Aer Lingus (ISEQ: AERL, LSE: AERL) (a phonetic rendering of the Irish Aer-Loingeas, "air fleet") is the flag carrier of Ireland. It operates a fleet of Airbus aircraft serving Europe, North America and northern Africa. It is Ireland's oldest and second largest airline after Ryanair. Its head office is located on the grounds of Dublin Airport in Fingal.

The airline has five bases, with its main being at Dublin (HQ location and largest base) and Cork (second largest base).

Aer Lingus is a former member of the Oneworld airline alliance, which it left on 31 March 2007. While Aer Lingus is not in an alliance it has codeshares with Oneworld, Star Alliance and SkyTeam members, as well as interline agreements with Aer Arann and JetBlue Airways. The company employs 4,000 people and in 2008 had revenues of €1.4 billion. Aer Lingus flew 10 million passengers in 2008. It has a mixed business model, operating a low fare service on its European and North African routes and full service, two-class flights on transatlantic routes.

The airline is 29.4% owned by Ryanair and 25.4% owned by the Government of Ireland. It was floated on the Dublin and London Stock Exchanges on 2 October 2006, following prior government approval (the government previously owned 85% of the airline).

Early years:
Aer Lingus was founded on 15 April 1936, with a capital of £100,000. 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 is an anglicisation of the Irish form Aer Loingeas, which means Air Fleet. The name was proposed by Richard F O'Connor, who was County Cork Surveyor, as well as an aviation enthusiast. Aer Lingus was originally pronounced 'air ling-us' (as the Irish Aer Loingeas is pronounced) and only later did the pronunciation change to the 'air ling-gus' used now.

On 27 May 1936, five days after being registered as an airline, its first service began between Baldonnel Airfield in Dublin and Whitchurch in Bristol, England, using a six-seater De Havilland 84 Dragon (registration EI-ABI) biplane, named Iolar (Eagle).

Later that year, the airline acquired its second aircraft, a four-engined biplane De Havilland 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 DH84 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.

In 1938, Iolar was replaced by a de Havilland DH.89 Dragon Rapide, and a second DH86B was also purchased. Two Lockheed 14s arrived in 1939, Aer Lingus' first all-metal aircraft.

In January 1940, a new airport was completed in the Dublin suburb of Collinstown and Aer Lingus moved their operations there. A new DC-3 was bought and new services to Liverpool and an internal service to Shannon were inaugurated. 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 planes, initially mostly Douglas DC-3s, were painted in a silver and green livery. The airline's first flight attendants were introduced.

In 1946, a new Anglo-Irish agreement gave Aer Lingus exclusive UK traffic rights from Ireland in exchange for a 40% holding by BOAC and British European Airways (BEA). Because of Aer Lingus' growth the airline bought seven new Vickers Viking planes in 1947, however, these proved to be uneconomical and were soon sold.

In 1947, Aerlínte Éireann came into existence with the purpose of operating transatlantic flights to New York from Ireland. Five new Lockheed Constellations were ordered 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. The Constellations were then sold to BOAC.

During the late 1940s and early 1950s, Aer Lingus introduced routes to Brussels, Amsterdam and Rome. Because of the expanding route structure the airline became one of the first to order Vickers Viscount 700s in 1951, which were placed in service in April 1954. In 1954, Prof. Patrick Lynch was appointed chairman of Aer Lingus and Aer Rianta at the young age of 38, taking on the task of turning the £60,000 deficit of the companies into a profit. He was Chairman for 21 years to 1975, and retired from that position at his own request to the government of the day. Even with changes of government, they retained him in this position. In 1956, Aer Lingus introduced a new, green-top livery with a white lighting flash down the windows and the Irish flag displayed on the fin.

First transatlantic service:
On 28 April 1958, Aerlínte Éireann operated their first transatlantic service from Shannon to New York. Three Lockheed Super Constellations were used for the twice-weekly service. The aircraft were leased from the American airline Seaboard and Western while Irish cabin crews were used. This arrangement continued until 1 January 1960 when Aerlínte Éireann was renamed Aer Lingus - Irish International Airlines.

Aer Lingus bought seven Fokker F27 Friendships, 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 disposed of them during 1966 in favour of secondhand Viscount 800s.

The airline entered the jet-age on 14 December 1960 when three Boeing 720s were delivered for use on the New York route and the newest Aer Lingus destination Boston.

In 1963, Aer Lingus added Carvairs to the fleet. With this aircraft, five cars could be transported by loading them into the fuselage through the nose of the aircraft. The Carvair proved to be uneconomic for the airline partly due to the rise of car ferry services by sea, and the aircraft were then 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 their 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 from Dublin and Cork to Paris and via Manchester to Amsterdam, Copenhagen, Düsseldorf and Frankfurt. A new livery was adopted in the same year, with a large green shamrock on the fin and titles of Aer Lingus-Irish International just above the plane's windows. In 1966, the remainder of the company's shares held by Aer Rianta were transferred to the Minister for Finance.

In 1966, the route from Shannon to Montreal and onward to Chicago was inaugurated. Also, in 1968, flights from Belfast to New York were started. The service was soon sus-pended, due to the beginning of the Troubles in the area. 1969 saw the introduction of Boeing 737s to the Aer Lingus fleet, to cope with the high demand for flights between the cities of Dublin and London. Later, Aer Lingus extended the 737 flights to all of their European network.

1970s to present:

In 1970, Aer Lingus took delivery of two Boeing 747s for use on the transatlantic routes. A third was later added to the fleet but one was leased out because it was not profitable at first for the company to fly 747s across the Atlantic Ocean. In 1974, a new livery was unveiled and the word International disappeared from the fuselage titles. The livery included two colors of blue and one green, plus the white shamrock on the fin.

In September 1979, Aer Lingus became the first 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 1984, a fully-owned subsidiary, Aer Lingus Commuter, was formed so that Aer Lingus could fly to larger cities in Ireland and Britain whose flying time from Dublin did not require jet planes. These services were operated primarily by five of the Belfast-built Short 360 after conducting a trial with the Short 330. Around this time Aer Lingus purchased a majority sharehold in the cargo airline Aer Turas, owner of some DC-8 freighter jets.

Between 1987 and 1989, new Boeing 737s arrived to replace the older ones, and six Fokker 50s were added to the Commuter fleet. During 1990, after the passage of the deregulation act for the airline industry in Ireland, Aer Lingus had to reconsider its operational policies. The BAC One-Elevens were retired and five new 737s arrived. In 1991, four Saab 340Bs arrived at the commuter division to replace the Short 360 planes. By 1992 Aer Lingus's entire original 737-200 fleet had been replaced and was now the first operator in the world of 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.

Airbus operations:

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 Boeing 747s. The late 1990s saw Aer Lingus return to Belfast with a service to New York via Shannon. Newark Liberty International Airport was also added as a destination, but these flights stopped in 2001.

The first Airbus short-haul aircraft arrived in 1998 in the form of the A321, initially to mainly operate the Dublin-Heathrow route. Six were delivered in 1998 and 1999 and continue in service today. The first A320 was delivered in 2000, with three more added to the fleet by 2001.

On 1 February 2001, Aer Lingus Commuter was merged back into the mainline operation. Following the September 11 attacks, Aer Lingus' business was severely reduced. Staff numbers were cut, destinations were dropped and the fleet was reduced. The airline has since weathered the storm and is back in profit - this has largely been achieved through a strategy of 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). They are positioning themselves as competition to the European no-frills airlines while offering intercontinental flights as well. Business class travel for short haul flights has been phased out. Cargo services remain on a small number of routes.

A large order for A320 aircraft saw deliveries commencing in 2004 and continuing to the present. The delivery of these aircraft allowed the withdrawal of the Boeing 737 to begin and on 29 October 2005, Aer Lingus withdrew its last two 737 aircraft from service when one operated the last sectors from Dublin to Nice, France and back. This marked the end of the use of Boeing aircraft at Aer Lingus and made the fleet all Airbus.

On 27 October 2005, Aer Lingus announced their 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 Airline. 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, Canada from 1966-1979. The great circle distance of 5,926 kilometres (3,682 mi) is comparable to the service to Chicago. At the same time Mr. 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 XWB as well as six A330-300E aircraft. These will be used to expand Aer Lingus' long haul operations as well as replacement aircraft for three older models. Deliveries of the A330E began in February 2009 and the A350 XWB will begin in 2014.

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 formally 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%.

Aer Lingus withdrew from the Oneworld airline alliance on 1 April 2007, however it intends to maintain strong bilateral links with various Oneworld members and has no intention of joining any other global alliance. On 19 November 2006, Aer Lingus declared that it would shortly announce agreements with American Airlines, Cathay Pacific and Qantas. The decision to leave the alliance was due to Aer Lingus repositioning itself as a low-fares point to point carrier, which is at odds with Oneworld's pitch to the premium international frequent flyer, and the cost involved for Aer Lingus with the acceptance of new members to the alliance.

On 6 February 2007, however, the airline announced its intention to form a new alliance with JetBlue Airways. This new alliance will be a weblink between the two airlines, meaning Aer Lingus customers will be able to book JetBlue destinations from the Aer Lingus website, and vice versa for JetBlue for customers. In 2008, it also announced an alliance with United Airlines for connecting services within the continental US.

With the flotation of Aer Lingus on the stock exchange, Aer Lingus had planned to expand its route network, but this is on hold due to the economic situation.

Ryanair takeover bid:

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 remaining shares. 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%. There were also reports in the Irish Times 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 taken its stake to 26.2% of the airline.

On 21 December 2006, Ryanair announced it was withdrawing its current bid for Aer Lingus, with the intent of pursuing another bid in the near future after the European Commission finishes investigating the current bid. The EC has been concerned that the takeover would reduce consumer choice and increase fares.

On 27 June 2007, the European Commission announced their 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 was to establish its first base outside of the Republic of Ireland at Belfast International Airport. Services from Belfast International commenced in December 2007. As of July 2008, the airline has three Airbus A320 aircraft based at the airport, serving eleven European destinations. Significantly, this move restores the Belfast International to London Heathrow Airport link and Aer Lingus cooperates with its codeshare partner British Airways on this route to connect with BA's network at Heathrow. In order 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.

Open Skies:

On 22 March 2007, as a result of the Open Skies Agreement, Aer Lingus announced three new long-haul services to the United States. From Autumn 2007, Aer Lingus commenced direct flights to Orlando, San Francisco and Washington, D.C.-Dulles. These services were facilitated by the arrival of two new Airbus A330 aircraft in May 2007. The airline also serves Boston (Logan International Airport), Chicago (O'Hare International Airport), and New York (JFK Airport). Aer Lingus ended its Middle-Eastern Route to Dubai in March 2008, ended its Los Angeles route in November 2008. The Washington and the San Francisco routes have since been discontinued as of 24 October 2009. The Washington route resumed on 28 March 2010 when the airline began flights from Washington D.C. to Madrid, Spain.

Current situation:

After reporting losses of €22 million for the first half of the year, in October 2008, Aer Lingus announced a €74 million cost saving plan. This involves up to 1500 job cuts including the loss of cabin crew bases in Shannon and Heathrow. The airline plans to scale back ground operations in Cork and Shannon Airport as well as outsourcing check-in, baggage handling - cargo and catering services in Dublin. Transatlantic services will be reduced and staff will be replaced with US-based cabin crew. A pay freeze has been introduced to run until the end of 2009. This has been met with a largely negative response particularly from trade unions. These cut backs have since been cancelled, and new cut backs including lower pay and a change in working conditions for ground staff have been implemented.

In December 2008, Aer Lingus announced that the Shannon - Heathrow service would resume from 29 March 2009 following new arrangements with the trade unions on staff costs and the Shannon Airport Authority on airport charges. However at the end of June 2009 the company had accumulated losses of €93 million euro and Chairman Colm Barrington confirmed this situation could not continue. In October 2009 newly appointed Chief Executive Christoph Mueller announced a radical cost cutting plan that would lead to the loss of 676 jobs at the company and see pay and pension reductions for those being kept on. The total plan aimed to achieve savings of €97 million euro between then and 2011. As a 6 week consultation process began Mr. Mueller refused to rule out further cuts in the future.

Second Ryanair takeover bid:

On 1 Dec 2008, Ryanair launched a second takeover bid of Aer Lingus, making an all-cash offer of €748 million (£619mil; US$950mil). The offer is a 28% premium on the value of Aer Lingus stock during the preceding 30 days. Ryanair said, "Aer Lingus, as a small, stand alone, regional airline has been marginalised and bypassed as most other EU flag carriers consolidate." The two airlines would operate separately and Ryanair stated that they would double the Aer Lingus short haul fleet from 33 to 66 and create 1,000 new jobs. The Aer Lingus Board rejected the offer and advised its shareholders to take no action. The offer has now been rejected by all shareholders. It is the second failed attempt by Michael O'Leary to take over the national flag carrier. Ryanair left the offer open to Aer Lingus until they withdrew their bid on 30 January 2009. The Irish Government slammed O'Leary's offer as "undervaluing the airline" and stated that a Ryanair takeover would have a "significant negative impact" on competition in the industry and on the Irish consumer. It is likely that Ryanair will make another bid for Aer Lingus in the near future.

London Gatwick hub:
On 19 December 2008, Aer Lingus announced that it will be opening up a base at London Gatwick Airport. Four aircraft are based there from April 2009 serving eight destinations. The destinations include Faro, Malaga, Munich, Nice, Vienna, Dublin, Warsaw, Knock and Zurich. CEO Dermot Mannion also said the company expects to increase the number of planes based at Gatwick to eight within 12 months.

As of 6 June 2009, the airline has based an additional A320 aircraft at London Gatwick, bringing the total number of aircraft based there to five, making Gatwick its biggest base outside Ireland. This has resulted in six new routes from their Gatwick hub. These are Bucharest, Eindhoven, Tenerife, Lanzarote, Warsaw and Vilnius for winter 2009. The Gatwick/Nice route has been suspended for the winter months.

On 8 January 2010 due to the weak demand in air travel Aer Lingus has announced that it is to reduce the number of aircraft based at Gatwick from five to three. The three remaining aircraft will operate the carrier's services to Dublin, Knock, Malaga and a new route to Cork.

Resignation of Dermot Mannion:

On 6 April 2009, CEO Dermot Mannion announced his resignation from the airline after four years as Chief Executive. He has since been replaced by Christoph Mueller, former head of TUI Travel and Sabena.

2009 cutbacks:

On 2 December 2009, Aer Lingus announced that talks with their unions had broken down. As a result, the board voted to reduce capacity, and with it associated jobs, as a response. According to CEO Christoph Mueller, concessions offered by unions were of a short-term nature, and the airline was asked for high compensation in return. Aer Lingus has not yet identified the routes or jobs to be cut, but they would most likely "commence immediately and will be compulsory," according to Mueller.

Aer Lingus Regional:

In January 2010 Aer Lingus announced that the carrier was in advanced talks with Irish regional airline Aer Arann about a possible commercial alliance that would see Aer Arann provide feeder services for Aer Lingus flights between Dublin/Cork and UK regional airports. Aer Lingus will not take an equity stake in Aer Arann but the deal will result in Aer Lingus bulk buying seats on Aer Arann services. The move will allow Aer Lingus to expand its operations without the need for additional aircraft plus serve airports that cannot handle their A320/321 fleet. The agreement will expand on both carriers current Interline arrangement on flights between Dublin/Cork.

It has since been announced that this service will be branded "Aer Lingus Regional" with flights operated with Aer Arann aircraft and crew. The service will include all existing Aer Lingus and Aer Arann services plus 3 new services operated by Aer Arann. Aer Lingus will receive a franchise fee from Aer Arann and all flights will be sold on the Aer Lingus website.

Destinations:

Aer Lingus has a short-haul European network with over 60 destinations, although some of these are offered only on a seasonal basis. There are also five long-haul destinations served in the United States.

The airline's European network has been designed to compete with low-frills budget airline Ryanair. Only one cabin class is offered in the short-haul fleet and passengers must pay for baggage carried in the hold, and for food and drink on board.

Aer Lingus serves the United States primarily as their long-haul routes with the use of the Airbus A330. Aer Lingus serves Boston, Chicago, Orlando, Washington DC, and New York with Orlando being its longest route.

In January 2009, the airline announced it would open a new route between Madrid and Washington DC effective 28 March 2010. It will be the airline's first transatlantic route not originating in Ireland. This route will be a codeshare with United Airlines but operated by Aer Lingus.

Aer Lingus previously served Baltimore/Washington, Dubai, Los Angeles, Montreal, Newark, and San Francisco. On 12 June 2009, Aer Lingus suspended its services between Shannon-Chicago, and its direct route between Dublin-Washington DC for winter of 2009 due to weakening demand in air travel. It still offers a connection to Washington DC in a code-share flight operated by Jet Blue Airways and Aer Lingus via New York. It has not yet been announced whether these direct routes will be reinstated for Summer 2010. The airline also stated that the Shannon-New York (JFK) route would be "kept under close review", however it is understood the airline is sustaining the route after coming under pressure from the Irish government to keep the Shannon-New York (JFK) connection.

Codeshare Agreements:

Aer Arann - Flights from Cork to US via Dublin
British Airways - Flights to London Gatwick and London Heathrow Airport on behalf of British Airways
Jet Blue - Flights from New York JFK and Boston across US
KLM - Flights to Amsterdam from Cork and Dublin on behalf KLM
United Airlines - Flights across the US and Canada via Chicago operated by United, and flights between Washington and Madrid operated by Aer Lingus.