Could Aer Lingus really go bust?

It is hard to know just how close to the edge Government Covid-19 travel restrictions are pushing Aer Lingus. Irish Airline Pilots' Association president Evan Cullen warned the Oireachtas Special Committee on Covid-19 Response on Friday it was not sustainable for the carrier to continue burning €1.5 million a day with little revenue being generated.

Cullen noted such a rate of cash burn is not sustainable for any business. These were common sense points. Nevertheless, Aer Lingus is part of International Consolidated Airlines’ Group (IAG), which, industry analysts calculated earlier this year, had enough resources to see itself through a prolonged grounding of its operations.

However, Cullen noted that IAG's bigger carriers, British Airways and Spain's Iberia, were getting substantial aid from their respective governments, something that Aer Lingus is not getting, at least outside of wage subsidies, thus leaving the Irish carrier more at risk.

Travel restrictions

His bottom line was that if the Republic wanted to stick with tough travel restrictions, it would also have to provide aid to airlines to ensure that an aviation industry remained at the end of all this.

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You could argue that Cullen warned about Aer Lingus’s future simply to make a point: that the airline, and Irish aviation generally, on which 140,000 jobs depend, cannot be left forever in a limbo where trade is restricted but there is no support.

Cullen repeated this, and the fact that the Republic’s approach to travel makes it an outlier in the EU, enough times to demonstrate he feared that politicians do not have any sense of urgency about the industry’s situation.

That fear certainly seems justified. TDs and Senators seem unwilling to tackle the Government’s stance on travel head-on. This is despite the new coalition failing to clearly explain why it is sticking with restrictions such as the 14-day quarantine for incoming passengers.

Elected representatives are meant to hold the Government to account. That is not happening with the policy on air travel, despite its economic importance. Instead, most TDs and Senators seem happy to go along with the situation. This political consensus could yet end up strangling aviation.