ATW Daily News

Aer Lingus to open Gatwick base as Ryanair continues pursuit

Monday December 22, 2008

Aer Lingus will establish its first base in Great Britain in April at London Gatwick, with four A320s operating to Dublin, Knock, Malaga, Munich, Zurich, Nice, Faro and Vienna.

EI's only other base outside the Republic of Ireland is at Belfast International, which it opened one year ago (ATWOnline, Dec. 11). "The Gatwick operation will complement our existing services out of London Heathrow and position Aer Lingus for growth as we roll out new routes and bases in future years," CEO Dermot Mannion said.

He added that the carrier is "offering consumers flights to top European business and leisure destinations at convenient times and competitive fares as part of a superior offering that sets us apart from our rivals."

EI, which is trying to fend off a second takeover attempt from investor and archrival Ryanair (ATWOnline, Dec. 16), expects to expand to eight aircraft at LGW within a year with the potential for up to 2.5 million passengers annually. Investment will amount to £100 million ($154 million) in the first year. It said 120 new jobs will be created through local recruitment of pilots and cabin crew. Ryanair operates bases at London Stansted and Luton.

Meanwhile, Ryanair said it was "concerned" by comments from Aer Lingus regarding its trading performance and prospects following the launch of its recent takeover offer. Ryanair claimed that EI was much more upbeat than in its interim management statement in November (ATWOnline, Nov. 12).

"We, as a large shareholder, are concerned about some of these apparently contradictory claims and forecasts, and their impact upon Aer Lingus' forecast post exceptional net profit (loss) after tax for 2008 and 2009," Ryanair CEO Michael O'Leary said in a shareholder letter to Aer Lingus Chairman Colm Barrington.

In the letter, Ryanair asked EI to clarify the exact cost reduction of its recently announced "transformational deal," to specify the cap EI placed on the cost to defend itself against the Ryanair offer (ATWOnline, Dec. 15), and to confirm the current deficit in its defined benefit pension schemes. Ryanair also asked to know the revenue impact of EI's decision to eliminate long-haul fuel surcharges and the group's forecast post exceptional net profit (loss) after tax for both 2008 and 2009.

by Cathy Buyck

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