British Airways’ new low-cost strategy is…Aer Lingus?
09/04/2020|3:47:20 PM|Forbes

Move over Union Jack. The Shamrock is coming.

Aer Lingus could debut on the U.K.’s trans-Atlantic market, flying non-stop from a city like Manchester or Edinburgh to the U.S.

Passengers would not only bypass Aer Lingus’ Irish hubs, but also fortress Heathrow, where British Airways normally routes passengers between the U.K. and beyond.

As both Aer Lingus and British Airways are owned by IAG, the plan makes Aer Lingus something of a low-cost sister to British Airways. The shareholder is the same, so best to find the right combination of airline, aircraft and route. The unions probably won’t like it.

Cities outside of London don’t have enough premium demand for non-stop BA service, its calculation went. Enter the Shamrock. Aer Lingus has a lower cost base and is using a newer narrowbody, the A321neo. Its 184 seats, all but 16 in economy, are suited to the more leisure markets outside of London.

The opportunity arises since Aer Lingus doesn’t believe its focus city of Shannon, where the A321neo is based, can support service in the medium-term after Covid.

Aer Lingus put out tenders to “regional” U.K. airports to support A321neo flights, The Irish Times reported. Six U.K. airports responded, including Manchester and Edinburgh. Aer Lingus would start flights in 2021 for at least three years.

An Irish airline flying out of the U.K. to the U.S. is possible due to a sweeping open skies agreement. Air France initially started a London-Los Angeles flight but withdrew it; Air France needed its Paris hub.

The biggest foray in mixed-flag flying came more recently from Norwegian and its many units, now in critical care. Aer Lingus benefits from the greater selling power of British Airways and partners, and associated loyalty perks.

Emirates, Qatar Airways, Cathay Pacific and others fly long-haul from secondary U.K. cities, so why can’t BA? Its answer has been that it is too reliant on premium traffic, which is too depleted outside of London.

It will be a difficult sell for BA and IAG, but is rationale in the short-term. Beyond, the Covid crisis may forge new cooperation and opportunities within IAG.

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