Aer Lingus has just celebrated its 75th anniversary, and after the difficult last couple of years, is in relatively good spirits as chief executive Christoph Mueller has helped guide the airline off the critical list and into profit.
Plenty of challenges though remain - keeping labour on side during the existing restructuring efforts; dealing with the high fuel cost and Ireland’s continued weak economy which mean further cost savings may yet be necessary; how to grow the airline outside of its relatively small home market and how to position the airline for relevence in the fiercely competiive market. And all this is set against a complex ownership background which sees low-cost rival Ryanair – which has two hostile takeover attempts under its belt – as its largest shareholder with a 29% stakeholder and its second largest shareholder, the Irish Government, as possibly ready to divest its 25% stake given its added stimulas of needing to raise case.
All of which made it a fascinating time to interview Mueller for the cover interview of our July issue of Airline Business. His approach has been a mix of stemming its losses and repositioning the carrier - after its move into the low-cost carrier terriotory - back up towards a hybrid model to provide an Irish alternative to Ryanair, helping to keep revenues stable despite cutting capacity.
“We are looking for ways where we can tackle our scale problem without giving up the independence of Aer Lingus,” Mueller told me in Dublin, just days before the carrier marked its 75th anniversary celebrations in Dublin last month. “Independence for us is not just independence to wave our own flag. I believe it is very important to our survival. But we need parterns to fulfil our mission to connect Ireland with the world. We are too small to do it on ourselves.”
The move back towards network carrier ground also sees the airline looking again at alliance membership – Aer Lingus was a one-time member of oneworld before quitting the alliance in 2007 as part of its low-fares, point-to-point repositioning. All three alliances – given its existing partnership with various oneworld, SkyTeam and Star Alliance members – are possibles, as is remaining independent – a decision seems likely by the year end.
“We are too small to become religious on alliances,” he says. “We really have to extract money from an alliance. We are currently evaluating whether the benefit of joining one of the alliances is larger than the costs associated with joining one of the alliances.”
Mueller is also one of the confirmed speaker’s at this year’s Airline Business-organised World Air Forum conference in Amsterdam this October.