe

How the hell did they manage to burn €400million? Did they buy shiny some new toy planes or something? At this rate AL will not be around for long. I always thought there was a lot of the bluffer about Mannion - this proves it. It looks as if Mannion has run AL into the ground before departing the scene of the crime. I always questioned the Belfast move where they were running into a range of existing competition on most their routes. They were trumpeting there loads on some routes but of course what they were not saying was the the percentage of them that were sold for £1 or £10 etc. Yields were crap. Similarly now at Gatwick Easyjet is going toe to toe with them on most routes.

Some of you guys are talking tripe. Aer Lingus are in a cyclical downturn that’s no different to what airlines the world over are going through. Lots of airlines will go to the wall, but I am sure that Aer Lingus will be one of those that will survive.

Full report here - ise.ie/app/announcementDetai … D=10167366

telegraph.co.uk/finance/news … nturn.html

nytimes.com/2009/08/28/busin … 28air.html

Looks like it closed up 2c at 52c per share for the day.

And another former state company sets itself to be swallowed up at a steep loss to anyone who invested in the privatisation…

IIRC,

Aer Lingus was sold only to institutional investors and the IPO price valued the company at around €1.4 bn. Given that it had around € 1bn in cash on it’s balance sheet at the time and that “times were good” with resultant talk of expansion, it seemed to many that the government had significantly undervalued the company in order to “get it away”.

As for the former State telecoms concern, that has turned out to be a whole other mangy dog with a special kind of fleas, tics, mites and god know what other parasites.

Aer Lingus still has a fighting chance, but it (and by ‘it’ I mean every level of the organisation and its owners) has to grab that chance and make some very difficult decisions and act on them. If not, the Aer Lingus will join other ex Irish airlines (TransAer/Trans Lift, EU Jet, Jet Magic, Eirjet and EuroCeltic to name but a few) consigned to annals of aviation history.

Blue Horseshoe

irishtimes.com/newspaper/fro … 08946.html

(later in the article…)

They were sitting pretty on a massive cash pile, more than enough to see them though a severe recession if they played their cards right.
They have burned though 400 million of it in one year with no sign of needed cost cutting measures. This airline is doomed unless drastic action is taken.

news.carrentals.co.uk/aer-lingus … 28431.html

(later in the article…)

Aer Lingus have copied Ryanair’s model. However, Ryanair - no unions, Aer Lingus -Unions. That’s the simple reason why they’re fucked.

Unions or not they’d no choice - the old beloved socialist model of charge as much as you can and only carry the price insensitive collapsed with deregulation.

They’d a union guy on Morning Ireland talking up their chances this morning, mentioned they’d up to a 900 million cash pile.

Sadly, what he neglected to mention is they also have current liabilities of 700m. Perhaps Aer Lingus Director Begg could explain this to his comrade.

(Also he gave out about the government departure tax, but SIPTU last week were recommending an increase in airport charges so the DAA staff get protected, but lack of hypocrisy is never something you could accuse an Irish trade union rep of having.)

100m losses versus those numbers seems to give them only two years, perhaps less as the suppliers will be getting jittery.

And they are burning through cash at a higher rate than even poorly performing peers - ftalphaville.ft.com/blog/2009/08 … h-carrier/ - I’ve no time for Aer Lingus after the stunt they pulled boosting guidance during the bid from Ryanair.