AER LINGUS ANNOUNCES DEAL WITH AER ARANN, FUTURE STRATEGY PATH - Aer Lingus is holding an Investor Day in London for shareholders and equity analysts today. Statements released to the stock exchange this morning detail a number of steps the airline is going to take to review and restructure its business, and to get its costs in order. Aer Lingus says savings of €40-50m will be made this year, and €47m next year from its restructuring plan. It is also anticipating that lower fuel costs will help to offset lower revenues because of the recession and reduced capacity on longhaul flights. Aer Lingus today announced a strategy to drive its future growth and said it will focus on managing costs and revenue. It will expand into currently un-served short-haul markets, partly with the help of a new franchise arrangement with Aer Arann to be known as Aer Lingus Regional. It also wants to improve its long-haul connectivity into Asia, by improving its partner network and alliances with other airline groups.
Joe Gill, head of research at Bloxham Stockbrokers, says today's statements are evidence that the restructuring programme Aer Lingus has been negotiating over the past few months is starting to yield benefits. He says the airline will try and difference themselves from other airlines by offering various options for passengers, such as seat selection and Gold Circle membership. He says there is also a reference in the statement which refers to trying to form connections in other parts of the world, including Asia. Mr Gill says this means that the airline is getting close to joining some of the alliances like Starline, based around Lufthansa in Frankfurt and OneWorld Alliance based around BA in London Heathrow. He says that while it will cost the airline to rejoin an alliance, it is a two way street and it is an attraction to have a feeder from Ireland into one of the Frankfurt or Heathrow hubs.
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IRELAND EXPERIENCING TRUST CRISIS - A new report shows that Irish people have the lowest level of trust in business and politics of 22 countries surveyed for the Edelman Trust Barometrer. Over the year Ireland was the only country surveyed that showed declines in trust across business, government, the media and NGOs. The survey authors say Ireland is experiencing a 'profound and continuing' trust crisis.
Mark Cahalane, Edelman's managing director, says that Irish scepticism is deep rooted and pervasive. He says that while other countries are beginning to see increasing levels of institutional trust as their economies creep out of recession, people here have lost confidence in more institutions than ever before.
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MORNING BRIEFS - DSG Retail, which runs the Currys and PC World shops, says its creating 100 jobs by opening new shops this year. Its new shops will house the Currys and PC World brands under the one roof.
*** Japanese pharmaceutical equipment company Freund Corporation is setting up a European base in Tullamore, Co Offaly, creating 25 jobs over five years with IDA support. The jobs are in drug delivery development, clinical trial manufacturing, and the marketing and sales of pharmaceutical equipment.
*** Apple has reported much better than expected results for the three months to the end of December due to record sales of iPhones and Mac computers. Apple said it shipped 8.7 million iPhones in the three months, just short of the Wall Street target of roughly nine million but double the number shipped in the same period a year earlier. Mac sales rose 33% from a year earlier and iPod sales fell 8%.
*** Eircom has agreed to slash the monthly charge to its competitors for supplying broadband over its lines. The monthly charge to other operators using Eircom's lines will drop from €8.41 cent a line to 77 cent. The move has been welcomed by BT, whose Peter Evans said the price drop is 'critical' and brings wholesale prices down to levels seen in the rest of Europe, building a foundation for next generation broadband services.
*** On the currency markets, the euro is trading at $1.4081 cents and 86.86 pence sterling.
