Risks pay off for O’Ceidigh at Aer Arann

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By Andrea Crisp in Dublin

Padraig O’Ceidigh has just stepped off the podium after speaking at the Distribution conference in Dublin and he’s swamped by people. They line up to shake his hand, interview him, wish him well, talk business, shoot the breeze and even hand over Irish whiskey. Everyone wants to rub shoulders with this passionate entrepreneur, managing director and 100% owner of Ireland’s regional carrier Aer Arann

padraig o'ceidligh w250He proves such a people magnet that to talk without disruption we finally have to tear ourselves away to the hotel café. Despite running behind schedule, O’Ceidigh makes me feel like an old friend as he explains how he and 60 other fund-raisers from Ireland are intending to ride the legendary Route 66 from Chicago to Santa Monica on Harley-Davidson motorbikes for local charity.

It is clear to see how his enthusiasm and commitment have driven Aer Arann to become one of the fastest-growing regional airlines in the world. In 1994 O’Ceidigh bought the loss-making Aer Arann, which was flying a daily service from mainland Ireland to the Aran Islands. Then it had an annual turnover of IR£250,000 ($355,000) and employed eight people. Last year Aer Arann flew over 1 million passengers across Ireland and the UK, and this year it expects to turn revenues of some E100 million.

The growth continues with O’Ceidigh planning to double passenger numbers in the next two years. Aer Arann currently owns 13 ATRs and has plans for another 10 ATRs or possibly Dash 8 Q400s as it targets continued growth. In terms of routes, O’Ceidigh says the carrier has exhausted the Irish market, and is looking to introduce 12 new routes to mainland Europe, France and the UK this summer, bringing the total to 36. “We’re an ordinary group of people with very few resources doing something extraordinary,” he says.

Risk-taking
“We’re a very entrepreneurial airline – in other words, we take risks,” O’Ceidigh says. This is illustrated by the airline’s move from being totally dependent on Aer Lingus for its ticketing – an arrangement that “drained money” after 9/11. “We decided on a radical change. It was a big risk but not as big a risk as staying where we were.” O’Ceidigh took the decision to move to direct sales online and via its call centre and the risk paid off. Aer Arann now sells 92% of its tickets directly compared with 15% four years ago.

aercrann w445

Asked whether seasonality might be a problem on the new summer-sun destinations (such as from Cork on the south coast of Ireland to Newquay, Cardiff, Jersey and Angers in France), O’Ceidigh believes it’s just a case of “try it and see”, especially as many of these routes have never been flown before. “We’ll gauge the routes’ success based on the summer season and see if it’s viable to continue.”

As ever, change is afoot at Aer Arann, with O’Ceidigh planning to step down as chief executive. Aer Arann’s board and management team are currently recruiting someone from inside the industry to “do a much better job than me”, a process which should be completed by July. This will free O’Ceidigh from the operational management of the airline, but he intends to remain actively involved in its strategic running as executive chairman. Asked if he’ll miss it, he’s succinct: “No. It will free me up to do other things.”

There may be a name change for the airline in the pipeline too, to reflect its international status. “Aer Arann is indigenous to Ireland – the west of Ireland in particular. We have to focus on this the more European we become.” O’Ceidigh would like to get passengers involved in finding a new name.

In the meantime, what keeps Aer Arann going, in what O’Ceidigh believes to be one of the most competitive countries in the world? “Competition. We love competition. I’m not saying we’re going to win, but we’re going to do our best.”

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