What is the status of the integration of Aer Lingus into IAG?

Here’s our analysis of Aer Lingus’ plans for growth, to expand its fleet, and integrate its operations with British Airways, Iberia and Vueling now that it is owned by International Airlines Group.

London Air Travel » Aer Lingus » What is the status of the integration of Aer Lingus into IAG?

More than two years have passed since International Airlines Group (“IAG”) acquired Aer Lingus and it joined British Airways, Iberia and Vueling under the umbrella of IAG.

The merger is of particular interest because of both the proximity of Dublin to London and the fact that Dublin airport offers US Customs & Immigration pre-clearance which is not available in London.

Whilst much has been done to align Aer Lingus to their IAG siblings, there is still more to be done, with many announcements yet to be made.

Here’s a quick run through of what has and hasn’t happened, with some added speculation on our part.

What has changed now Aer Lingus is part of IAG?

Aer Lingus has, and will continue to, retain its own brand, flight operations and headquarters in Ireland.

However, many back office functions such as procurement are merged with IAG. Also, decisions around the purchase of new aircraft and Aer Lingus’ business plans are now reviewed by IAG.

In order to receive new aircraft and expand, Aer Lingus, like other IAG group airlines, must meet financial targets set by IAG. In its own words, IAG is “brand agnostic” so if financial targets are not met, IAG will allocate financial resources elsewhere.

Long-Haul Routes

There has been strong growth in Aer Lingus’ transatlantic network from Dublin and this is expected to continue.

Aer Lingus has added Los Angeles (from 1 May 2016), Newark (from 1 September 2016), Hartford (from 28 September 2016), Miami (from 1 September 2017), Philadelphia (from 26 March 2018), and Seattle (from 18 May 2018).

New long-haul routes are reported by IAG to be performing extremely well.

Short-Haul Routes

Aside from a summer seasonal route from Dublin Split in Croatia, there has been much less growth on short-haul routes.

This is no doubt because of IAG demands that short-haul operations must meet its financial targets. This is why there has been substantial change to BA’s short-haul flights with the addition of more seats and introduction of Buy-On-Board catering.

When IAG bid for Aer Lingus much was made of how its presence in UK regional airports would improve IAG’s coverage. However, if anything Aer Lingus has gone backwards. Aer Lingus and Aer Lingus Regional (operated by Stobart Air) have suspended routes between Dublin and East Midlands Airport and Liverpool.

Long-Haul Fleet

As at 31 December 2017, Aer Lingus had 4 Boeing 757, 4 Airbus A330-200, and 8 Airbus Airbus A330-300 aircraft in its fleet. It is due to take delivery of at least 1 Airbus A330 aircraft this year.

The most significant development is the arrival of the Airbus A321 Long Range aircraft from 2019, which made its maiden flight in January 2018. Aer Lingus will take delivery of 4 Airbus A321 Long Range aircraft in 2019, 2020 and 2021, taking the total to 12 aircraft. These will eventually replace the Boeing 757 by 2021.

This aircraft may result in the launch of a number of new services to secondary cities on the US East Coast. Norwegian, an airline which has been subject of a lot of attention from IAG, flies from Dublin and Shannon to New York Stewart and Providence and from Cork to Providence. IAG has made a number of competitive moves against Norwegian and Aer Lingus may well follow suit with the launch matching routes.

Aer Lingus is the only IAG airline to have the Airbus A321 Long Range aircraft on order and its performance may well influence whether BA and Iberia also order the aircraft.

Based on fleet plans published by IAG, there appear to be no plans to introduce the Airbus A350. Iberia is due to take delivery of the Airbus A350 this year and BA is due to take delivery of the aircraft in 2019.

Frequent Flyer Programme

Aer Lingus has launched a new frequent flyer programme “Aer Club” which uses the Avios currency adopted by other IAG airlines. This means that members of the BA Executive Club and Iberia Plus programmes are able to transfer Avios to/from the Aer Club if they have a membership. There were some well documented issues at launch.

Members of the BA Executive Club can also earn and redeem Avios when flying on Aer Lingus.

Partnerships

Aer Lingus is due to join the transatlanic joint-venture with American Airlines, BA, Finnair and Iberia. This will allow Aer Lingus to co-ordinate schedules and fares on transatlantic routes.

The latest update from IAG in late 2017 was that Aer Lingus was in the process of securing regulatory clearance. However, there have been no further updates since.

Aer Lingus has maintained its commercial relationships with non-Oneworld alliance airlines United Airlines, JetBlue, Etihad and Virgin Atlantic. It is likely that most of these relationships will continue.

Aer Lingus and Ryanair have stated that they are due to introduce an interline agreement, but no date has been confirmed.

Oneworld Alliance

When IAG bid for Aer Lingus, there were clear statements that Aer Lingus would rejoin the Oneworld alliance which it left in 2007. However, the latest indications are that there are no immediate plans for this.

It has to be said this is hugely frustrating. The reciprocal recognition of frequent flyer status is arguably one of the biggest benefit of membership.

Interaction with IAG Airlines

BA and Aer Lingus are now codesharing on these respective routes:

a) Aer Lingus and BA flights between London airports and Dublin, Belfast, Shannon, Cork and Knock.

b) Aer Lingus flights from Dublin to Donegal and Kerry County.

c) Aer Lingus flights from Dublin to UK regional airports including Aberdeen, Edinburgh, Glasgow, Manchester, Birmingham, Bristol, Leeds Bradford, Newcastle and the Isle of Man.

d) Aer Lingus flights from Dublin to cities in mainland Europe including Amsterdam, Barcelona, Brussels, Budapest, Dusseldorf, Lyon, Malaga, Milan, Munich, Paris, Prague, Rome, Venice, Warsaw and Zurich.

e) Aer Lingus transatlantic flights from Dublin, but these can only booked through BA when connecting from the UK.

f) All BA transatlantic flights from London.

g) Selected BA long-haul routes from London Heathrow to the Middle East including Abu Dhabi and Dubai. Previous codeshares to Cape Town, Johannesburg and Singapore seem to have been removed.

Aer Lingus does not appear to have started any codeshares with Iberia and Vueling between Dublin and their respective hubs in Madrid and Barcelona.

Separately, Aer Lingus is also operating select BA flights from London Heathrow Terminal 5 to Dublin and Hamburg under a wet-lease arrangement.

What hasn’t changed

a) BA and Aer Lingus continue to operate out of different terminals at both London Heathrow and Dublin.

Whilst it would make sense for the two airlines to co-locate at both airports, space constraints are likely to stop this, particularly at London Heathrow. Aer Lingus has also made a substantial investment in lounges at London Heathrow Terminal 2.

b) BA and Aer Lingus have not consolidated their schedule on overlapping routes, specifically London to Dublin and Belfast.

There is precedent from the London Heathrow – Madrid route following the merger between BA and Iberia whereby schedules were re-timed to maximise efficiency by eliminating “night stops” where aircraft and crews stay away from their home base overnight (thus reducing aircraft utilisation).  However, there are sensitivities around Aer Lingus’ portfolio of London Heathrow slots as it has to provide assurances that these would not be sold or transferred.

c) Neither BA nor Aer Lingus have scheduled any wide-body long-haul aircraft on the London-Dublin route. Both Iberia and BA do this on London-Madrid, primarily for the benefit of being able to carry more cargo.

One thought on “What is the status of the integration of Aer Lingus into IAG?”

We welcome any thoughts and comments below: