IATA AGM: Aer Lingus CEO says competition is key to success

During a media briefing on Irish aviation at IATA’s 72nd annual general meeting in Dublin, Aer Lingus CEO Stephen Kavanagh (pictured far left) declared that competition from the likes of Ryanair and Norwegian is what keeps his carrier relevant.
Instead of seeing Ireland’s geographical position as a disadvantage, which economist and moderator David McWilliams said it had perhaps been in the past, Kavanagh stated his belief that Ireland’s location is near-perfect in terms of serving transatlantic routes – beaten only by Iceland – and claimed their respective positions on the map may be why Aer Lingus and Reykjavik-based WOW air are the fastest-growing carriers in terms of transatlantic services.
Aside from geography, Kavanagh attributes Aer Lingus’s current success to three main points: managing cost base; maintaining low-entry prices; and providing a high standard of passenger experience. He sees these factors, driven by competition, as a reason why Ireland sells six airline tickets per head vs. three in the UK. “If Ryanair didn’t exist, we’d have to invent it,” Kavanagh remarked.
Regarding the argument concerning Norwegian Air International (NAI) going transatlantic, he remarked, “We were the first carrier to make use of the Open Skies with agreement with our Washington–Madrid service. I’m suspicious of the US’s motivations to block NAI but I’m confident as a business we’ll respond [to Norwegian’s entry into the US] and the market will be a better place as a result of competition.”
It became apparent that perhaps Kavanagh was so confident because of its new IAG membership last September when he admitted, “We’ve been struggling to keep up with level of opportunity.”
When questioned on whether an increase in Qatar’s stake in IAG might mean an eastward expansion for Aer Lingus, Kavanagh confirmed the airline was already in talks about “flying into a Qatar hub, potentially on Qatar metal,” but that it was a medium-term goal so nothing is set to be announced this year.
Commenting on Aer Lingus’s low-fare, long-haul operations, Kavanagh explained, “To be successful in creating a gateway in Dublin, we need to have efficient short-haul services – otherwise we have a gateway pointed in one direction, always. This creates the opportunity for us to flow passengers through Dublin as long-haul traffic.”
Opportunity was another keyword for Kavanagh during the briefing, particularly in terms of the outcome of the referendum on the UK’s membership of the European Union. He hinted that if London Heathrow became difficult for European passengers to pass through, Ireland would have the chance to route more customers through Dublin.

While Kavanagh iterated that Aer Lingus, as a member of IAG, hasn’t taken an official stance on the referendum, Ireland’s small home market means it’s in the country’s blood to constantly evaluate international opportunities as they arise.
Stephanie Taylor, assistant editor, Low-Fare & Regional Airlines / LARAnews.netDublin, Ireland

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