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Aer Lingus Plots Middle East Expansion Following IAG Takeover

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Aer Lingus Plots Middle East Expansion Following IAG Takeover

Aer Lingus Plots Middle East Expansion Following IAG Takeover
June 03
16:49 2016

DUBLIN — Aer Lingus is not shy when it comes to expansion. In the past few years the carrier has significantly grown its route map across the Atlantic Ocean, adding west coast destinations and new east coast cities as well. Speaking at the IATA Annual General Meeting this year CEO Stephen Kavanagh suggested that the growth was insufficient for the carrier’s ambitions and that other opportunities would soon present themselves. It is unclear, however, that he expected such to show up less than 48 hours later.

A special session at the show focused on the state of the aviation industry in Ireland. During that panel discussion Kavanagh explained that, while westbound expansion has been important, the company has not grown as much going east based mostly on geographic restrictions (and, not mentioned, limited long-haul fleet growth). Thanks to the IAG deal and the partial ownership stake by Qatar Airways in the group, those easterly routes begin to look more appealing.

We joined IAG in September and we’ve been struggling to keep up with the level of opportunity now at our disposal. While we’ve been focused on building and exploiting the opportunities going west there is certainly an opportunity for us in the future to flow into the geographic advantage Qatar has and to plug in to that network. Now that we have not just a shareholder but also a partner I think it is only a matter of time before we exploit that opportunity.

Just two days later that “matter of time” was made much clearer as Qatar Airways GCEO Akbar Al Baker indicated that Dublin and Las Vegas were on his company’s route growth plans for 2017. Aer Lingus expects that it will be able to codeshare on the Qatar-operated flights and use that as an opportunity to expand its global footprint, according to Kavanagh.

Aer Lingus was hesitant to expand into the Gulf Region, especially facing the capacity offerings of Emirates and Etihad into and beyond the area. By leveraging the Qatar Airways partnership new opportunities arise. But there are some questions around just how much flow it will be able to deliver into the Doha service. Dublin’s geography lends itself spectacularly well to serving as the connection point of choice crossing the Atlantic. But for travelers between Europe and most other destinations served by Qatar Airways Ireland is spectacularly out of the way.

It is possible that the partnership can flow passengers between Doha and Aer Lingus’ North America destinations but opportunities there remain limited, both because of the low number of passengers with a destination of Doha and because of the high number of non-stop options to Doha from North America and the additional routes via Abu Dhabi or Dubai with just a short onward connection to Doha.

Building connections between major hubs within an alliance – and especially within the group of shared ownership – offers the opportunity to move passengers more easily and efficiently. Adding this route makes a lot of sense from that perspective.

For Aer Lingus it is arguably the best-case scenario as it gets the exposure and additional destination options. But some questions remain about the overall flow of passengers on this route, especially with growing capacity from the Middle East 3 carriers to other European and North American destinations.

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Seth Miller

Seth Miller

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