AER LINGUS:The Aer Lingus chief executive has turned things around in uniquely difficult circumstances, writes CIARÁN HANCOCK

IT’S NOT easy being the chief executive of Aer Lingus – just ask Michael Foley or Dermot Mannion – but German Christoph Mueller seems to be making a decent fist of the role in uniquely challenging circumstances.

He has largely negotiated a tricky cost reduction plan with staff, stemmed the bleed from its long-haul flights to the US and rebuilt the airline’s cash balances.

This is all against a backdrop of the worst economic crisis to hit this country in living memory.

He has even managed to cut transatlantic flights from Shannon to New York for the first three months of next year without it raising blue murder with the vocal west of Ireland lobby.

All of these are key elements to the future survival and independence of Aer Lingus.

Like it or not, Mueller has stopped trying to put bums on seats at any cost. The airline has axed loss-making routes and is no longer engaged in deeply discounting fares just to compete for market share with the likes of Ryanair.

In fact, Aer Lingus has been helped by the withdrawal or curtailment of services out of Ireland by its rivals, including Ryanair, and it has given up on operating bases abroad, focusing now entirely on the Irish market.

While passenger traffic is down, the price of the average fare has increased and the balance between demand and supply is now favouring the airline.

On the staff side, Mueller must still get a deal over the line with disgruntled cabin crew, who have so far resisted the rostering changes proposed.

The mood music yesterday suggested a resolution could be in sight.

Its gross cash balances have been restored to more than €1 billion once again, giving the airline a cushion for any turbulence that it might face in near term.

This is not to be underestimated. The volcanic ash crisis has wiped €10 million off its bottom line. Who would have predicted that at the start of this year? Or the cancellations last winter due to the severe weather? Or, for that matter, the spectacular collapse in the Irish economy, which has decimated demand?

Mueller highlighted how European air travel had rebounded this year, with the exception of Ireland and Britain. He is not deaf to talk of a double- dip recession and warned that the airline could not be complacent about its costs.

Having recorded a profit in the second quarter, Mueller will be anxious that staff do not view this as a return to business as usual and look at ways of dipping into its pot of cash.

Aer Lingus appears to be heading in the right direction. With the economy yet to turn, though, Mueller might yet have to negotiate more turbulence.