Aer Lingus 2010 Annual Report Download - page 5

Annual Report 2010
3
Chairman’s statement Aer Lingus Group Plc
current deposit rates), thus increasing Aer
Lingus’ liability to pay profi t share out of
future profi ts.
The once-off €25.3 million payment made by
Aer Lingus to the ESOT to extinguish all future
profi t share liabilities is less than the expected
total future profi t share payments and other
associated costs had the profi t share
arrangements continued in place. The profi t
share arrangement represented an open ended
liability for the Group. After receipt of
independent fi nancial advice, the Board
concluded that payment of €25.3 million in
late 2010 was in the Group’s and shareholders’
best interests. We also expect that the
addition of these shares to the Group’s free
fl oat should contribute to better liquidity in
the Aer Lingus share over time.
The presence of Ryanair on our shareholder
register continues to be damaging to the
interests of the Group and its shareholders.
Ryanair is our most signifi cant competitor and
its presence as a major shareholder continues
to inhibit our ability to run the Group in the
best interests of all our shareholders. It is also
detrimental to the public interest.
As a result, Aer Lingus welcomes the
investigation initiated by the UK Offi ce of Fair
Trading into Ryanair’s shareholding under the
UK’s merger control legislation. Aer Lingus will
continue to cooperate in full with the OFT in
its ongoing investigation.
Board
I would like to express my gratitude to all
members of the Board for their support,
commitment and hard work during the last
year as along with management we took the
diffi cult steps needed to address the
challenges facing the Group. Their support and
infl uence has been superb.
In December 2010, Ivor Fitzpatrick retired
from the Board. Ivor had been a Board member
since 2002 and was heavily involved in many
of the Group’s important milestones, including
its fi nancial recovery from the events of 9/11
and the successful IPO in 2006. In addition,
Ivor had recently served as chairperson of the
Audit Committee. I would like to acknowledge
and thank Ivor for his signifi cant contributions
to Aer Lingus.
Aer Lingus is committed to corporate best
practice and believes in the introduction of
fresh perspectives to the Board. In this regard,
Mella Frewen’s agreement to join the Board as
an independent, non-executive director ticks
many boxes. Mella, who has been based in
Brussels and involved with European Union
institutions for many years, brings knowledge
and experience that will be very important as
we face new regulations and other EU related
challenges over the coming years.
Andrew Macfarlane was appointed as Chief
Financial Offi cer on a permanent basis in
October 2010 and joined the Board as an
executive director. Since joining the Group in
December 2009, Andrew has made a signifi cant
impact in addressing the key fi nancial
challenges faced by Aer Lingus and will
continue to provide critical input towards
building the future success of the Group.
75th Birthday and Beyond
Aer Lingus will celebrate its 75th birthday in
May 2011. Starting with a full restoration of
Aer Lingus’ fi rst aircraft, the Iolar, by a group
of volunteers, our people plan to celebrate this
milestone in style.
In its fi rst 75 years, Aer Lingus has made a
huge contribution to Irish life, connecting our
island to the rest of the world and providing
opportunities for Irish people to open new
horizons commercially and recreationally. In
particular, during the dark economic years in
Ireland, Aer Lingus maintained international
connectivity and gave Irish people an outlet
to experience the rest of the world. The
activities of Aer Lingus and its people in
advising and running airlines, particularly in
developing regions, is still recognised and
admired throughout the global aviation
industry.
Personally, I have had the good fortune of
being involved with Aer Lingus for well over
half its lifespan, having joined the Group as a
fresh graduate in 1968 and maintaining my
connection throughout the last 43 years as an
employee, a very frequent customer and now
as a Board member. My reasons for joining Aer
Lingus those many years ago were because the
Group was then one of the few Irish companies
that had an international perspective and
which gave Irish people an opportunity to
engage in international business while living
in Ireland. My business life since then has
been hugely infl uenced by Aer Lingus’
initiative in forming one of the world’s fi rst
major aircraft leasing companies with one off
its most successful alumni, the late Tony Ryan.
It is a fi tting memorial to this initiative that
today the majority of the world’s aircraft
leasing companies are headquartered in
Ireland. I know that there are many other Aer
Lingus alumni who have had similar and
positive life experiences arising from their
association with the Group.
There is much to be proud of when we look
back. The Aer Lingus tradition of superior
service, operational excellence and the best
Irish hospitality is one of which we can all
feel proud. The success of Aer Lingus and the
appeal of its brand are due to many people,
particularly those current and past employees
who have shown huge loyalty to the Group
over many years. They are due great credit.
As a listed entity, our role and objectives have
changed in recent years, but our strengths and
core values remain the same. We will continue
to strive to provide an attractive and
affordable range of products for our customers,
a stable and vibrant working environment for
our employees and an attractive investment
proposition for our shareholders. Our ability to
do this will be enhanced by the loyalty of our
staff, our successful business model, our
modern and effi cient Airbus fl eet and one of
the strongest airline balance sheets in Europe.
I believe that Aer Lingus has a bright and
successful future. The Group’s proud heritage
as Ireland’s airline along with the continual
pursuit of commercial innovations and
improved effi ciencies will be the foundations
of this success. I expect that over time these
factors will converge to the benefi t of all our
signifi cant stakeholders – our customers, our
employees and our shareholders.
Sincerely,
Colm Barrington
Chairman
25 March 2011