Aer Lingus targeting additional deals

Aer Lingus, fighting a takeover bid from Ryanair, said it is targeting more deals like a contract-flying accord struck with Virgin Atlantic Airways Ltd as the sluggish Irish economy restricts expansion.

Other options for boosting revenue include seeking to purchase further slots at Heathrow Airport, where the Virgin flights are based, to help maximise aircraft utilisation, chief executive Christoph Müller said in an interview.

“We are limited in our organic growth due to the fact that Ireland is so small and not yet firing on all cylinders,” he said in London, adding that while Ireland is recovering in terms of exports, “there is still a long way to go with regard to cost of living.”

Aer Lingus will operate four fully crewed Airbus SAS A320 single-aisle planes for Virgin from next month, providing feeder traffic from Manchester and Scotland to its client’s Heathrow base via 24 daily flights. Aer Lingus expects to carry one million passengers a year under the deal, which came about after Virgin was forced to commence its own short-haul services when former partner BMI was taken over by competitor British Airways.

A surplus Airbus A330-200 wide-body will also operate from Scandinavia to the Caribbean on behalf of a major tour operator for the next three winters, Mueller said yesterday, with the plane to be used on transatlantic flights during the summer. That’s after a lease deal with United Continental for flights between Madrid and Washington expired in October.

At capacity-restricted Heathrow, the 23 pairs of takeoff and landing positions that Aer Lingus uses for its Irish flights mean it could make better use than other carriers of single slots that might become available, bundling them with existing holdings. The scarcity of slots at Heathrow compels some carriers to have jets standing idle for three hours rather than the optimum 25 minutes, Mr Müller said.

“If you are based at Heathrow and you can just use another aircraft for the return trip and keep the whole thing spinning, that’s much better,” he said. “We’re looking in that direction.”

Demand for contract flying, known as wet-leasing when crews are also provided, is likely to increase as airlines look at ways to pare expenses while maintaining a presence in key markets, he said.

— Bloomberg