Aer Lingus confirms that it will present proposals to its state owners by the end of the year on a strategic alliance, but the Irish flag carrier stresses that no decisions have yet been made on whether that would include an equity stake.
As part of a broad transport review by the Irish Government at the end of 1996, the Aer Lingus management says that it has been given a free hand to discuss forming a "significant, robust relationship with a strong partner". The Government says that it is prepared to see that go as far as an equity stake.
To date, Aer Lingus has concentrated on signing a series of smaller deals, including a marketing tie-up with Delta Air Lines and codesharing with KLM and Sabena. The airline's management hints, however, that a more substantial partnership may need to be put in place alongside such smaller deals, to shore up the airline's long-term future, especially going into the next downturn.
"We cannot escape the fact that, in international terms, Aer Lingus is a small and potentially vulnerable player in a cyclical and increasingly concentrated global industry," says group chief executive Gary McGann in the 1996 accounts.
The comments come as the group's painful restructuring over the past three years continues to lift the financial results. Net profits more than doubled, to IR £32 million ($50 million), although a large part of the gain came through lower interest charges and unused restructuring provisions.
The troubled TEAM maintenance arm, which had come close to the point of closure in 1995, turned in losses of IRú5.5million, but is expected to improve on that this year as business continues to show signs of picking up. The target is to make profits by 1999.
Source: Flight International
