Etihad expands in Dublin; Patrick Honohan on the differences between economists and regulators; Bunworth bids farewell

Etihad expansion

WHILE MOST airlines are cutting back their activities at Dublin airport, Abu Dhabi-based Etihad continues to expand.

Its Irish-born chief people and performance officer Ray Gammell was in town this week for the launch of a line maintenance facility at Dublin airport, which will employ three engineers and two technicians.

While small in terms of numbers, it’s a significant move by Etihad, marking just its fifth such facility outside Abu Dhabi.

Initially it will handle Etihad’s own A330-200 aircraft, but it plans to offer the maintenance service to other airlines over time.

Etihad has gradually been building its presence here. In March, it increased the number of flights it operates from Dublin to 10 a week for the summer season.

Gammell says this schedule would be maintained during the winter. “The route is going well for us,” he said over a coffee in the Morrison Hotel this week. “Our loads are consistently 80 per cent upwards.”

Since launching the Dublin- Abu Dhabi route in July 2007, Etihad has carried 380,000 passengers. About 70 per cent of this traffic is using Abu Dhabi as a hub to transit on to Asia and Australia.

The Greystones native declined to comment though on whether the Dublin route makes a profit. “We focus on filling the aircraft,” he said.

In August, Etihad plans another roadshow here to interview for cabin crew for its global network. It plans to add 10 new aircraft to its fleet over the next 18 months, and needs to recruit 750 staff worldwide.

Early next year, Etihad will open a premium lounge at the new Terminal 2 in Dublin airport, following a €1 million investment.

It has also been approached to sponsor the Farmleigh Fellowship, which is aimed at building links between Ireland and Asia.

“Each of these investments is a signal of our support for Ireland,” Gammell says.

Crisis, contrarians and cultural differences

ECONOMISTS AND regulators do not see eye to eye. The recent reports into the causes of the banking crisis touched on this briefly in trying to understand how our banking system hit meltdown.

The author of one of those reports, Patrick Honohan, the governor of the Central Bank, spoke of a difference in the culture before the Oireachtas finance committee earlier this week. Honohan said that in the field of bank regulation, people talked about two cultures and “they are not science and arts”, they are regulation and macroeconomics and “their practitioners do not talk the same language”, he said.

“When I worked in the World Bank on teams comprising a dozen regulators and economists, the task was to get them to understand one another,” he said. “If we went out for a meal, the economists would sit at one end of the table and the regulators at the other.”

Honohan also addressed the subject of contrarians, referring to UCD economist Morgan Kelly and how the Central Bank had failed to heed his warnings.

Kelly was “an interesting character” and “well respected in the very technical economics field”, but he moved away from his normal field and started to write about property booms.

Honohan said regulators should always pay attention to contrarians “with coherent but not necessarily right views”. Contrarians were “nearly always wrong”, he added, but “it is the ‘nearly’ that matters”.

“Listen to them and filter the information and say whether there is something in it.”

The good governor clearly has some time for Kelly, who was somewhat ridiculed by the good- time Charlies for his protestations late on during the boom years.

“Did he just get lucky?” Honohan asked. “Maybe, but he was well known and a clever guy and more attention should have been paid to him.”

Bunworth takes his leave from Bord Gáis Energy

AFTER A career that spanned more than four decades and included senior roles with Aer Lingus, Gresham Hotels, Bewley’s, Denis O’Brien’s Esat Telecom and Sterling Health, David Bunworth has decided to retire as managing director of Bord Gáis Energy at the end of this year.

“When I joined I planned to stay for three years, but that was almost five years ago,” he told me this week.

Bunworth turns 60 in July, and is looking forward to taking “life at my own pace”.

He is chairman of the Gate Theatre, and plans to add some more non-executive directorships.

And the highlight of his time with Bord Gáis? “It has to be the Big Switch and getting to the stage of doing the most extensive switching campaign in the world in terms of utilities,” he says.

This is a reference to Bord Gáis’s entry into the residential electricity market here. It poached 320,000 ESB customers in the first year and now has “north of 400,000”, giving it a market share of about 22 per cent.

“I [also] enjoyed my years in Aer Lingus a huge amount,” he says. Bunworth was behind the much-mocked wavy shamrock at Aer Lingus in the mid-1990s.

“In pharma, I helped to put Solpadeine and Panadol right up there. I’ve had a good and varied career.”

Musgrave keen to expand in Spain

MUSGRAVE IS well known in Ireland and Britain, but chief executive Chris Martin says it is also keen to expand its footprint in Spain.

Musgrave has 85 stores in Valencia and Murcia – 23 Super Valu and 62 Dialprix – and is in the process of selling these to independent retailers to replicate its franchise model here.

“About half of them have transferred over,” Martin told me.

Spain has been hammered by the recession and price deflation. Musgrave’s sales declined by 3 per cent to €190 million last year.

Given that Musgrave has 3,300 stores in Ireland and Britain and overall group sales of €4.5 billion, is Spain worth the hassle?

“Yes it is,” he said. “We bought the business in 1994 and we’re really investing in it now.

“We have a business that very’s much focused on tourism, which has been a tough market indeed. In the neighbourhoods, we have Dialprix and Super Valu and they are performing well.

“Sales were down 3 per cent, but that was a pretty good performance in what has been a tough market. That gives us a signal that there are good opportunities there.”

LITTLE THINGS

DUBLIN-BASED offsite data and document storage company Oasis Group has made three acquisitions of late, comprising an investment of £10 million sterling (€11.97 million).

The company began its spending spree by acquiring specialist records management company Kings Inn in Dublin.

It added File Store’s Northern Ireland business last month, and this week Oasis signed a heads of agreement to buy out Essex-based ORM. The latter business was set up in 2006, and Oasis first invested two years ago as ORM was given the account of a large client based in the south of England. Oasis has acquired the shares in ORM that it did not already own.

It will operate alongside Oasis’s existing business in Reading.

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Another transaction that slipped under the radar this week was the merger of Dublin-based Distinct Consulting with Australian group WDScott in a cash and share deal. David Power (right), currently managing director of Distinct, will become chief executive of WDScott Europe and US. The merged business will have a turnover of €20 million, with 175 staff, and it will service a client base of 30 organisations.

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On the PR front, Drury Communications has netted some new clients of late. The Clonskeagh-based agency, which acts for the embattled State-owned Anglo Irish Bank, recently won mandates from insurer RSA, Eirgrid and Inter Trade Ireland.

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Finally, in what might be viewed as a sign of the times, I hear that Blackrock College’s recent sports day featured a prize of one year’s free fees for the exclusive south Dublin secondary school. With fees ranging from more than €6,000 for day pupils and more than €16,000 for boarders, competition must have been fierce for a place among the city’s elite students.