Oireachtas Joint and Select Committees

Thursday, 29 January 2015

Joint Oireachtas Committee on Transport and Communications

Proposed Sale of Aer Lingus: Discussion

2:00 pm

Mr. Evan Cullen:

To answer Senator Mooney's question on consolidation, the number one priority of consolidation in any industry, particularly in the airline industry, is to eliminate over-capacity because over-capacity drives down prices. It is easier for airlines to make money if they consolidate. There have been mega-consolidations in the US and on all the routes where consolidation took place, the average price per kilometre flown, per seat mile produced, increased. That is a mathematical fact. Consolidation is designed to eliminate over-capacity.

I would take issue with the rhetoric about national carriers. I will set out a number of facts. Sabena only made a profit in one year of its entire existence and that was the year that Air France went on strike and all the French had to drive to Brussels. Sabena was a basket case from the day it was born to the day it died. Everybody accepts that. Swissair got damaged because it was a major shareholder in Sabena and got wiped out by Sabena. However, Swissair is an extremely successful airline. Alitalia still exists and is now controlled, but not owned, by Etihad. While Iberia has had its difficulties, it still exists within IAG, just like British Airways. With regard to the notion that national flag carriers are all a thing of the past, they all exist. I can assure members that if there is one thing the Norwegian Air Shuttle debate shows, it is that the Americans are very committed to their flag carriers.

Senator Barrett raised some excellent points, which may stray outside the debate, but he is correct that BA brings nothing to Aer Lingus. Aer Lingus gets everything it needs from BA by way of its code-share agreements with the oneworld alliance, but it equally gets its income from the SkyTeam and the Star Alliance.

I agree that there should have been more worker participation. Despite the fact, for example, that the pilots hold 7% of this company, we have no representation on the board and we have not even received the courtesy of a telephone call during all of this. The Senator is correct about BA's neglect of Scotland. Scotland has a similar sized diaspora to ours and its population is larger than ours but it only has a fraction of the transatlantic traffic. That is correct. I would ask Senator Barrett to voice our concerns that Dublin could be a substantially bigger hub but because people think it is a shopping mall with a runway appended to it, we do not have the proper infrastructure to put the proper aeroplanes onto the tarmac because nobody wants to invest in the taxi-way system or in the exits at the runway.

The manner in which the airport looks after itself as a shopping mall and not as an operational runway is an abomination.

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