The US Department of Transport has tentatively approved the Aer Lingus application to join the British Airways and American Airlines transatlantic joint venture. Iberia and Finnair are also part of the agreement.
A fourteen day window is now open for responses, after which a formal approval is likely to be granted. Approval by the European Commission is expected to follow shortly.
This means that all five airlines will be able to co-ordinate scheduling and pricing on flights between Europe and the US.
In such a joint venture, all revenues are pooled and re-distributed based on an internally agreed formula. When you buy a flight to New York on British Airways, part of your fare goes to Iberia, American Airlines, Finnair and now Aer Lingus.
According to the US DOT, Aer Lingus currently has a 44% market share of flights between Ireland and the US. The joint venture will now have a 60% share as the American Airlines services to Ireland will be included.
There is, however, strong competition (given the size of the domestic Irish market) from other carriers. This is expected to increase now that the new generation of single aisle aircraft have the range to fly from Ireland to the US East Coast.
This is good news for those of us in the UK. As part of the joint venture, transatlantic Aer Lingus flights will now give full Avios and tier points even if other Aer Lingus flights do not. Aer Lingus flights previously did not earn British Airways Executive Club tier points so this is a big improvement.
Will Aer Lingus launch Manchester services?
The approval of the joint venture makes the rumours that Aer Lingus will launch US flights from a UK regional airport more likely.
In September, the Irish Times reported that six UK airports including Manchester and Edinburgh had submitted bids for the flights, which would likely use Airbus A321 Long Range aircraft. These aircraft can fly non-stop between Ireland, the UK and the Eastern seaboard of the United States and feature 16 fully flat business class seats.
It seems that Manchester has won the deal with Aer Lingus applying for 1,500 take-off and landing slots for the April to October season. The request covers 3 x A321LR aircraft (single aisle) and one two-aisle A330, which would be enough to cover four US routes. The A330 can reach the US West Coast whilst the A321LR can only reach the East Coast.
This would put Aer Lingus in direct competition with Virgin Atlantic at a time when Virgin was hoping for a clear run following the demise of Thomas Cook.
Aer Lingus never intended to launch routes from the UK. However, coronavirus has meant that it now has a large fleet of new aircraft with little sign of enough domestic demand to fill them.
Whilst the BA/AA transatlantic joint venture was due for renewal this year, an extension has been granted until 2024 due to disruption caused by the pandemic. The 2024 review will now have to also consider whether the addition of Aer Lingus has reduced competition even further.
It will still take some time for the new joint venture agreement to come into effect, so don’t expect to be earning BA tier points from Aer Lingus transatlantic flights until well into 2021.