IAG plans to put Aer Lingus to compete in the UK for traffic to the US | Companies

The baton of the CEO of IAG, Luis Gallego, is already perceived as the head of the airline holding company, where he is making decisions that are reminiscent of his time in Iberia. Between the first stall movements, you will put Aer Lingus, when the crisis begins to be overcome, to compete with their own British Airways in the United Kingdom.

The Irish woman will have an offer, which would be understood as a natural from her group sister, where she can make the operation more competitive. But without disturbing the powerful unions that represent the more than 40,000 workers of the British airline.

IAG finalizes the obtaining of permits for Aer Lingus fly direct between the British Isles and the United States. The placet to commercialize the offer is expected imminently, while the flight licenses would still take several weeks. The first operations could be activated next summer if the health situation allows it. Both the United States Department of Transportation and the British Civil Aviation Authority have a voice and vote in this project.

Manchester has the third largest airport in the United Kingdom by passenger traffic, after Heathrow and Gatwick

“As part of an ongoing process to see if there are opportunities for Aer Lingus to operate North Atlantic routes from UK regional airports, a request was submitted to the US Department of Transport. No final decision has been made regarding with the launch of these services, subject to the granting of different permits ”, acknowledges the airline.

Aer Lingus does not break into Heathrow, where it would generate suspicion from the British Airways staff and the slots are numbered, but instead seeks to fly from Manchester to New York, Boston and Orlando.

Observers of the air market explain that IAG tries to occupy the space left by Thomas Cook with a more cost-competitive product than what British Airways can offer. The rival to beat in the third largest airport in the United Kingdom by volume of traffic is Virgin Atlantic.

Without noise

The commitment to the Irish is one of the first steps of Luis Gallego as CEO of IAG

The project to implement IAG’s Irish benchmark in the UK for travel to long-distance destinations is not new. The novelty is that Gallego is going to take it forward, with all the precautions required by Brexit and the pandemic itself, without the slightest outbreak of protest in the holding’s star airline.

The initiative has the backing of the British pilots unions (Balpa) and also the Irish (Ialpa).

The recent replacement of the CEO of British Airways, Alex Cruz, after the political and labor battle triggered by the announcement and negotiation of severe cuts, and the subsequent reduction of the aforementioned adjustment, may explain the atmosphere of tense calm at British Airways.

For Aer Lingus, for its part, flying from the United Kingdom can be a spur as IAG begins to use its fleet and equipment as a piece to compete outside of Ireland to maintain leadership in the North Atlantic corridor.

Aer Lingus, through the newly created British subsidiary Aer Lingus UK, plans that the route to New York is daily and throughout the year, as has been reported in the Irish press. Those that will link with Boston and Orlando would be operated during the summer season.

Apparently, the company reserved the space to operate from Manchester airport at the end of 2020 and would make the jump with two A330 aircraft and another pair of A321 LRs, the latter expected to arrive in the fleet next summer.

As a preliminary step, and no less, the airline of the clover has just obtained permission from the United States Department of Transportation to join the transatlantic joint venture alliance of which they are part British Airways, Iberia, American Airlines y Finnair.

Among the movements of IAG with Luis Gallego already in charge are the capital increase of the holding for 2,741 million euros to deal with the current crisis; the change of the chief executive at British Airways, and the restructuring of the national control structures of the group’s community airlines to maintain flight certificates after Brexit.

When the moment when traffic will pick up again cannot yet be assured with certainty, the executive moves tab in the United Kingdom to take part in the recovery.

Doubts about the rule of airline ownership

The CEO of Wizz Air, Jozsef Varadi, came out yesterday in the wake of an HSBC report in which it is questioned that the suppression of political rights to British shareholders is enough for airlines to comply with EU regulations on ownership and control after Brexit. “Personally, I think this is a sustainable proposal,” Varadi told Reuters.

80% of Wizz participants have non-EU nationalities. Other companies exposed are Ryanair or IAG, both with a large UK stakeholder base. The report pointed out the need for a regulatory change to validate the strategy of leaving these investors without voting rights. Otherwise, HSBC argues, they would be forced to take over the shares or restructure the capital.

The EU obliges its airlines to have at least 50.1% of the capital in the hands of investors from the community bloc, including those from countries aligned with the European Economic Area.

The post-Brexit aviation agreement between the EU and the UK has not relaxed the rule, but recognizes “the potential benefits of continued liberalization of ownership and control” and commits to revising the rule this year.

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