The strong financial results released by Aer Lingus yesterday mask a number of worrying developments at the national airline. Operating profits may have grown by 29 per cent to €107 million last year, but the downward march in costs which has characterised the company since its turnaround in the aftermath of September 11th appears to be in danger of stalling. The company has admitted that it has not met the targets set out in the three-year plan approved by the board last June, which included the shedding of another 1,300 jobs.
One reason is obvious, the main architects of the plan have left the airline. Mr Willie Walsh, who oversaw the turnaround of the airline as chief executive, left in January along with his two senior executives, Mr Brian Dunne and Mr Séamus Kearney. In reality, the three had been semi-detached for some months, having offered their resignations in November in frustration over the Government's refusal to face up to the strategic issues facing the airline.
In many ways, the figures published yesterday are the legacy of the three. They show the airline is in good health. Operating profits, turnover, passenger numbers and other key indicators are all heading in the right direction. In addition, the company has been able to set aside more than €97 million of its own resources to cover the rationalisation programme.
But as the chairman of the company, Mr John Sharman, made clear yesterday, the continuation of this success depends on the implementation of the business plan which would bring the airline's cost base closer still to that of its main competitor Ryanair.
To expect a company to be successful in such an endeavour without a chief executive is naive in the extreme. Equally, it is folly to expect that an individual of the calibre necessary to carry out such a task would accept responsibility for guiding the company into the future without knowing precisely what the principal shareholder wants to happen.
But this is precisely the situation that the Government has engineered at Aer Lingus. It must be clear to all concerned at this stage that any further delay in appointing a chief executive puts hard-won gains in serious jeopardy. Yet the Coalition's continued failure to set out its policy in terms of Aer Lingus and the critical issues of ownership and funding mean that securing a suitable chief executive is extremely difficult.
The indications are that a candidate of some merit is waiting in the wings but is reluctant to commit himself in the absence of a clear statement from the Government on ownership. Such a statement was expected from Cabinet this week, but did not materialise, and the issue now appears to have become linked to the ownership of a second terminal at Dublin airport, which has proved an extremely divisive issue for the current administration. The link should be broken and a decision made on Aer Lingus without further delay.