Aer Lingus needs millions in extra liquidity says new boss

Aer Lingus (EI, Dublin Int’l) needs several hundred million euros in additional liquidity due to continuous disruptions caused by the COVID-19 pandemic and does not expect the easing of Irish travel curbs next month to provide significant relief, says new chief executive officer, Lynne Embleton. Reuters reports Embleton, the former IAG International Airlines Group Cargo head, who took over the reins at Aer Lingus in April, told an online parliamentary transport committee briefing on June 22 that the Irish flag carrier was losing more than EUR1 million euro (USD1.19 million) a day. The airline had suffered losses of up to EUR1 billion (USD1.1 billion) since travel restrictions were introduced last year, she was quoted as saying by The Belfast Times. “We are looking to restore our liquidity to the tune of a few hundred million euros. The precise numbers depend on where we can access liquidity from, the terms of that liquidity and indeed the number of days we continue to burn cash,” she said. Reuters reports the airline is currently in funding talks with the Irish government after IAG, its parent company, already received a EUR150 million (USD179 million) loan from Ireland’s sovereign wealth fund last year. The company recently announced company-wide layoffs and the closure of its crew base in Shannon, one of its four bases, an issue scrutinised by the Irish parliamentarians. Embleton defended this decision which, she said, would not be reversed as the number of flights out of Shannon did not justify a crew base at the airport. She insisted the move did not signal a retreat from the Irish regions but said further restructuring was required. She could not guarantee that there would be no further job losses at the airline. “I’d love to be able to give assurances that there won’t be job losses and there won’t be changes required, but I can’t,” Embleton said. “We will be smaller for some time to come, unfortunately, and it will take a long time to fully recover,” she added. She said discussions with Irish commuter start-up Emerald Airlines (Ireland) were progressing well but were not yet concluded after it had won the tender to run the Aer Lingus Regional franchise following the demise of former operator Stobart Air (RE, Dublin Int’l). As previously reported, Emerald Airlines founder Conor McCarthy earlier this week confirmed the nascent carrier had signed a memorandum of understanding with Aer Lingus for a ten-year contract to run the regional franchise from late 2022 until 2032. In the meantime, Aer Lingus and British Airways (BA, London Heathrow) regional subsidiary BA CityFlyer (CJ, London City) have stepped in to operate the majority of Stobart’s former routes until at least the end of August 2021, Embleton said. She said Aer Lingus had been operating 40 short-haul aircraft before the pandemic but was now closer to operating 30, with many of those not seeing much flying on a daily basis. Of the airline’s 19 long-haul aircraft, very few are working hard, she said, adding some will need money spent to bring them back into service. According to the ch-aviation fleets advanced module, Aer Lingus’s fleet comprises thirty-one A320-200s, of which only sixteen are active; seven A321-200NX(LR)s of which five are active; and twelve A330-300s of which nine are active. It also has three A321-200s and three A330-200s in storage. Embleton was also critical of the government’s COVID-19 travel restrictions, amongst the strictest in the European Union. Ireland will adopt the EU’s COVID-19 certificate to allow its citizens to move more freely across the bloc from July 19 and broadly apply the same approach to Britain and the US. “It is looking too little too late to have a significant bounce that will get us on the right path to restoring connectivity, supporting jobs in the near term,” Embleton said.