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United partnership to strengthen as Ryanair bid fails
Aer Lingus and United Airlines are increasing their transatlantic route partnership as part of plans to develop a full blown joint venture.
The news comes the same day rival Ryanair conceded defeat in its €748m takeover attempt, offering hope to Aer Lingus shareholders whose share value fell 20% as a result.
Aer Lingus and United hope to capitalise on the US-EU Open Skies agreement, with a "broader and deeper joint" relationship on the cards should new routes prove lucrative.
Dermot Mannion, Aer Lingus' chief executive, said: "We are very excited by the potential of the Partnership and believe that the unique combination of two leading transatlantic airlines can drive significant value for the shareholders of both companies."
A new long haul transatlantic service between Washington Dulles and Madrid, available for sale from April 2009, will commence daily from March 2010.
Both airlines said existing code shares between Ireland and the US launched in October had proved successful.
"Today's announcement is the culmination of extensive discussions between the Partners since 2007," said Mr Mannion.
"Aer Lingus has been providing long haul services for over 50 years and was the first airline to commence new transatlantic services under Open Skies.
"This Partnership builds on this proud history and will enable Aer Lingus to maximize the opportunities provided by Open Skies. "
Glenn Tilton, United Airlines' chairman, president and ceo, said: "Our expanded agreement takes advantage of new opportunities under the US-EU Open Skies Agreement, benefiting our customers with additional competition and capacity in these markets.
"This partnership provides for a deeper commercial relationship with Aer Lingus, and capitalizes on the unique strengths of both our companies."
Further routes may commence in summer 2011, with new tickets sales anticipated during 2010.
Although both carriers will share the commercial and operating benefits and risk, Aer Lingus will shoulder the operations while United manages revenue generation.
The route structure will be operated and sold under both Aer Lingus and United codes.
Aer Lingus' share value slumped from €1.50 to under €1.10 after the Irish government, a 25% stakeholder in the airline, dismissed Ryanair's cash offer yesterday (January 22).
The government said the undervalued merger would be bad for Irish competition, signaling the end for Ryanair's takeover hopes.