International Airlines Group (IAG) is forcing subsidiary Aer Lingus to shrink due to lack of profitability… even though the airline recently reported its second-best financial results in history, and the margins are among the best in the industry. Is this just a logical way to maximize ROI, or is this pure greed?
I first wrote about how these changes were rumored several weeks back, and they’re now official. Aer Lingus will be cutting three transatlantic routes in the coming months, and up to 500 people are expected to lose their jobs.
The airline group has set a medium-term operating margin target of 12-15% for all of its subsidiary airlines. Achieving that benchmark is considered mandatory for the parent company to continue fleet investment and network support. I think it’s important to emphasize just how good those margins are. Delta is known for being extremely profitable, but the airline had a margin of under 10% last year.
A great solo travel tip spotted this week on One Mile at a Time.
