Aer Lingus is carrying out a review of its business and will not wait until it finds a successor to chief executive Dermot Mannion to take action to reverse last year's losses and improve on its poor outlook for 2009.
Mannion stepped down as chief executive with immediate effect in early April after four years in the role. Chairman Colm Barrington is taking responsibility for the airline in the interim and London recruitment firm Zygos Partnership has been engaged to help find a new chief executive. Barrington hopes Mannion's successor will be recruited as soon as possible and in place within six months "at the absolute outside". But he adds the required changes at the carrier cannot await the arrival of a new chief executive.
"We've got to do things in the interim. Aer Lingus has to be made as efficient as its competitors," Barrington says. "If you can't get your cost and your efficiency and your whole way of doing business to that level, you're going to have your lunch eaten. It's just a fact of life. You can't defy gravity."
Citing a fall-off in leisure travel from Ireland to the USA, partly caused by the strengthening of the dollar, Barrington says the carrier is taking "a very critical look at all its US operations".
He admits: "The likelihood is that we will not be operating as many routes or as many frequencies as we currently operate."
Changes to working practices at the airline are also in prospect. "Aer Lingus was, for 70 years, a state-owned company, and practices built up during that period," he says. "Some of them have changed but not all of them."
"If Aer Lingus is to survive as an independent airline...we have to make the airline efficient in the modern marketplace. The extra concern for Aer Lingus is that if it doesn't make itself successful, and therefore retain its independence, it will get acquired."
While Irish budget rival Ryanair has indicted it is unlikelyto make a third attempt at acquiring Aer Lingus, Barrington is sceptical. "Ryanair has made two bids already, I presume they'll make another one," he says.
"If [we] can't make the company successful and produce shareholder value and keep the share price up, then they're vulnerable. At 70p per share we're vulnerable, so we've all go to realise that and do something about it," he says.
Source: Airline Business
