Aer Lingus ( air LING-gəs; an anglicisation of the Irish aerloingeas [ˌeːɾˠˈl̪ˠɪɲɟəsˠ], meaning "air fleet") is the flag carrier of the Republic of Ireland. It was founded by the Irish Government in 1936. Between 2006 and 2015 it was privatised, and it is now a wholly owned subsidiary of International Airlines Group (IAG). The airline's head office is on the grounds of Dublin Airport in Cloghran, County Dublin.
Aer Lingus was a member of the Oneworld airline alliance, which it left on 31 March 2007. After the takeover by IAG, it was expected that Aer Lingus would re-enter Oneworld. However, at a press briefing on 15 November 2017, the airline's then CEO Stephen Kavanagh stated that the airline has "no plans to join Oneworld". The airline has codeshares with Oneworld, Star Alliance and SkyTeam members, as well as interline agreements with Etihad Airways, JetBlue Airways and United Airlines. Aer Lingus has a hybrid business model of low-cost and traditional carriers, operating a mixed fare service on its European routes and full service, two-class flights on transatlantic routes.
Ryanair owned over 29% of Aer Lingus stock, and the Irish state owned over 25% before being bought out by IAG in 2015. The state had previously held an 85% shareholding until the government decided to float the company on the Dublin and London stock exchanges on 2 October 2006. The principal group companies include Aer Lingus Limited, Aer Lingus Beachey Limited, Aer Lingus (Ireland) Limited and Dirnan Insurance Company Limited, all of which are wholly owned.
On 26 May 2015, after months of negotiations on a possible IAG takeover, the Irish government agreed to sell its 25% stake in the company. Ryanair retained a 30% stake in Aer Lingus, which it agreed to sell to IAG on 10 July 2015 for €2.55 per share. In August 2015, Aer Lingus' shareholders officially accepted IAG's takeover offer. IAG subsequently assumed control of Aer Lingus on 2 September 2015.
History
Early years
Aer Lingus was founded on 15 April 1936, with a capital of £100,000. Its first chairman was Seán Ó hUadhaigh. Pending legislation for Government investment through a parent company, Aer Lingus was associated with Blackpool and West Coast Air Services which advanced the money for the first aircraft, and operated with Aer Lingus under the common title "Irish Sea Airways". Aer Lingus Teoranta was registered as an airline on 22 May 1936. The name Aer Lingus was proposed by Richard F O'Connor, who was County Cork Surveyor, as well as an aviation enthusiast.
On 27 May 1936, five days after being registered as an airline, its first service began between Baldonnel Airfield in Clondalkin, Dublin and Bristol (Whitchurch) Airport, the United Kingdom, using a six-seater de Havilland DH.84 Dragon biplane (registration EI-ABI), named Iolar (Eagle).
Later that year, the airline acquired its second aircraft, a four-engined biplane de Havilland DH.86 Express named Éire, with a capacity of 14 passengers. This aircraft provided the first air link between Dublin and London by extending the Bristol service to Croydon. At the same time, the DH.84 Dragon was used to inaugurate an Aer Lingus service on the Dublin-Liverpool route.
The airline was established as the national carrier under the Air Navigation and Transport Act (1936). In 1937, the Irish government created Aer Rianta (now called Dublin Airport Authority), a company to assume financial responsibility for the new airline and the entire country's civil aviation infrastructure. In April 1937, Aer Lingus became wholly owned by the Irish government via Aer Rianta.
The airline's first General Manager was Dr J. F. (Jeremiah known as 'Jerry') Dempsey, a chartered accountant, who joined the company on secondment from Kennedy Crowley & Co (predecessor to KPMG Ireland) as Company Secretary in 1936 (aged 30) and was appointed to the role of General Manager in 1937. He retired 30 years later in 1967 at the age of 60.
In 1938, a de Havilland DH.89 Dragon Rapide replaced Iolar, and the company purchased a second DH.86B. Two Lockheed 14s arrived in 1939, Aer Lingus' first all-metal aircraft.
In January 1940, a new airport opened in the Dublin suburb of Collinstown and Aer Lingus moved its operations there. It purchased a new DC-3 and inaugurated new services to Liverpool and an internal service to Shannon. The airline's services were curtailed during World War II, with the sole route being to Liverpool or Barton Aerodrome Manchester, depending on the fluctuating security situation.
Post-war expansion
On 9 November 1945, regular services were resumed with an inaugural flight to London. From this point, Aer Lingus aircraft, initially mostly Douglas DC-3s, were painted in a silver and green livery. The airline introduced its first flight attendants.
In 1946, a new Anglo-Irish agreement gave Aer Lingus exclusive UK traffic rights from Ireland in exchange for a 40% holding by British Overseas Airways Corporation (BOAC) and British European Airways (BEA). Because of Aer Lingus' growth, the airline bought seven new Vickers Viking aircraft in 1947; however, these proved to be uneconomical and were soon sold.
In 1947, Aerlínte Éireann came into existence to operate transatlantic flights to New York City from Ireland. The airline ordered five new Lockheed L-749 Constellations, but a change of government and a financial crisis prevented the service from starting. John A Costello, the incoming Fine Gael Taoiseach (Prime Minister), was not a keen supporter of air travel and thought that flying the Atlantic was too grandiose a scheme for a small airline from a small country like Ireland.
During the late 1940s and early 1950s, Aer Lingus introduced routes to Brussels, Amsterdam via Manchester and to Rome. Because of the expanding route structure, the airline became one of the early purchasers of Vickers Viscount 700s in 1951, which were placed in service in April 1954. In 1952, the airline expanded its all-freight services and acquired a small fleet of Bristol 170 Freighters, which remained in service until 1957.
Prof. Patrick Lynch was appointed the chairman of Aer Lingus and Aer Rianta in 1954 and served in the position until 1975. In 1956, Aer Lingus introduced a new, green-top livery with a white lightning flash down the windows and the Irish flag displayed on the fin.
First transatlantic service
On 28 April 1958, Aerlínte Éireann operated its first transatlantic service from Shannon to New York. In 1960, Aerlínte Éireann was renamed Aer Lingus.
Aer Lingus bought seven Fokker F27s, which were delivered between November 1958 and May 1959. These were used in short-haul services to the UK, gradually replacing the Dakotas, until Aer Lingus replaced them in 1966 with secondhand Viscount 800s.
The airline entered the jet age on 14 December 1960 when it received three Boeing 720 for use on the New York route and the newest Aer Lingus destination Boston.
In 1963, Aer Lingus added Aviation Traders Carvairs to the fleet. These aircraft could transport five cars, which were loaded into the fuselage through the nose of the aircraft. The Carvair proved to be uneconomical for the airline, partly due to the rise of auto ferry services, and the aircraft were used for freight services until disposed of.
The Boeing 720s proved to be a success for the airline on the transatlantic routes. To supplement these, Aer Lingus took delivery of its first larger Boeing 707 in 1964, and the type continued to serve the airline until 1986.
Jet aircraft
Conversion of the European fleet to jet equipment began in 1965 when the BAC One-Eleven started services on continental Europe. The airline adopted a new livery in the same year, with a large green shamrock on the fin. In 1966, the remainder of the company's shares held by Aer Rianta were transferred to the Minister for Finance.
In 1966, the company added routes to Montreal and Chicago. In 1968, flights from Belfast, in Northern Ireland, to New York City started, however, it was soon suspended due to the beginning of the Troubles.
Aer Lingus introduced Boeing 737s to its fleet in 1969 to cope with the high demand for flights between Dublin and London. Later, Aer Lingus extended the 737 flights to all of its European networks.
In 1967, after 30 years of service, General Manager Dr J. F. Dempsey signed the contract for the airline's first two Boeing 747 aircraft before he retired later that year.
1970s to 1990s
On 6 March 1971, Aer Lingus took delivery of the first of two Boeing 747s for use on transatlantic routes. The company later purchased a third for its fleet but quickly offered it for lease because it was not initially profitable for the company to fly 747s across the Atlantic. In 1974, Aer Lingus unveiled a new livery which eliminated the word International and/or Irish from the fuselage titles. The livery included a dark green cheatline, light green upper surfaces and tail, split by a thinner blue line, plus a large white shamrock on the tail fin.
In 1973 Aer Lingus opened the London Tara Hotel.
In 1976, Aer Lingus purchased Dunfey Hotels from Aetna.
In 1977, Aer Lingus recruited its first female pilot, Gráinne Cronin – the airline was the second in Europe (after Scandinavian Airlines) to introduce female pilots.
In September 1979, Aer Lingus became the first European airline other than Alitalia to be used by Pope John Paul II, when he flew aboard a specially modified Boeing 747 (EI-ASI or St. Patrick) from Rome to Dublin and later from Shannon to Boston. In the early 1980s, the 707s were phased out.
In 1983 Aer Lingus subsidiary Dunfey Hotels acquired Omni International Hotels.
In 1984, the airline formed a fully owned subsidiary, Aer Lingus Commuter Ltd., so that Aer Lingus could fly to larger cities in Ireland and Britain whose flying time from Dublin did not require jet aircraft. These services employed five of the Belfast-built Short 360 after conducting a trial with the Short 330. This subsidiary inherited the name of a previous division, constituted in March 1983, activated on the following 1 May and equipped with Short 330. Around this time, Aer Lingus purchased a majority shareholding in the cargo airline Aer Turas, owner of some DC-8 freighter jets.
In 1988, Aer Lingus sold Omni Hotels to World International Holdings, Ltd., and the Hong Kong–based conglomerate The Wharf (Holdings) Limited for $135 million.
Between 1987 and 1989, new Boeing 737s arrived to replace the older ones, and six Fokker 50s were added to the Commuter fleet. In 1990, after the passage of the deregulation act for the airline industry in Ireland, Aer Lingus reconsidered its operational policies. It retired the BAC One-Elevens and replaced them with five new 737s. In 1991, four Saab 340Bs arrived at the commuter division to replace the Short 360 aircraft. By 1992, Aer Lingus's entire original 737-200 fleet had been replaced, and it was now the first carrier in the world operating all three versions of the second-generation 737. These were the −300, −400 and −500 series, although the −300 did not stay long in Aer Lingus service.
In 1994, Aer Lingus started direct services between Dublin and the United States using the Airbus A330 and in May of that year, Aer Lingus operated the first A330-300 ETOPS service over the North Atlantic. This led to the phasing out of the Boeing 747 and the briefly operated Boeing 767-300ER. On 2 October 1995, the Boeing 747 service ceased operations after twenty-five years of service. By that time, over eight million people had travelled across the Atlantic in Aer Lingus 747s. The late 1990s saw Aer Lingus return to Belfast with service to New York via Shannon. It also added Newark Liberty International Airport as a destination, but discontinued these flights in 2001.
In 1995 Aer Lingus sold Copthorne Hotels, a chain of 18 hotels in the UK, France and Germany and originally founded by British Caledonian, to cut operating losses. Aer Lingus had owned the chain since 1987.
The first Airbus short-haul aircraft arrived in 1998 in the form of the Airbus A321, initially to mainly operate the Dublin-Heathrow route. Six were delivered in 1998 and 1999. The first Airbus A320 was delivered in 2000, with three more added to the fleet by 2001.
2000s to 2010s
On 1 February 2001, Aer Lingus Commuter merged back into the mainline operation. The business was severely affected by the 9/11 attacks in the United States. In response, the airline cut staff numbers and destinations and reduced its fleet. As a result, it weathered the storm and returned to profit, largely through lowering the airline's cost base, updating the fleet with modern Airbus equipment and developing new routes to mainland European destinations. Aer Lingus had previously largely neglected mainland Europe in favour of US and British destinations. It positioned itself as competition to the European no-frills airlines while offering intercontinental flights, phased-out Business class travel for short-haul flights, but retained cargo services on a small number of routes.
A large order for A320 aircraft saw deliveries commencing in 2004 and continuing to 2011. The delivery of these aircraft allowed the withdrawal of the Boeing 737. On 29 October 2005, Aer Lingus withdrew its last two 737 aircraft from service, marking the end of Boeing aircraft at Aer Lingus, and the beginning of an all-Airbus fleet.
On 27 October 2005, Aer Lingus announced its first scheduled service to Asia from March 2006 as Dubai International Airport in the United Arab Emirates, where Chief Executive Dermot Mannion was based when at Emirates. Despite the Aer Lingus press release describing it as the first long-haul service outside the United States, there had in fact been a previous service to Montreal from 1966 to 1979. The great circle distance of 5,926 kilometres (3,682 mi) is comparable to the service to Chicago. At the same time, Mannion linked the funding of new long-haul aircraft to replace the A330 fleet with the privatisation of the airline. The Dubai service ceased in March 2008 as the airline sought to increase its market share in the newly liberalised transatlantic market.
On 6 June 2007, Aer Lingus strengthened its relationship with the European manufacturer by ordering six of the new A350-900 and six A330-300. These were used to expand long-haul operations as well as replace three older models. Deliveries of the A330 began in February 2009. In 2011, Aer Lingus switched their remaining three A330 orders to A350-900s, with delivery no sooner than 2017. The A350 orders were subsequently assumed by IAG in 2015.
Flotation
In preparation for the commercial flotation of Aer Lingus on the Dublin stock market, the Irish government agreed to abolish the Shannon Stopover from the end of 2006 in stages.
The company began conditional (or "grey-market") share dealings on 27 September 2006 and was admitted to the Official Lists of the Irish Stock Exchange and London Stock Exchange on 2 October 2006. At the time of the flotation, the Irish government maintained a 28% shareholding, while employees held 15%. The stock IPO offer price was €2.20.
Aer Lingus withdrew from the Oneworld airline alliance on 31 March 2007, instead, entering into bilateral agreements with airlines including British Airways, Virgin Atlantic, Delta Air Lines, KLM, and United Airlines. Aer Lingus explained the move stating the carrier was repositioning as a low-cost carrier, which did not fit with Oneworld's pitch to the premium international frequent flyer.
On 6 February 2007, however, the airline announced its intention to form a new alliance with JetBlue. This new alliance was to act as a weblink between the two airlines, enabling Aer Lingus customers to book JetBlue destinations from the Aer Lingus website. In 2008, it also announced an alliance with United Airlines for connecting services within the US.
With the flotation of Aer Lingus on the stock exchange, Aer Lingus had planned to expand its route network, but this was put on hold due to the economic situation.
First Ryanair takeover bid (2006)
On 5 October 2006, Ryanair launched a bid to buy Aer Lingus. Ryanair CEO Michael O'Leary said the move was a "unique opportunity" to form an Irish airline. The "new" airline would carry over 50 million passengers a year. Ryanair said it had bought a 16% stake in Aer Lingus and was offering €2.80 for the remaining shares, a premium over the €2.20 the shares were trading for. The firm was trading at €1.13bn but Ryanair's offer valued it at €1.48bn. On the same day Aer Lingus rejected Ryanair's takeover bid. On 5 October 2006, Ryanair confirmed it had raised its stake to 19.2%, and said it had no problem in the Irish Government keeping its 28.3%. The Irish Times reported that the Government would possibly seek judgement from the courts, and referral to competition authorities in Dublin – although this would be automatic under European regulation, as the combined group would control 78% of the Dublin – London passenger air traffic.
On 29 November 2006, Ryanair confirmed it had increased its stake to 26.2%.
On 21 December 2006, Ryanair announced it was withdrawing its bid for Aer Lingus, intending to pursue another bid soon after the European Commission finished investigating the bid. The EC had been concerned that the takeover would reduce consumer choice and increase fares.
On 27 June 2007, the European Commission announced its decision to block the bid on competition grounds saying the two airlines controlled more than 80% of all European flights to and from Dublin Airport.
Cross border expansion
On 7 August 2007, the airline announced that it would establish its first base outside the Republic of Ireland at Belfast International Airport in Northern Ireland. Services from Belfast International commenced in December 2007. As of July 2008, the airline had three Airbus A320 aircraft based at the airport, serving eleven European destinations. Significantly, this move restored the Belfast International to London Heathrow link and Aer Lingus cooperated with its codeshare partner British Airways on this route to connect with BA's network at Heathrow. To do so, the airline discontinued its Shannon-Heathrow service, a move that generated political controversy in the west of Ireland, particularly as the Shannon-London route was still profitable. The airline predicted that this move would add one million additional passengers annually. The Shannon to Heathrow service has since been reinstated.