Aer Lingus, hurting, stops all service to BWI

Irish air carrier started flying here just one year ago

September 20, 2001|By Dan Thanh Dang | Dan Thanh Dang,SUN STAFF

In the first tangible effect of the airline industry's financial woes to hit Maryland, Aer Lingus has cut all service to Baltimore-Washington International Airport - barely a year after launching its inaugural flight.

The Irish air carrier was already suffering from heavy financial losses, fewer passengers and a leadership vacuum, and last week's terrorist attacks worsened its economic problems, officials said yesterday.

The crisis led the company to announce Monday that it will cut up to 1,500 jobs and a quarter of its operations, including the termination of its daily flights out of BWI. Aer Lingus also will cut service to Newark, N.J., and Stockholm, Sweden, and reduce service on other European routes.

For BWI, it means four full-time employees of Aer Lingus will be moved to other locations. About 20 to 24 employees from Signature Flight Support, a contractor hired by Aer Lingus to serve as ground staff at BWI, also will be affected. The carrier will retain its core trans-Atlantic service to New York, Boston, Chicago and Los Angeles.

"The company has literally been battered by so many different things," said Jack Foley, executive vice president of Aer Lingus. "We had to make some urgent decisions. We have to steady this ship quickly. But once we get through this very critical, short-term period, our intention is to relook at our entire U.S. strategy, including Baltimore.

"Regrettably, it has very little to do with the local support and business that we got from Baltimore. It's just that we have to steady the financial situation within the company. We were forced to eliminate high-cost areas, including aircraft leases. With fewer aircraft and Baltimore being a new route, it never had the chance to mature."

When Aer Lingus began its new service at BWI on Sept. 6, 2000, state officials flew on the airline's first flight to Ireland with high hopes that it and Ghana Airways would help bring BWI out of the shadow of Washington's Dulles International Airport as a hub for overseas travel.

By April, Aer Lingus had increased its BWI flights to seven days a week from just three flights a week.

But hopes began to falter when both Ghana Airways and Aer Lingus began experiencing financial and management problems.

Foley said Aer Lingus was hurt by labor problems last winter and spring, including a strike that shut the airline for six days. The outbreak of foot-and-mouth disease in early spring and summer caused tourism to slow.

The situation was in stark contrast to that of more than a year ago, when Aer Lingus officials were planning to take the national carrier public in hopes of generating cash to fund expansion, including in the United States.

Then the economic slowdown and the loss of three top executives, Foley said, caused "the financial environment within Aer Lingus to deteriorate very rapidly."

"The events last week just literally exacerbated the situation," Foley added.

But BWI will weather the current crisis, Secretary of the Maryland Department of Transportation John D. Porcari said yesterday.

"We've been aware for some time that the airline industry, in general, is in a fairly severe cyclical downturn," Porcari said. "And we were aware that a number of airlines were facing financial problems. We've worked very hard to build our international business, and we're going to work very hard to bring Aer Lingus back to BWI.

"BWI is still located in one of America's most desirable business and tourism destinations, and this area has the highest per capita income. As the economy changes, we fully expect to restore much of the service."

As of yesterday, Porcari said, he was not aware of any other airlines cutting service to BWI.

But airline analysts say Aer Lingus could be the first of many as other major air carriers announced large layoffs yesterday.

"This is just the beginning," said David S. Stempler, president of Washington-based Air Travelers Association, which represents passengers.

"Airlines will start removing their least profitable flights from the bottom up. That means passengers will have less choices and it'll cost more to fly."

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