On Friday 22nd September, County Kildare Chamber hosted their second business breakfast of the year, this time with guest speaker Stephen Kavanagh, CEO of Aer Lingus.
The event, sponsored by IDA Ireland, was opened with an address by Conor Simpson, Regional Manager for Mid East and Dublin region at IDA Ireland. Conor spoke of economic improvement across Ireland in recent years, with growth of 4% anticipated for 2017, an improvement on credit perception internationally and recognition for the efforts made in Ireland to continually improve on our “robust broad based economy”.
In relation to Kildare, Conor emphasized that we are ideally located for FDI opportunities with good infrastructure in terms of N4/N7/M9 connections and easy airport access. Kildare is also home to a young well skilled working population as well as an incremental feed of talent from the only county in the mid-East region with a University presence. IDA is committed to endorsing FDI investment into Kildare.
Following Conor’s address, Vivian Cummins introduced our keynote speaker for this event – Stephen Kavanagh, CEO Aer Lingus.
Stephen was appointed CEO of Aer Lingus over two years ago with 28 years’ experience in the airline under his belt. Having started at grassroots level, it was apparent from Stephen’s address that he fully understands the complexities of the aviation business, the supports necessary for a business to thrive as well as the challenges for airlines internationally as well as in Ireland. Under his guidance, Aer Lingus has made more money in the last 3 years than it did in the 79 years previous.
Since taking the helm at Aer Lingus, Stephen has stripped back the operating model, got fit for purpose and it is now ready to exploit the market.
Aer Lingus is the only Irish carrier to hold a Skytrax 4 Star rating. It has no ambition to be a 5 star carrier. 5 star ratings mean complex customer offerings and “complexities don’t add value”. The airline achieved the 4 star accreditation through its journey from “good to great” including development of their new website and mobile app, flexible options on flight bookings, improvements on inflight experience and price lock options to name a few. Customers of Aer Lingus are now their ‘guests’ with the guest experience being the “heart of the business”. Aer Lingus aim is to “under promise and over deliver”.
Aer Lingus growth is primarily funded through its profitable short haul network. Its investment in short haul flights has mostly been in flight scheduling. It focuses on cost reduction by maintaining a simple demand led model. However, Aer Lingus faces stiff competition in this space. Where it excels is in transatlantic flights.
Aer Lingus is currently the leading value carrier across the North Atlantic. This accolade could only be achieved through cost savings on the airlines part. Part of these savings can be attributed to their membership of International Consolidated Airlines Group, which they joined in 2015. Membership of IAG allows Aer Lingus to enhance their presence in the aviation market whilst retaining their current brand as the Irish Flag carrier. It also facilitates cost savings through access to procurement synergies.
Transatlantic growth is an integral element of Aer Lingus strategy to expand their Dublin Airport base into a major European transatlantic gateway. Traditionally Aer Lingus connected Irish residents to North America, today more than a third of transatlantic guests begin their journey in the UK or mainland Europe connecting via Dublin. The convenience of U.S. Customs and Border Protection services at Dublin has enhanced the continued growth of Aer Lingus Dublin operation as a connecting gateway.
In addition to exploiting our unique selling point as “natural gateway between Europe and North America”, Aer Lingus are continually investing in infrastructure with new smaller aircraft in the pipeline for the imminent future. These new models, whose flight range is limited between UK & Ireland to North America only, will not only expand Aer Lingus NA footprint but will also increase sales over their European counterparts.
However, the aviation industry like all other industries is hugely dependent on investment in infrastructure. Stephen addressed the legacy of underinvestment in Dublin Airport historically and the culture of reactive investment. His ambition is to work with the DAA and Aer Lingus’ competition to work “co-operatively and in partnership” looking towards the future. Stephen’s address concluded with a famous quote from Field of Dreams “If you build it, they will come. ”
Presentation by CE of the Chamber Allan Shine to outgoing President Vivian Cummins