Annual Report 1999 in PDF - Aer Lingus

warning of lower profits. Those early signs have contributed to a number of major airlinessuffering profit setbacks as yields continued to fall and increases in fuel prices impacted onoperating costs.Aer Lingus, however, operates in the European and transatlantic markets where economicgrowth has continued. During 1999, the airline also benefited from the performance ofsterling. However, the strength of the dollar and, in particular, the significant increase in fuelprices have impacted negatively on costs.The aviation industry as a whole has continued to grow, with increased prosperity andinternational business stimulating demand for air transport, in both the full service and the nofrills sectors. Demands of consumers of full service airlines have never been greater. Comfort,flight frequency, punctuality, reliability and service are just some of the distinguishingcharacteristics that our customers have come to expect as “a given” from Aer Lingus.We have put in place a programme to deliver, on a consistent basis, those characteristics whichrepresent value for our customers. That programme has increased further our service levels andI am confident that Aer Lingus will continue to develop its position as a quality service provider.There are, however, issues which impact on our ability to deliver these standards. With therapid growth in passenger traffic, it is inevitable that airports throughout our network need toupgrade and expand their facilities. In some instances, this necessary work may lead to atemporary deterioration in some service levels for our customers while the work is being carriedout. Although we are not responsible for the disruption arising from the refurbishment work,I want to assure our customers that we regret the inconvenience to them and that we arestriving to work with the relevant authorities to minimise the disruption.Increased traffic can also lead to greater congestion in the skies over Europe and consequentair traffic control delays. Delivering a first class punctuality performance for our customers is akey objective for Aer Lingus and we invest heavily in pursuit of this objective. As a member ofthe Association of European Airlines (AEA), we are also involved in an international industrylobby to bring about an improved infrastructure to address the congestion issue.Our future lies in continuing to provide services to destinations to which people wish to travelor send goods. This involves continued selective expansion of our own route network anddevelopment of new destinations in alliance with other high quality, full service airlines.We opened new routes to Los Angeles and London City in 1999, followed by London Gatwick,Munich, Stockholm and, most recently, Baltimore / Washington, in the current year.We also formed two strong bilateral alliance agreements with American Airlines and BritishAirways. These relationships paved the way for Aer Lingus to become a partner in theoneworld alliance of international airlines, comprising American Airlines, British Airways,Cathay Pacific, Qantas, Finnair, Iberia and Lan Chile. These strategic alliances provide for mutualco-operation and are significantly more extensive than traditional alliance agreements. Theyinvolve co-operation between the alliance partners in such areas as scheduling, new services,connecting traffic, code-sharing and worldwide marketing. Most importantly of all they bringmajor customer benefits including “seamless travel” initiatives and reciprocity of frequent flyerprogrammes, airport lounge access and passenger support worldwide.3