Aer Lingus has so far remained silent on the dispute that is threatening to disrupt Aer Arann services over four days next week, but it could be just a matter of time before the bigger airline is drawn into the row.
Aer Arann operates its larger partner's regional services, a network that includes flights to and from various centres around Ireland and Britain. This is a key part of Aer Lingus's new long-haul strategy.
Aer Arann’s regional flights from Britain feed into terminal two in Dublin, where travellers can connect on to Aer Lingus transatlantic services, on which the airline has placed a renewed focus.
The attraction the airline is selling is that if you are flying from Edinburgh or Manchester to the US for example, you can by-pass the hassle of Heathrow by going to Dublin, where you can also get immigration clearance.
The plan looks relatively sound – it makes as much sense to fly from many regional hubs in Britain to Dublin as it does to London, and transferring on is probably comparatively more seamless. Aer Lingus recently estimated that 15 to 20 per cent of fliers on these routes would connect on this year and a higher proportion are targeted to do so in 2014.
The only problem is that this strategy is now facing a major setback as it gets off the ground.
Heathrow might be a headache, but it is even more of a headache if someone flying from Edinburgh to New York has to rebook their entire journey at the last minute because of a strike at an obscure Irish airline over which it appears the company which sold them their original ticket has no control.
The damage a few cancelled flights could do to Aer Lingus’s reputation is considerable. Given that it is the party that is likely to suffer most, it would be a surprise if it were to remain on the sidelines.
Some resolution may be found by next week, as is often the case in these disputes, but that is still quite a big gamble.
Microsoft takes another tablet hit
Microsoft's plans to unseat the Apple iPad as king of the tablet world seems to be coming unstuck. Hot on the heels of Samsung halting sales of its Ativ Windows RT tablet in parts of Europe and cancelling any plans for a US launch, Asus has also thrown a spanner in the works for the tablets powered by ARM chips.
According to an interview in the Wall Street Journal, Asus has no plans to produce any more devices running the Windows RT operating system, the mobile version of Windows 8, its chief executive Jerry Shen said. Instead, it will move its focus to tablets powered by Intel’s x86 chips, which is good news for that particular tech firm.
Asus and Samsung are not the only tech firms to pass on Windows RT. HTC is also said to have ditched its plans for a Windows RT-powered device and, if rumour is correct, Nokia isn’t even considering RT for its as yet unconfirmed tablet. Lenovo and HP have also opted not to produce tablets in the future for RT, concentrating instead on the full version of Windows 8.
Chief executive Steve Ballmer must be in a bit of a sweat right now. Microsoft has already taken a serious hit on the tablets, discounting them by 30 per cent in July and giving itself a $900 million charge on its balance sheet into the bargain.
The Windows RT tablet was always going to have a mammoth task ahead of it. Months behind the competition, Microsoft’s main difficulty was convincing users to switch from a platform that essentially created the market, to an emerging one that had fewer apps to tempt users. The ARM-powered tablets were intended to be the solution to a competitive market that needed a lower cost Windows 8 tablet and demanded better battery life. How- ever the Surface Pro and other Windows 8 tablets appear to have overtaken any potential demand for the devices.
With Intel intent on conquering the mo- bile market with lower-powered, lower- cost chips, the argument for the RT seems to be fast disappearing. Despite this, it seems Microsoft still believes in the platform and is pressing ahead with RT- related plans. Nvidia last week confirmed that it is working with the tech giant on a second generation of the Surface RT, indicating that Ballmer & Co haven’t quite given up on the hope that the RT system will deliver for Microsoft.
The question has to be asked though: is Microsoft prolonging the inevitable?
Hard to be optimistic about Amarin
It's difficult to be upbeat about Amarin these days. The figures for the second quarter do show that it is getting some traction, with sales of $5.5 million in the second quarter – its first full reporting period on the market – after bringing in $2.3 million in the first three months of the year. But at what price?
The cost of having to hire its own 275-strong sales team cost the company over $48 million in the first half of the year. Overall, the company lost more than $100 million in the period, $39.8 million of it in the second quarter. And, in any case, those sales missed estimates on the low side by about 10 per cent. Put simply, sales would need to be trending significantly higher for investors to be confident that Amarin can deliver on its own. And, for all its focus on incremental patent protection, the fact remains that it has failed to convince the regulator, the Food and Drug Administration that its Vascepa product – a highly refined Omega-3 fish oil that reduces high levels of blood fats called triglycerides that can lead to heart disease without the adverse side effects evident in the rival therapy on the market – should be granted New Chemical Entity (NCE) status. Amarin may have the heads up on GlaxoSmithKline’s Lovaza in efficacy, but Lovaza already has the market and persuading clinicians, generally GPs, to change could be more difficult than the clinical data might suggest. Sales may be rising but there was no dramatic launch number and investors would have been more reassured with higher trend lines – especially as most had bet their money on a takeover of Amarin or a licensing tie-up with one of the pharma giants pre-launch.A recent scare about Omega-3 and prostrate cancer won’t have helped.
Given its other issues, the reduced period of exclusivity in the absence of NCE designation inevitably undermine confidence in the drug’s prospects as a blockbuster. The company raised $121 million last month at prices even chief executive Joe Zakrzewski admitted were not attractive. For now, his stated emphasis is to reassure the market it has the funds to keep going as it seeks the break it needs – possibly from the Anchor trial that would dramatically expand its market.
Given its run of luck to date, you wouldn’t bet on it.