The purpose of the meeting is for the joint committee-----
Recent Issues Concerning Aer Lingus Flight Booking and Check-in Services: Discussion
(Interruptions).
Sitting suspended at 1.36 p.m. and resumed at 1.41 p.m.
I apologise to our witnesses for the delay in starting our proceedings. We are having some technical difficulties. The purpose of today's meeting is to discuss issues concerning Aer Lingus's flight booking and check-in services and IT systems. We are joined by representatives of Aer Lingus, including Ms Lynne Embleton, CEO, Mr. Donal Moriarty, chief corporate affairs officer, Mr. Peter O'Neill, chief operations officer, and Ms Suzanne Carberry, chief customer officer.
Witnesses are reminded of the long-standing parliamentary practice to the effect that they should not criticise or make charges against any person or entity by name or in such a way as to make him, her or it identifiable or otherwise engage in speech that might be regarded as damaging to the good name of the person or entity. If their statements are potentially defamatory in relation to any person or entity, they will be directed to discontinue their remarks and it is imperative that they comply with any such direction.
Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official, either by name or in such a way as to make him or her identifiable. Members are also reminded of the constitutional requirement that they must be physically present within the confines of the Leinster House complex in order to participate in public meetings. Reluctantly, I will not permit them to take part where they are not adhering to this constitutional requirement. Given the technical difficulties we are having today, we have to ask committee members to attend this meeting in person today. I am sorry for any inconvenience caused. Any member who attempts to participate from outside the precincts will be asked to leave the meeting. In this regard, I ask any members participating via MS Teams to confirm that they are on the grounds of Leinster House campus prior to making a contribution. Obviously that does not apply currently because MS Teams has been disabled to enable the meeting to proceed but if the remote system comes back, members must confirm that they are within the precincts of Leinster House. If attending in the committee room, members are asked to exercise personal responsibility to protect themselves and others from the risk of contracting Covid-19.
As you can see Ms Embleton, we have had our own IT failures today but hopefully they are temporary in nature. In that spirit, I ask you to make your opening statement on behalf of Aer Lingus.
Ms Lynne Embleton
I thank the committee for the invitation to attend this meeting to give the committee an update on what happened on 10 September when we had a systems outage that significantly impacted Aer Lingus operational and customer systems. It is important to state that major IT issues causing significant disruption to our customers have not been typical in Aer Lingus. This case was truly exceptional. We have had very few customer-facing IT outages over the last five years, and nothing on the scale or with the impact that was experienced on Saturday, 10 September 2022, but we did face significant issues on that date. For almost ten hours, we had no access to our core operational and customer systems. We could not check in or board customers, access mandatory flight information, access data on customer bookings or access customer contact information. This meant we had very limited ability to communicate with our customers and provide the service and information we know they needed.
What caused the issue that weekend? Aer Lingus has a contract with a leading cloud services provider to host the network and infrastructure behind our core operational and customer system. Its Internet services provider in the UK had a major failure in its network on that day. Early that Saturday morning, unrelated construction works damaged one of the fibre optic cables which provided connection to our systems. The cable was not repaired until 5.30 p.m. that day. The damage occurred just after 8 a.m. but it was not until 5.30 p.m. that our systems began to come back online. The key question we asked our supplier was what happened to the backup, which should have kicked in and supported our systems and avoided the impact that we saw. The answer to that question was that, unfortunately, a component in the backup system also failed that day. This should not have happened and was exceptional in nature. The two issues were unrelated. Our supplier has apologised for both the break in the main connection and for the failure in the backup. Both have now been fixed and measures have been put in place which should prevent an outage of this type ever happening again.
We are very conscious of the impact that this disruption had on our customers. Our people at Aer Lingus made huge efforts on the day to look after customers in what were very difficult circumstances. I apologise again to our customers and thank our staff as their efforts made a real difference in helping to reduce the impact of the outage on our customers. We increased the number of call centre agents available to support our customers. However, due to the scale of the disruption, call wait times were inevitably longer in the immediate aftermath of the outage. Hotel accommodation was offered to our customers at most airports and those who secured their own accommodation are being reimbursed accordingly. We added extra resources to rebook customers and reunite them with their bags and we have been processing applications for refunds, expenses and compensation.
Aer Lingus has sincerely apologised for the severe disruption caused. We have written directly to our customers about the system outage and its impacts and also thanked them for their patience and understanding over the course of the disruption. I hope this statement gives members of the committee context and I am happy to take questions from them.
Thank you, Ms Embleton. We will now go to members in the usual order. Members will have ten minutes initially and Deputy Lowry is first.
I will not need ten minutes.
I welcome the delegation from Aer Lingus and thank them for the written explanation they forwarded to us. Obviously when an event of this magnitude happens, questions are asked as to why and how it happened, whether it could have been avoided and what needs to be done to avoid a recurrence. What stands out about this incident is that Aer Lingus, as with all other airlines, is so reliant on technology. It needs IT for booking, boarding cards and baggage. Everything relies on technology. When I read the company's explanation, the first question that sprang to mind was why an Irish-based company is reliant on a UK company for the provision of Internet and cloud technology. Do we not have the capability here in Ireland in this area? It seems to me that the Aer Lingus supplier was doubly at fault. One can excuse a system going down but for the backup system to fail at the same time is just not acceptable. One would expect that a company the size of Aer Lingus with such a reliance on technology would be insisting on a multilayered backup system to ensure this does not happen.
As it happens, I came through Dublin Airport on the afternoon of 10 September. The first thing that struck me was that the terminal was absolutely jam packed but when I went outside, I was absolutely gobsmacked to see the mass of people everywhere. They were all across the concourse and there was a queue that stretched almost as far as the Radisson Blu Hotel.
The trail of people reaching all over the perimeter of the concourse was an incredible sight. People called me and asked me what was happening. I did not know what had happened but it was obvious to me that nobody seemed to know what happened and there were stewards but they did not have any information. People had no clue what was going on. They had no idea what had gone wrong, when issues would be fixed or whether people were going to get through the airport on that day. At that stage, because of the lack of communication, people were angry and frustrated. Some people were hungry because they had been at the airport since early morning and could not get into the terminal.
In general, from what I gathered having listened to people, communications at first were at zero, then there was limited engagement and eventually Aer Lingus customers got the disturbing news through national media that all flights had been cancelled. It would nothing short of a PR disaster for Aer Lingus and costly in terms of the reputational damage that has been at home and abroad. My concern today is for the people who have been affected. The disruption of people's travel plans had enormous consequences with deadlines being missed, reunions and family occasions being spoiled, baggage going missing, and when people tried to get hotel accommodation, the city was very busy and, therefore, it was nearly impossible to get accommodation. Finally, when people went to rebook it took many days and even weeks for rebookings to be organised. The response by Aer Lingus to bookings was sluggish to say the least.
Overall, for the people involved that day, they had a nightmarish experience and it was a shambles from the perspective of Aer Lingus. How many people were affected? How many people were impacted? Why did it take so long to react to the problem? What is the estimated cost of compensatory payments? Has compensation been concluded or are there still outstanding issues to be dealt with from the perspective of the consumer?
Ms Lynne Embleton
Let me start with the questions. Mr. Moriarty will comment on the hosting of the IT services and Ms Carberry will comment on refunds.
The experience described by the Deputy about what it was like on that Saturday I recognise. There were thousands of customers impacted where we simply could not process them, we could not move them, we could not depart flights and there were thousands of customers caught up in that both outside the terminal, inside the terminal and airside as well so people who had gone through the system but then we could not depart them. The scale of disruption was phenomenal and this is why we are saying that this was a really exceptional event.
What I also recognise in what the Deputy said is the information about when the problem would be fixed and when could flights depart. We felt the same. We did not know when it was fixed. We were in constant contact with our IT provider to understand what the issue was and how quickly it could be resolved. Throughout the day we had moving updates as to when we may get the systems back up and running but until we had the systems back, we were unable to give any real certainty. What did become clear is we needed to cancel flights in the afternoon because we physically would not have been able, even if the systems came back, to get all of the day's flights up in the air in that time. It was, undoubtedly, a really difficult day for customers and, again, for our staff. It was an uncomfortable day all round.
On the questions about why this happened from an IT perspective and whether should this have happened, it should not have happened. Indeed, the contract that we have with our supplier was for this not to happen and for there to be a robust backup solution. We have two incidences of our system and two pathways to those to give us resilience so it should not have happened. As the Deputy alluded to, one was damage to a cable by a company that was operating in the area and the other was a card failure in the backup system, which was a failure that they had not seen in 4,000 instances of using that card. The two things coming together was just highly unusual.
Mr. Moriarty will comment on the IT set-up and the supply stream.
Mr. Donal Moriarty
On the location of the services in the UK, we locate our cloud data centres in accordance with best practice for the particular IT system in question so the particular IT system that supported. The recognised best practice across the industry, and it is Aer Lingus's strategy, is to migrate systems hosting to cloud data centres to improve performance, stability, security and sustainability. They are the four things that are generally improved by that.
The best practice location for the hosting of the Aer Lingus reservation system is in the UK. The expertise to cloud host this system is not currently available in Ireland so the UK is the best location. Having said that, we host many other applications and systems in cloud data centres in multiple locations, including in Ireland but just not this not this particular system. That is the rational from a best practice perspective as to why it is located in the UK. To give a greater context of industry best practice, management and protection of what are increasingly complex IT infrastructure systems and estates, they are increasingly being met by providers who have particular expertise in supporting and the maintenance of those systems. We have selected a top-tier provider to provide that service and that expertise happens to be currently located in the UK.
As the CEO mentioned, the outage was a truly exceptional set of circumstances. What happened, obviously in terms of the first line, was the fibre optic cable was broken due to construction work at a particular site in the UK and that took down the primary line. The secondary line, which is the fail-over or the backup line, also failed due to an entirely unrelated issue, which was a failure of a backup card. As the CEO mentioned, that was a truly extraordinary event for that coincidence to happen. In terms of addressing that issue, the backup card has been replaced. There is a new monitoring system in place to ensure that what happened on 10 September cannot happen again. It is extremely unlikely that an event or sequence of events as happened on 10 September can happen again. Further than that, we are now looking at introducing additional redundancy in order to protect our systems by having a tertiary system so a second fail-over or backup to provide additional security. We expect that that would never be required because we do not believe that a set of circumstances will arise again where both the primary and secondary lines would fail but we are looking to put that in place to provide that additional assurance to prevent an outage of this type every happening again.
Ms Lynne Embleton
Ms Carberry will comment on refunds and rebookings.
Ms Susanne Carberry
From a refunds and rebookings perspective, at about 9 o'clock on Saturday night, once our systems were again available, we communicated to all passengers that they had the ability to rebook their flight or apply for a refund. We also kept information available on our website under the heading frequently asked questions or FAQs that would be really easy for our customers to understand to show them which channels to go and how to make it quick. We did advise at that time that there would be long call waiting times across our call centre, which was evident across Sunday but much of that had passed by Monday morning.
As regard refunds and compensation, to date, we have received approximately 6,500 compensation applications from customers and we have successfully processed more than 91% of them as we stand today. Of course some of these passengers may still be coming so there could be more to add to that list. To the ones who are currently waiting, we have communicated with them to say that we will have all of these applications processed by the end of this month.
I thank the delegation for their direct responses. Am I correct to presume that the provider is in breach of his contract with Aer Lingus?
Mr. Donal Moriarty
We are in discussion with the provider regarding the consequences of the outage so I am sure that the Deputy will appreciate that there are constraints in what I can say about that engagement.
However, we are engaging with the provider on the consequences and impact of the outage on ourselves and our customers.
I thank Mr. Moriarty.
There is normally a backup, be it for a machine or an IT system. I find it incredible that a main service would go down and the backup service would go down as well. Was the backup service not tested to ensure that, if the main system went down, the backup was fit for purpose?
Mr. Donal Moriarty
The testing of that backup system took place, was successful and continued to be successful. The primary and secondary lines that we are referring to are being used at all times, but the primary line is used more than the secondary one.
Is Mr. Moriarty saying that the backup is placing more capacity on the second line?
Mr. Donal Moriarty
Correct. Frequent testing of the availability and robustness of the secondary line was in place, but the network card failed on the secondary line on the occasion in question.
Was that because of the extra capacity that had been placed on the line?
Mr. Donal Moriarty
It had nothing to do with the capacity on the line. It was-----
It just seems very coincidental. Is the backup service actually a backup service? There are two lines and one was operating at 100% capacity. At what capacity was the other line operating?
Mr. Donal Moriarty
I do not have the percentage.
Let us assume it was 40%.
Mr. Donal Moriarty
I am not sure that is a correct assumption.
Let us say it was operating at 20%, as it was certainly lower than 40%. Our job is to probe. Is the line a backup if it is being used as a second line, with one line having more capacity placed on it than was previously the case? Is Aer Lingus providing a second backup? This is what the layman will ask.
Ms Lynne Embleton
We share the Chairman's frustration. These are two routes to our data centres that operate independently and we should never be in a situation where both of them fail. We have gone through detailed assessments and investigations with our provider. The conclusions and facts, strange as they sound, are as presented. We have a primary system that was damaged, which is understandable, and a separate secondary system - one that should have provided full backup - where the component card failed.
Are the witnesses at liberty to say which company it has in place?
Mr. Donal Moriarty
Our primary provider is a company called Kyndryl, a spin-off of IBM. It is a top-tier and reputable provider.
Does Aer Lingus have the contract with IBM in Dublin or in the UK?
Mr. Donal Moriarty
We do not have a contract with IBM. To be clear, the contract is with Kyndryl.
Where is it based?
Mr. Donal Moriarty
It is a US-based company.
It is a US company.
Mr. Donal Moriarty
A US-headquartered company.
Why is it a US company?
Mr. Donal Moriarty
As I mentioned earlier,-----
Expertise.
Mr. Donal Moriarty
-----the expertise is-----
I have two final questions. Speaking as a layman, I would have thought that that company was in breach if both systems failed and it did not have a backup to deal with that. Are the witnesses satisfied that it has put a proper backup system in place if both of the other systems fail again?
Mr. Donal Moriarty
We are satisfied that the issue that caused the backup system to fail has been fully addressed in the replacement of the card and the monitoring of that card, such that this type of outage should not happen again. We are also considering putting a tertiary system in place to provide additional-----
Has an independent review of Kyndryl's operating system at Aer Lingus been sought?
Mr. Donal Moriarty
We are in ongoing discussions with our providers regarding the consequences and impact of the outage on us as an airline and on our customers. The Chairman will appreciate that some of those discussions are sensitive at this time.
How many people were affected?
Ms Susanne Carberry
More than 30,000 people on the day were affected, of whom 20,000 were on delayed flights. Those 20,000 still travelled, only later than planned.
That is down to 10,000.
Ms Susanne Carberry
Ten thousand of them were on cancelled flights.
Six and a half thousand have come to Aer Lingus.
Ms Susanne Carberry
No. A portion of them have come to us for refunds, but the majority of the 10,000 were accommodated on services over the next 72 hours.
How many people are still to be looked after at this moment in time?
Ms Susanne Carberry
All that remains is what is standing in our refund queue, which is approximately 1,700 people.
I have a number of questions that I will put quickly, and if the witnesses answered them quickly, I would be grateful.
This was not a problem of Aer Lingus's making and there was no data breach that we know of, but can customers be assured that, as the system was rebooted and everything returned to normality, there were no data losses or breaches? Are there GDPR breaches of which people should be aware?
Ms Lynne Embleton
None.
That is good to hear.
Deputy Lowry honed in on the fact that the system is UK-based. Aer Lingus is headquartered in Dublin, but we often get questions about where the heart of the airline and its real management lie. Are all four of the witnesses based in Dublin or are they based at Harmondsworth in London or in Madrid? Is any of the witnesses based outside Dublin?
Ms Lynne Embleton
No. The place of work for all four of us is Dublin.
Good. Is the call centre that operated throughout this fiasco based in Ireland or internationally?
Ms Susanne Carberry
It is an internationally-based call centre with agents available in Dublin.
Where is the call centre based?
Ms Susanne Carberry
We use a number of locations. They are all Aer Lingus-related. We have call centres in the Philippines, Bulgaria and across the US. We have a base here in Dublin as well.
I am glad to hear that there is a Dublin base. Aer Lingus has to outsource much of this work and not everything can happen under the same roof in Dublin, but anyone in Ireland who has ever had to phone a customer care line has appreciated it when the call centre was based locally and he or she could get into the mechanics of talking about his or her locally booked flight and so on. It would be great if more of that operation could be based on the home front. Everyone would welcome that.
We have pretty much emerged from Covid, although the Minister for Health, Deputy Stephen Donnelly, and his staff might tell us that we are still in the pandemic. Now that the aviation sector has emerged from Covid, has Aer Lingus any intention of starting to recruit more people or re-establishing its base at Shannon Airport?
Mr. Donal Moriarty
We are recruiting across the business constantly, particularly in the area of ground handling and cabin crew. We are commencing training courses in that respect. We also have various apprenticeship programmes under way and are recruiting across our maintenance and engineering, M & E, organisation.
For similar reasons that I gave the Deputy at our previous meeting, the Shannon cabin crew base will not be re-established. I believe I mentioned previously that the decision to close the cabin crew base was primarily taken so that the viability of the resumption of our Shannon operations to New York, Boston and London Heathrow could be ensured. Thankfully, that has been the case since the resumption of transatlantic services in March. Those services have operated strongly and we are pleased with them - the London Heathrow services similarly - but we will not be looking at putting our cabin crew base back in Shannon Airport.
The staffing issue was a source of tension and upset for many people. During Covid, many companies struggled to hold on to staff. Aer Lingus received a great deal of support from the Government and the taxpayer through the employment wage subsidy scheme, EWSS. The decision on who would remain on and who would have to go seemed indiscriminate in some ways. Some of those people had been with the company for a long time. The decision was for the company to determine, but I examined a number of contracts, particularly those of people who joined Aer Lingus in the late 1980s and 1990s. Their contracts never specified what bases they were assigned to, only that they were employed by the airline.
They believed it was wrong that people who had recently joined the staff cohort in Dublin were retained whereas others in Shannon who had 30 years of service, or more, had to go. If Aer Lingus is issuing new contracts, the detail needs to be clear that the employee's job is secured to the airline, not to a base. Details that emerged at the time were never in the contract in the first place.
Mr. Donal Moriarty
To clarify a couple of aspects, during Covid we had the approach of retaining the employment of as many of our colleagues as possible. In fact, fewer than 200 people left the business on voluntary severance during Covid. That is quite a small number of people. In terms of the Shannon cabin crew base specifically, the approximately 90 cabin crew who were located there were offered three choices, namely, to relocate to Dublin or to Cork or to take voluntary severance. All of their individual choices were accommodated. No one was forced to make a particular choice. There was no compulsory redundancy in Aer Lingus throughout Covid. I understand the point the Deputy is making with regard to contracts but forced or enforced redundancy did not arise in Aer Lingus during the Covid pandemic.
I worked in a cinema when I was in college and when it had to get rid of some staff, it was a case of last in, first out. It was the same in the school in which I worked before becoming a Deputy. It does not work like that in the Dáil, which is not last in, first out at all. In most work environments, however, if there are jobs to be shed, it is last in, first out. It is a real bugbear for people who work for Aer Lingus that some staff who had joined the workforce of Aer Lingus in winter of 2019 held their jobs whereas other employees at Shannon who had 25 or 30 years of service, or more, and were among the most senior in the organisation, were given the three choices outlined by Mr. Moriarty. Yes, they had a choice and there was no compulsion but there was an inherent compulsion, certainly during the Covid pandemic when people were trying to put bread on the table and pay their mortgage. There was a very tough decision to be made. I am done with that point but I hope new contracts will make clear that seniority does matter in the organisation.
How much did the Government pay under the EWSS? Does Mr. Moriarty have a total figure for that?
Mr. Donal Moriarty
I do not recall the figure. I can follow up on that point through the Chair. To be clear, we welcomed the support that Aer Lingus and all other companies in Ireland received through the TWSS and EWSS. Certainly in Aer Lingus we used it to maintain the relationship with as many employees as possible to be ready for the recovery when it came. That recovery came later than we had hoped but the support positioned us well to have the right resources in place to deliver a strong schedule and operation through 2022, and we are grateful for that.
When is the airline expected to announce its schedule for summer 2023? Is it considering new route options, particularly out of Shannon Airport, in that regard?
Mr. Donal Moriarty
That announcement usually takes place in late October or early November. We do not have a specific date for it but it will be in that timeframe. We constantly review our route network. As the Deputy will be aware, in Shannon we have services to Boston, JFK and Heathrow airports operational at the moment. We expect that to continue. We do not expect significant change to our Shannon schedule for summer 2023 but that has not yet been finally determined.
When the last Government shares in Aer Lingus were sold, there was a major fear that the Heathrow slots from Shannon would be lost. A last-minute deal was cobbled together by the Government at the time to protect that all-important landing slot for flights from Shannon into Heathrow until the end of September 2022, which was just last week. That deal has expired. Aer Lingus is still selling flights to Heathrow and filling them, and we are delighted that it is, but the agreement struck by both sides has lapsed and I do not think the Government has any basis to impose another such commitment on Aer Lingus. How much will Aer Lingus honour that going forward in terms of that all-important connection to Heathrow?
Mr. Donal Moriarty
It is not a question of honouring it. As the Deputy rightly pointed out, the arrangement has elapsed but, as I have mentioned previously, we are still selling seats on flights from Shannon-London Heathrow. The route is doing well. All our routes out of Shannon have performed well in 2022 and we expect that to continue long into the future. There is no reason it should not continue.
The Shannon Group has made a public service obligation, PSO, application to the Government for a PSO route from Shannon to Amsterdam Airport Schiphol. The application is currently being considered by the Department of Transport. It has to be adjudicated on. If it were to be approved, would Aer Lingus be up for running that route?
Mr. Donal Moriarty
We look at all opportunities. I make the point that Amsterdam Airport Schiphol is currently imposing reduced capacity on airlines from all over Europe, so there might be some challenges at the Schiphol end of that particular arrangement, but we will evaluate all opportunities, as we always do, on a fully commercial basis.
Is it the intention of the airline to make the contractor pay for the damage to the network that arose as-----
Mr. Donal Moriarty
As I stated in reply to Deputy Lowry and the Chairman, we are engaged in discussion with the contractor in respect of all the implications and consequences of the outage. I cannot say any more than that on that engagement.
I thank Mr. Moriarty. We look forward to the Aer Lingus routes for 2023 being announced.
Ms Lynne Embleton
To return to the Deputy's original question, we are recruiting. We are recruiting pilots as well and we have taken delivery of new aircraft in the past two weeks. We are very much-----
Where will they be based?
Ms Lynne Embleton
They are based in Dublin but we are looking to add new routes and to grow. The airline is now back on a growth trajectory.
Was any of the money Aer Lingus received from the Government used to set up the Manchester base?
Ms Lynne Embleton
No.
It was all used on its Irish workforce and Irish bases.
Ms Lynne Embleton
Yes.
I thank the witnesses.
I thank the witnesses for coming before the committee. Notwithstanding the unprecedented nature of what happened on 10 September, it was another fine mess with which Aer Lingus is associated. It came on the back of flights being cancelled, particularly during summer. I noted that other airlines were not impacted to the same degree as Aer Lingus. What assurances can the witnesses give customers that a similar occurrence will not happen in future? What measures have been put in place to ensure the Aer Lingus IT system does not let it down again?
Ms Lynne Embleton
Mr. Moriarty has explained the changes that have been made by Kyndryl since the outage and that we are seeking to put in a tertiary link. That should deal with the combination of events that occurred on that occasion.
As regards the Deputy's comment on flights during summer, if one looks at what has happened across not only European aviation, but also aviation in the US, the entire European and US systems have really struggled this year. In fact, the CEO of one of the European airlines said yesterday that the system just about survived the summer. In that context, if one looks more broadly, Aer Lingus has actually fared really well this summer. At the peak of our cancellations, which was when we most recently appeared before the committee, we were cancelling almost 2% of our schedule. That was for a short period linked to a wave of Covid, however. Beyond that period, our cancellation rate is significantly ahead of most European carriers and our punctuality has been ahead of most European carriers and, indeed, ahead of Ryanair here in Dublin. If one takes a broader context, Aer Lingus performed well through summer relative to what was happening with other airlines and in the system as a whole.
That is Ms Embleton's view-----
Ms Lynne Embleton
It is what we are shown by the data.
I have experience of this. People with whom I have travelled have experienced flights consistently being cancelled at short notice by Aer Lingus. That was followed by the debacle on 10 September. Again, what assurances can Aer Lingus give passengers that this will not happen again? Mr. Moriarty stated that Aer Lingus has engaged a main primary contractor. Was a different contractor responsible for the backup services?
Ms Lynne Embleton
It was the same supplier. It is obliged to provide us with a fully resilient service.
What has Aer Lingus done differently to make sure this will not happen again?
Mr. Donal Moriarty
We have fixed the issue with the secondary line so the network card issue, which caused the problem in the backup system, has been corrected. A new monitoring system has been put in place to ensure the same error in the network card cannot reoccur. The testing about which I spoke to the Chairman is ongoing. Finally, we are looking to put in place a tertiary system to provide additional redundancy and backup. By way of context, this sequence of protections is in excess of what is required from a best-practice perspective, but we feel it is appropriate to put it in place.
Are there any circumstances under which Aer Lingus would re-examine the reopening of the cabin crew base in Shannon?
Mr. Donal Moriarty
No. That decision was taken during the pandemic and the primary motivation for taking it was to ensure our ability to resume our operations in Shannon Airport on a viable and commercial basis. We resumed our transatlantic services to New York and Boston in March 2022 and our London Heathrow service in October 2021. That decision has been successful but its success has been built primarily and significantly on the fact that we had to close the cabin crew base in order to make it viable. It would not be in our interest, the company's interest or the mid-west's interest for us to reopen a cabin crew base in Shannon Airport.
An important service to the mid-west is the Heathrow service to Shannon, which provides vital connectivity. We used to have three flights a day. We now only have two flights, which has been the case for some time. Will Aer Lingus confirm the third Heathrow service will be restored at the end of October?
Mr. Donal Moriarty
I understand it has been a mix of three and two times daily over the course of the year. We have not launched or announced our summer service for next year but our services out of Shannon for winter 2022-23 will be as they are now.
Is Mr. Moriarty saying Aer Lingus will put on that third flight?
Mr. Donal Moriarty
No. There is a mix of twice daily and three times daily flights, depending on the day of the week, and I think that will continue over the winter period.
Ms Susanne Carberry
Flights are predominantly three times a day but that does drop to two. This is essentially driven by demand. When demand increases, schedules will increase based upon that. It is about maximising the opportunity, so there are three flights for the moment.
Prior to Covid, there were plans to have routes from Shannon to Barcelona and Paris Charles de Gaulle Airport. Will those routes be revisited?
Mr. Donal Moriarty
Touching on the answer we gave when we were before this committee about eight weeks ago, our short-haul fleet has reduced since 2019, when we had 37 short-haul aircraft. During the course of this summer, we had 31 short-haul aircraft and we have just added two A320neo aircraft based in Dublin, as Ms Embleton said. However, we are still down four short-haul aircraft versus 2019 numbers and that is one of the impacts the pandemic has had on our business. There is significant competition for the deployment of those aircraft. We will deploy them to their commercial strength and where they best fit. Although it has not been announced, I do not believe our summer schedule out of Shannon Airport for 2023 will include the services we announced previously, such as Paris and Barcelona, but never had the opportunity to commence.
Has Aer Lingus looked at routes to the United States? Mr. Moriarty said the services out of Shannon are performing very well and he is happy with those. Has he looked at expanding services to Chicago or Washington?
Mr. Donal Moriarty
The traditional routes out of Shannon to JFK and Boston airports are strong. We do not believe there are opportunities for other transatlantic routes out of Shannon.
The Government is considering a public service obligation, PSO, application from the Shannon Airport Group to connect people to a European hub. Schiphol was mentioned. Does Aer Lingus have contracts with other European countries to operate PSO flights?
Mr. Donal Moriarty
No. Aer Lingus mainline does not operate PSO flights. Our franchise partner, Emerald Airlines, operates the Donegal to Dublin service on a PSO basis. However, as a short-haul mainline airline, Aer Lingus does not do so.
Does it do so in any other European country?
Mr. Donal Moriarty
No, not at this point.
I call Senator Craughwell. Sorry, I mean Senator Horkan.
That is all right. The Chairman is not stuck with Senator Craughwell for now at any rate.
He is a valued member of the committee.
Of course he is.
Many of the points I have on my list have been raised. I am still struck by the fact that of all the industries in the world, the airline industry is the one with the most fail-safe and backup procedures. If an engine fails, the plane can fly with one engine. They have all those kinds of systems, rightly so, but I am still a little baffled. Despite the interrogation by Deputies Lowry and Cathal Crowe and the Chairman, who made their own observations, I find it difficult to comprehend that there is not a third backup somewhere along the way. If I understand correctly, there is a main system and the backup system is in use all the time as well, providing extra capacity to the main system.
Ms Lynne Embleton
It is designed to have fully independent and separate systems, so if one fails, the other works. What is common practice is to allow traffic over both to avoid a situation whereby one system lies dormant and then fails at the point it is needed. We flip between the two to enable us to ensure both systems are working, which is why a main failure and a backup failure should not have happened.
I am just wondering because it has happened in other systems. Could it have been the case that the failure of the main system caused the backup system to overload?
Ms Lynne Embleton
It should not have. Had the network card been working appropriately, that should not have happened.
As a result of the main system going down, was the backup system overstretched to such an extent that it could have crashed?
Ms Lynne Embleton
No.
Mr. Donal Moriarty
That did not trigger the network card failure. The network card failure was independent of the volume of traffic.
This happened on 10 September. If it had happened on 11 September, we would have a load of extra conspiracy theorists asking how it could happen to an airline the size of Aer Lingus that has the backup of the International Airlines Group with its technology, including airlines such as British Airways, Iberia, Vueling, and other large airlines, each with hundreds of aircraft. Most people, not just the 30,000 passengers who were affected, looked at it and thought it was absolute chaos. In the old days, there were paper tickets and boarding passes. Those manual systems are long gone and we now have a system that is 100% technology based, yet there is no third backup. Will there be a third backup in the future?
Mr. Donal Moriarty
What happened was truly exceptional. The coincidental failure of the backup system was a truly exceptional event. On the question of a third backup, we are looking at putting in place a tertiary system that would provide additional resilience. To be clear, the system we had in place conforms with best practice. The additional resilience we are looking to put in place, as a result of our decision, will go beyond best practice.
All airlines have learned, be it from systems crashes or whatever else.
Technology has moved on, such as better fire retardant measures and so on. We always learn from the mistakes of the past. I presume best practice may be upgraded to a new level of best practice as a result of what happened. Of the 30,000 passengers, some 20,000 rebooked or flew a couple of days later. Did the other 10,000 cancel their flights or not bother to fly?
Ms Susanne Carberry
Some 20,000 were delayed.
Another 10,000 did not travel at all.
Ms Susanne Carberry
Their flights were cancelled. They were either reaccommodated on another service or received a refund.
The 20,000 people who were delayed flew on additional services during the week.
Ms Susanne Carberry
The Senator should bear in mind that we had very few aircraft leaving Dublin after 9 a.m. on the Saturday. Any aircraft that did leave Dublin after that point were considered to be delayed and, therefore, those passengers were impacted.
Some 20,000 of the 30,000 passengers affected were on services that were delayed. It was the original service which flew later.
Ms Susanne Carberry
Yes, over the course of the 24 hours.
The 10,000 were mostly reaccommodated on later flights.
Ms Susanne Carberry
The vast majority were reaccommodated and that was a reaccommodation of their choosing. If we had availability, we moved them onto another flight or they contacted our call centre or went to our website.
Roughly speaking, how many people did not travel?
Ms Susanne Carberry
We believe that 5,000 to 6,000 people did not travel and they have all received refunds at this stage.
Some 20,000 people travelled on the services they should have been on but which were delayed. About 6,000 of the 10,000 people who were not accommodated because their flights were cancelled flew later and 3,000 to 4,000 people did not travel at all. In terms of compensation, if people did not travel they received money for flights. Did they receive money for accommodation they had paid for at their destination?
Ms Susanne Carberry
Any reasonable expenses incurred as a function of the disruption would have been reimbursed to our customers.
Okay. I happened to be in the airport the following weekend and spoke to people who were offered a place for the following Friday when a Sunday flight was cancelled. They were supposed to come back on the following Sunday, which meant they would only get two days of a seven-day stay in Lanzarote. They ended up travelling somewhere else. The offer they were given was not particularly attractive compared to what they were looking for.
It was mentioned that there were 37 aircraft in the short haul fleet. Was 2019 the peak?
Ms Lynne Embleton
There were 37 aircraft. We had leased in three others to grow the operation. We were effectively operating 40 aircraft and that was the peak.
It is now down to 31 plus two, which makes 33 in total. Is the Aer Lingus short-haul fleet the right size for where the airline wants to be? Does it want to go back to a fleet of 40?
Ms Lynne Embleton
I think we will see market growth in the industry. That is what I fully expect to happen. We are growing long haul faster. We have just announced a new service to Cleveland. It is the only connecting direct route between Europe and Cleveland, which will benefit Ireland and connections onto Europe. We are growing long haul. We had long-haul aircraft on order that we were able to take up over the course of the pandemic. We have more coming. In the case of short haul, we took advantage of two leased aeroplanes to go back up to 33. I expect that the market will develop. As that happens, I would like to grow our short-haul business with it.
Will it go back up to 40?
Ms Lynne Embleton
We will look at that on a case-by-case basis. As long as we think we can get a return on the aircraft, we would like to grow.
What are the load factors now for short haul?
Ms Lynne Embleton
The load factors are high. They are consistent with 2019 levels.
Is that 80% to 90%?
Ms Lynne Embleton
Yes, in peak times. It is very different in the off-peak.
What is it like in the off-peak?
Mr. Donal Moriarty
Typically, it is ten points lower. It would be in the mid to late 80s or early 90s.
It is still at 80% plus most of the time.
Ms Lynne Embleton
On a wet Tuesday afternoon, not many people want to fly.
I accept the point. I happened to be on a flight to Brussels in March and there were 44 people on the plane. I was surprised the number was that low. I presume it would be not be viable to fly those kind of load factors in the long term.
Mr. Donal Moriarty
I think the Brussels flights today will be a lot busier than that.
Ms Lynne Embleton
The Senator makes an important point. The market is seasonal. As we are looking to add aircraft in the fleet, we need to be confident that it can pay for itself on a year-round basis and not just two or three months of the summer peak. The seasonality and off-peak demand is an important part of our considerations when we are looking to make a case to acquire more aircraft.
I understand that Privilege Style flew some Aer Lingus operations over the summer. Is that still happening?
Ms Lynne Embleton
That was introduced to try to protect customers over the summer when we knew we were having the Covid-related sicknesses we mentioned to the committee last time. We could have cancelled, but we tried not to do so. By bringing in third-party operators, more people got to their destinations. That is not a normal part of our business model.
Are any third-party operators currently operating routes on behalf of Aer Lingus?
Ms Lynne Embleton
No.
I would like to mention something I saw on Twitter. I am not the biggest fan of everything on Twitter. I saw people complaining that the in-flight entertainment, IFE, service did not seem to be working on ex-Qatar Airways long-haul aircraft now operated by Aer Lingus.
Ms Lynne Embleton
I will ask Ms Carberry to comment. We took two aircraft into the fleet before the Covid pandemic and did not have an opportunity to fly them. Those aircraft are now flying and happen to be ex-Qatar Airways aircraft. One of the impacts of the pandemic is that the chain has struggled and getting spare parts for those aircraft in terms of IFE has proven to be more of a challenge than we would have expected. We are looking to upgrade the interiors of those aircraft as soon as we can get the spare parts and components to do so.
Will that take two, three or six months or year? What is the timeline?
Ms Susanne Carberry
It will probably be up to 12 months because of supply chain challenges. If it was our choice, we would have them upgraded tomorrow.
I accept that. Obviously, it is disappointing for people who are on a plane and expect a certain level of standard to end up on a different aircraft. People can get lucky and board an aircraft which has been upgraded, but equally others are unlucky. Presumably the price is the same and people are not paying any less because they are on a particular aircraft, despite probably not getting what they expected.
Ms Susanne Carberry
People may not be getting what they might have expected, but we have proper service recovery for these aircraft. We try to communicate with passengers so that they are aware of the differences. While there are IFE challenges on those aircraft, not every set of IFE is unavailable. It is only certain seats on the aircraft that are challenged, as opposed to the full aircraft. We try to deal with them on a case-by-case basis.
It is not all seats.
Ms Susanne Carberry
A lot of the aircraft is absolutely fine. Some of the IFE sets are challenged by supply chain issues and replacements.
With regard to 10 September, has Aer Lingus estimated the cost of all of the delays, extra staff costs, rescheduling of peak passengers, refunds and costs people are entitled to get back? What is the cost to the airline of all of that?
Mr. Donal Moriarty
We are looking at the overall costs. For the reasons I outlined to the Chairman earlier, we are engaging with the providers on the impacts. It is not something that we can discuss.
I take the point. I understand that. Does IAG help Aer Lingus with IT or does it run independently of it?
Mr. Donal Moriarty
Aer Lingus technologies are fully integrated with IAG. It provides huge support to Aer Lingus in terms of services and infrastructure. We work very closely and well with it as an organisation.
I refer to the issues we had with baggage handling earlier in the year. I accept that Aer Lingus was not the worst in terms of what happened but there were certainly problems with it. What is the current situation regarding baggage?
Mr. Donal Moriarty
I am pleased to report that we are in a much better position than we were earlier in the summer. The current number of bags we have on hand is just over 100. A number of tagless bags have landed on us in Terminal 2 which we are in the business of trying to reassociate with customers. That is the difficult piece I referred to at the last session. This is where we enter information about a bag, in particular characteristics that might help to identify it, into a system that all airlines tap into. That requires a match at the other end. There is a little bit of catch-up that needs to happen in the industry. Even though we will compensate customers in respect of the 21-day industry standard, we will continue to try to repatriate those bags.
There are 100 bags. I presume they are lost on a long-term basis. Is Aer Lingus still finding lots of bags on a daily basis? Is it the case that planes arrive today but the bags do not arrive until tomorrow?
Mr. Peter O'Neill
No, it has eased considerably. A lot of the pressures we saw, in particular across network airports such as Frankfurt and Amsterdam, which is still problematic, have eased considerably. We have sent members of our teams to these airports to check whether there are any Aer Lingus bags. The numbers are very small; fewer than ten in those cases.
We are all paying more for fuel. How is Aer Lingus pitched or hedged for the future? Will we see increases in prices because of the increase in fuel charges generally?
Ms Lynne Embleton
We are hedged in line with our group policy. It is not only the fuel price; the exchange rate is also hurting. This is a huge cost that the industry is facing now that we would not have predicted at the beginning of the year. Ultimately, when input costs go up, they will get passed on to customers. We are hedged partially but eventually those hedges unwind and the costs are-----
By how much will ticket prices go up? Will it be by 5% or 10%?
Ms Lynne Embleton
I would not like comment now on our pricing policy, but eventually we would expect the whole industry to want to recover the cost of operation in the ticket prices. I think every airline will be looking at it through a similar lens.
I thank the Aer Lingus representatives for coming in today and for being reasonably candid in their answers. I hope the company will have backups in the future so that whatever happened on 10 September will never happen again.
I thank the witnesses for appearing to discuss the events of 10 September, which bookended what has been a torrid year for Irish aviation in terms of the customer experience at least. One of the people impacted on the day was Carol who works with me in the office. She is someone who did so much for so many over the summer to get them on flights on holidays, helping with passport queries and all the rest, and she was one of the many caught up on the day. It was an awful day. I thank the witnesses for their explanation and answers thus far.
How many people are directly employed by Aer Lingus in the cybersecurity side of its IT or is that entirely done in the IAG parent group?
Ms Lynne Embleton
We engage experts. Cyber is moving all the time.
Yes, indeed.
Ms Lynne Embleton
We need to use the expertise of cyber experts. The group takes a look at cyber and we engage as part of that. We are using leading-edge providers to help us with cybersecurity.
Is that through IAG or Aer Lingus itself?
Ms Lynne Embleton
IAG is co-ordinating all of the cyber expertise across the group and we then tap into that.
Did the expertise that Aer Lingus engaged recommend the best practice as regards what existed in the primary cloud backup, with the backup line that ultimately failed, and which Aer Lingus considered best practice at the time and-----
Ms Lynne Embleton
This was not a cyber issue; it was a network issue.
Yes, it was a network issue. However, it would be the cyber team or advice within the organisation that would presumably advise the best way for Aer Lingus’s backup data to be held, stored and secured. That is how organisations would run.
Ms Lynne Embleton
We will work with our system providers to look at what is the most resilient set-up for our core systems. Cyber then sits above this and looks at all of our systems and looks to ensure that we have the monitoring and protection in place. They are two different things within the IT consideration.
One of the points of resilience and one of the key discussions in the area of cyber is dual site backups for the cloud system. What I have taken from Ms Embleton’s initial answer and statement is that the cloud was located in one site, albeit with a backup system.
Ms Lynne Embleton
No, we have them in two different cities.
They are in two different cities. Was the backup system that failed in a different city?
Ms Lynne Embleton
Yes.
Okay. That is clear. What does the tertiary system, which is the learning from this and the next step, look like? Where is that?
Mr. Donal Moriarty
That has not been defined yet. It is being defined for the purpose of providing that resilience in redundancy. However, what that looks like has not been defined yet.
Kyndryl is a pretty big player in this and presumably it had many other clients. However, there did not seem to be anyone else impacted or, at least, none that were reported in the news, and certainly not in the aviation industry. Was that because the backup failure was Aer Lingus-specific within this system and the backup systems of other clients worked? Did Aer Lingus ask that question?
Mr. Donal Moriarty
Aviation is 24-7, seven days a week. We operate all through the weekend, which is not the case for many other businesses. There were other companies that were impacted – I do not have the names of them here – but their systems were not impacted to the same degree because their usage and reliance on the systems over the course of a Saturday-----
Do they operate in the aviation sector?
Mr. Donal Moriarty
I do not believe so.
Aer Lingus is the only airline client it has.
Mr. Donal Moriarty
We are talking about the physical break in the fibre-optic cable and what was impacted by that. I do not know the names of the other companies that were impacted. It is not a-----
Ms Embleton mentioned two different sites. Which city is the primary cable in?
Mr. Donal Moriarty
The two cities are, I believe, Manchester and Birmingham.
Two UK cities.
Mr. Donal Moriarty
Returning to best practice and expertise, as I mentioned, the expertise for and the robust cloud hosting of our reservation system are located in the UK. That is where the expertise is.
Is that a different company to Kyndryl?
Mr. Donal Moriarty
No, that is Kyndryl.
It is doing both. Who is responsible for the cable itself?
Mr. Donal Moriarty
The cable is provided by a top-tier Internet services provider that is engaged by our supplier.
Kyndryl employs that provider. The problem was the cable was faulty.
Mr. Donal Moriarty
The cable was severed.
Was the fault in the second line with a provider separate from Kyndryl?
Mr. Donal Moriarty
No. That was a network card failure that was caused in that system.
The Deputy has plenty of time.
There is a broader point here separate from what has been made in terms of how systems are being backed up when we are talking about data centres. I am not hung up on the fact the data centre is located here, in the UK or wherever else, as long as it is secure. What happened, based on the answers we have been given, seems to have been a unique, unlucky event. There are two separate sites and that is the resilience that is best practice, as described by the witnesses. It is very unlucky that this happened. In essence, the wider issue is we have large companies like Aer Lingus and thousands more across the country that use two data centres to back up their cloud systems. That is what we, as customers, expect. We do not link it with climate change, energy usage and energy security. I apologise to the witnesses as I am going off the point. This is not related to-----
I will give the Deputy latitude.
This is the reality of data centres and having everything online. It is not just one data centre that is being used, rather it is a mirror of the data in two separate sites. That is where we are going as a society in terms of IT and everything else, with all the subsequent climate impacts.
I am satisfied with the answers. I thank the witnesses and I hope that something like this will not happen again. It seems that Aer Lingus is putting in place measures to ensure that is the case. The next time Aer Lingus is before us, whenever that may be, I would be interested in getting some detail on what the further tertiary measures will be.
In layman's terms, are we looking at a third backup?
Mr. Donal Moriarty
We are looking at a tertiary system that provides that additional backup.
In the event that both cables or systems were to go down again, there would be a third backup.
Mr. Donal Moriarty
That is what we are looking at.
The last time Aer Lingus representatives appeared, they were here with the Dublin Airport Authority, DAA, and it was a fractious meeting. They informed us this time last year, when the company was doing its schedule for the summer, that it believed the industry would return quicker than other industries. It did return very quickly and the industry was caught out. How has Aer Lingus’s relation with the DAA been in recent weeks and months in terms of operations in Dublin Airport? Obviously, there would have been a co-operation between the DAA and Aer Lingus on what happened on 10 September in terms of ensuring communication with people outside the terminal building. How is the relationship between the two companies at the moment? Would our witnesses admit that it has been difficult during Covid and as we come out of the pandemic?
Mr. Peter O'Neill
I am happy to comment on the current status with the DAA. As we have gone through the summer and it got over its very public security issues, the operation has stabilised quite significantly. I would like to acknowledge publicly the support from the DAA on 10 September because we had fantastic support from its teams on the ground in helping us manage the situation as it developed.
Again, we are in constant dialogue with the DAA. There are the usual pressure points with a busy airport and the infrastructure. While we welcome the new runway coming online, there are congestion points around piers and taxiways. That is an ongoing dialogue with the DAA around how we maximise that and ensure Dublin remains competitive and functioning for all the users.
Mr. Donal Moriarty
We are currently going through a regulatory process with the Commission for Aviation Regulation where the airport presents its view of airport charges, pricing and infrastructure to the regulator. All industry participants - airlines - participate in that process. The process leads to a reasonably robust exchange between the regulator, the airport and the airlines, which is to be expected and is probably appropriate. In that context, we have discussions and views on the development of infrastructure at Dublin Airport. The opening of the new northern runway in August was very welcome in that it is a key piece of infrastructure for the airport and the country but more infrastructure is required. As Mr. O'Neill mentioned, a new pier, stands and airport infrastructure are required to service that new runway. Aer Lingus is concerned that such infrastructure is not planned to be delivered quickly enough. The current capital expenditure programme of Dublin Airport sees that infrastructure primarily coming on stream in 2029-2030, which we believe is too late. Inevitably, that difference of opinion creates some challenges and tensions but, as Mr. O'Neill has said, on an operational level we work very well with Dublin Airport. The DAA supported us hugely in the context of 10 September. Indeed, after its own difficulties on 29 May, it recovered very strongly over the summer such that Dublin Airport performed much better than peer airports across Europe during the course of this year.
From 8 October, the railway order for MetroLink will be open for submissions with An Bord Pleanála. Therefore, I ask that Aer Lingus, which delivers millions of passengers into Dublin and has a huge workforce working at Dublin Airport, would consider making a strong submission in support of delivering MetroLink as part of this part of the process.
Mr. Donal Moriarty
We are very much involved in IBEC's transport and infrastructure council. We contribute to that and we will make submissions along those lines.
Regarding the number of people affected, am I correct that, of the 30,000 passengers, 20,000 people were delayed, 10,000 people had their flights cancelled, 6,500 compensation claims were received, and 91% of those claims have been processed? The 20,000 people who were delayed have been dealt with and Aer Lingus is working its way through the cohort of 10,000 people who had flights cancelled. Will the witnesses give a breakdown of the figures, please?
Ms Susanne Carberry
Of those 11,000 cancelled passengers-----
Is it 10,000 or 11,000 passengers?
Is it 10,000 or 11,000 passengers?
Ms Susanne Carberry
It is 11,000.
I ask Ms Carberry to be a little more precise. How many passengers were affected in total?
Ms Susanne Carberry
It was 32,000 people, comprising 21,000 people on delayed flights and 11,000 people on cancelled flights.
Deputy O'Rourke will take things from here.
Ms Susanne Carberry
Of the 11,000 passengers on cancelled flights, some of them would have travelled over the course of the next three or four days and some would have opted not to travel and not to go forward. To those passengers who were impacted, we offered the vast majority refunds and compensation to compensate them for the impact of the disruption on 10 September.
So the number of people who applied for refunds and compensation is 6,500?
Ms Susanne Carberry
We have received 7,500 applications for refunds and compensation to date and 91% of them have been processed.
Please be a little bit more specific. Of the 11,000 passengers, what is the actual number of people who have applied for compensation?
Ms Susanne Carberry
We cannot match passenger by passenger. I know of the passengers who were impacted by cancelled flights. I know of the passengers who have applied for compensation and refunds. I also know of the additional bookings we took in over the course of the next three or four days.
We understand the 21,000 figure, so please outline in depth what happened to the 11,000 passengers.
Ms Susanne Carberry
The vast majority of the 11,000 people were re-accommodated on services by Tuesday evening over the 72 hours.
How many?
Ms Susanne Carberry
I do not have exact numbers. All I can look at is trends and then the impacts we would have had across our call centres, which were extremely busy on Sunday but were very quiet come Monday morning when we had average wait times of less than five minutes.
The other piece of information I have is the volume of refund and compensation applications we have received to date, and that is 7,500 applications, of which 91% have been processed.
Do the 700 customers mentioned earlier form the outstanding balance?
Ms Susanne Carberry
Yes. We have written to those customers to advise we will process their applications as quickly as possible but this month at the latest.
Aer Lingus is unable to tell whether some people went home and just moved on with their lives.
Ms Susanne Carberry
In an environment like ours, it is very difficult to track passengers and understand exactly where they moved.
Does Aer Lingus have an indication of the cost of the outage to it?
Mr. Donal Moriarty
Obviously, it is significant. To my point earlier, we are engaging with our provider about those impacts, so we cannot get into details on the quantum of the cost to Aer Lingus.
How much has Aer Lingus paid out to date?
Mr. Donal Moriarty
In terms of refunds and compensation, I do not have that figure.
I appreciate the point, but for a sense of it, are we talking about millions, tens of millions or hundreds of millions?
Mr. Donal Moriarty
Certainly millions.
There has been quite a deal of scrutiny of the systems and backup systems. We are all very concerned about critical infrastructure in many areas, whether that is gas or electricity pipelines. Was the outage caused by construction work or something else?
Ms Lynne Embleton
It was construction work that related to a rail tunnel, which is why it took some time for people to get on site to conduct repairs. The construction machinery broke through the casing and then the cable, so it was unrelated construction.
I will move on to the broader issue of the recovery of the sector. Will the witnesses give a sense of how strongly or otherwise the sector is coming back and the trajectory for the year ahead? On a previous occasion when they were before the committee, we talked about loading. Will the witnesses give us a sense of the recovery of aviation in Ireland? It seems to be strong.
Ms Lynne Embleton
At industry level, the International Air Transport Association, IATA, sees a full recovery of the industry by 2024. We have had a good summer and have seen a real demand for travel, particularly leisure travel. There is some question mark over business travel and the volumes of business travel. Leisure travel has been strong over the summer peak, which is exactly what we said we planned for. We had hoped and expected there would be a big summer.
I apologise for interrupting.
It is hard to tell but does Ms Embleton think Zoom meetings and conducting business online is something that will be sustained or is she saying that she has seen it change this summer?
Ms Lynne Embleton
Certainly what we have seen is a recovery of the leisure traveller faster than the business traveller. Regarding how much of that is down to economics or to looking at what has happened across the system, and I mentioned this is Europe-wide and in the US, it could be an impediment to short-term trips and it is to be hoped the industry will settle down again.
Will Ms Embleton put a percentage on it? What percentage of leisure travel and trips to visit family and friends is back and what percentage of business travel is back?
Ms Lynne Embleton
I would say leisure is pretty much there, from our perspective. As I say, we are growing and will be growing our long-haul fleet in particular. Mr. Moriarty has already explained that our short-haul fleet is smaller as a consequence of Covid-19, but we are going on long-haul for next year, so we certainly see a positive trajectory for us.
What about business travel? Is business travel back by 50% or 60%?
Ms Lynne Embleton
It is certainly higher than 50% but it is not back to pre-pandemic levels yet.
One of things we will be concentrating on as a committee, and we have the national aviation review coming up, is the question of regional balance. We have a very strong and dominant Dublin Airport. We also have Cork, Shannon, Ireland West Airport Knock and, on an all-island basis, Belfast. Will Ms Embleton comment on the type of considerations the likes of Aer Lingus factors in when thinking about an airport to go to with a new service or a new route?
Ms Lynne Embleton
There are two components to it. There is what we call the point-to-point demand, which is local demand from city to city, and away from a hub, it is the size of that point-to-point demand that determines whether a route is going to be viable. It needs to be viable on a year-round basis generally if we are going to invest in an aeroplane. What is different in hub economics is there is the point-to-point market, which might be smaller than the whole aircraft. As I said, we have just announced Cleveland as a new route. Dublin to Cleveland traffic itself would not justify a whole aircraft, but we are the only carrier flying between Cleveland and Europe, and therefore what the hub gives is that breadth of destinations to take a few passengers from all the different cities, and if they are gathered up and all channelled onto the long-haul aircraft, a service can be sustained. Hub dynamics are very different and it can be seen across global aviation. Hubs play a very powerful role in the development of aviation, but that said, there is still a role for point-to-point direct traffic when the local market justifies it. We look at both but certainly it is easier to justify expansion from a hub because of this effect of connecting traffic on top of the point-to-point traffic.
Mr. Donal Moriarty
To add to that, we will fully participate in the national aviation policy review and reformulation, but on the point we made earlier about Dublin Airport and the development of infrastructure there, the hub Ms Embleton was referring to is dependent upon that full suite of infrastructure being put in place; not just the runway but the pier and the stands. That is what enables the traffic growth and what delivers that new route network, not just in Aer Lingus but through other airlines. We are certainly reliant upon that for the development of our growth strategy across the north Atlantic. We have shown before that this will deliver very strongly from a national economic perspective in terms of the value that is driven to the Irish economy through foreign direct investment and others, but it is critical that the infrastructure is put in place to support that development and growth. That is why we will be emphasising that in the context of the national aviation policy and we are doing so currently in the context of the Commission for Aviation Regulation's determination.
Outside of Dublin, what is the case for regional and other international airports? I take the point that it is around the demand being there. Is there anything else?
Mr. Donal Moriarty
Dublin Airport has that hub capability and therefore can attract traffic that is not point-to-point and connects Europe to North America in Aer Lingus's case. The development and strength of Dublin Airport will accrue benefits to other airports also - Cork is obviously in the same group, but also Shannon Airport - in that it allows us to grow our transatlantic services, to grow our business and adds to the strength of Aer Lingus as an airline. That is positive in terms of our development of routes across our airports, including Shannon and Cork airports.
I wish Ms Embleton the best of luck in her role. We have not met in person so I wish her well in her role as CEO.
I flew Aer Lingus at the weekend and it was very good, as per usual. I want to continue on a couple of issues that were teased out in the last few rounds of questioning. This is the potential future disruption to services in and out of Dublin Airport, disruption which already has done catastrophic damage to the reputation of the DAA in terms of what happened earlier this year with the rapid return to air travel three years ahead of what had been forecasted, and where that leaves Aer Lingus. Mr. Moriarty made many references to the development of that hub infrastructure, and while I have a relative understanding of it, what concerns me is, looking at Dublin Airport as it stands, at its 2019 passenger levels, the airport was close to its maximum operating capacity. Terminal 1, as far as I am concerned, is a kip in comparison with many airport terminals I have used this summer throughout Europe and farther afield. It is extremely uncomfortable from a passenger point of view, and what is even more uncomfortable is the fact there is no plan by the Dublin Airport Authority to put any investment of note into it for it to be a positive passenger experience once a passenger goes over to the airside operations. I know Terminal 2 is more of a concern for Aer Lingus.
Without referring to the aviation policy review that is going on at the moment, because that is one of those many instruments of delaying investment, I want to get an idea - brass tacks - from Aer Lingus of what it wants to ensure the business can grow in the next five to ten years. That is what we need to hear. Is it a case of relocating? One example is if the maintenance hangars in Dublin Airport were relocated to Shannon. That could provide huge numbers jobs for the west and free up all that space on the northern runway for new terminal infrastructure. Would the witnesses relocate to the south of the airfield in Dublin Airport the An Post services that are currently taking up a lot of potential expansion space for Terminal 2? Will the Aer Lingus representatives give committee members some square answers as to what they think could be done there? That would be very helpful from our point of view when we are discussing these issues with Government and with the Minister of State with responsibility for aviation. Some direct answers would be very helpful. I say that because we are in an interesting space where we are replacing the head of the DAA, which will have significant consequences for aviation in this country. Now is the time to be making the position of the airline clear in terms of what it wants before the new incumbent DAA CEO is appointed.
Ms Lynne Embleton
I will ask Mr. Moriarty to comment on some of the specifics we feel we need around the airport. First, however, I echo what the Deputy has said. We want to grow, and that requires a functioning airport. A runway is one step, but adding movements to the airport without adding the subsequent infrastructure is just going to make the operational challenges more difficult, not easier. For the airport to be functioning, we need appropriate screening, stands and space for the ground equipment to be stored and moved around. It is a multifaceted requirement to get an airport that truly functions and enables the growth at a level of operational performance we want to give to our customers. We share the concern that if we grow the headline number of movements - take off and landing at Dublin - without providing the infrastructure in a timely manner, there is a risk that the customer experience at the airport deteriorates rather than gets better. That is why we are engaging with the International Civil Aviation Organization, ICAO, on that process but we see it at almost every pinch point across the airport, where we believe more is needed in terms of infrastructure, readiness and an airworthiness review certificate, ARC, and a list of requirements is being worked on across operations and our network planning team.
Does Mr. Moriarty wish to add something?
Mr. Donal Moriarty
To be specific, Dublin Airport's capital investment programme contains the infrastructure that Aer Lingus requires. Our difficulty is that it is coming on stream too slowly. The principal elements of the capital investment programme that are critical from a hub infrastructure perspective are to the south of terminal 2, namely, a new pier extending from terminal 2 southwards, adding a significant number of new contact stands in that area.
I might have a back and forth with Mr. Moriarty on that. An Post and a couple of other organisations have facilities at that location. What is there currently?
Mr. Donal Moriarty
An IAG Cargo hangar is located there, as are border protection and An Post facilities. The pier needs to come down in that area and those facilities need to be relocated. There are plans in place with Dublin Airport for them to be relocated. The cargo providers in Dublin Airport, including IAG Cargo, have to be relocated to another spot on-site. An Post's facility, which does not need to be at that location, will similarly need to be moved on-site to facilitate the pier moving southwards from terminal 2.
What has the DAA been saying to Aer Lingus in response to the request for upgrades at terminal 2, including the provision of new pier infrastructure? How many additional gates is Aer Lingus seeking?
Mr. Donal Moriarty
The plan is in the capital investment programme. The pier-----
We know that, but what has been the response?
Mr. Donal Moriarty
The issue is that the delivery of the infrastructure has to go through a complex planning application process. It will not entail a single application for a pier and another for stands. Instead, a strategic planning application needs to be made if Dublin Airport is to get planning permission for the development of that infrastructure.
I would rubbish that. Let us consider the extraordinary work done at Cork Airport in the renovation and refurbishment of large elements of the airside infrastructure, including the new runway. That work was done in record time and under fantastic leadership within the DAA, particularly in Cork. I am sure that Senator Buttimer will concur. Infrastructure delivery in Dublin seems to be happening at a snail's pace, though.
I find something else a little odd, so Mr. Moriarty might provide some information. The cost of the new northern runway at Dublin Airport was high compared with what was provided at Cork. The Dublin runway is much longer, but I am at a loss as to why the cost was so high.
Mr. Donal Moriarty
Dublin Airport will say that it was delivered on time and within budget. That-----
But the budget was very big.
Mr. Donal Moriarty
----is actually correct. It was a new runway whereas the development at Cork Airport involved making improvements to the existing runway. They were fundamentally different types of project from a cost perspective.
As to what Dublin Airport is saying, the main challenge is planning. A strategic planning application is needed for permission to develop all of these facilities at the airport, but it has not been made. It needs to be made with a degree of urgency because it will inevitably be appealed. People have a right to appeal and we are not challenging or questioning that, but it adds to the timeline. For the airlines, the problem this will pose is that there is a likelihood that the infrastructure will not come on stream early enough to match our growth plans. We have aircraft coming. Ms Embleton referred to them. We received eight A321neo aircraft just before and during Covid and we have six A321XLR aircraft being delivered to us over the coming years.
They are excellent. I have flown on them. If I recall correctly, they were servicing the Paris route for a short duration last year.
I will ask an important question. This one is for Mr. O'Neill, who is the chief operating officer at the moment. I have heard some rumblings that the incentives that the DAA is providing to get airlines to base aircraft at Cork Airport are not as good as they could be. For those listening to the debate who are not overly familiar with aviation, having aircraft based at an airport is key to getting additional routes. What is Mr. O'Neill's view on what the DAA could do to incentivise Aer Lingus further to open additional routes? We have heard murmurings from Ryanair that it is going to consider the issue. As our flag carrier, we would all like to see Aer Lingus expanding its services in Cork. Is there an issue of the DAA not providing enough financial incentives? There is significant demand from people across Munster to fly out of Cork Airport, and its routes are often raised with me as a representative in the area.
Mr. Peter O'Neill
I will make some initial comments, after which Mr. Moriarty might contribute. The problem is the number of short-haul aircraft that are available to us. We had a net reduction in our short-haul fleet during Covid. The Deputy's question comes down to the best route option for the resources available to us, including aircraft, and what the opportunities are. The incentives that have been put in place are always welcome and help to support what the Deputy is referring to, but this issue falls into a broader business case around the best deployment of aircraft.
The decision to send some of the A330s to Manchester was questionable. That is my only criticism. It raises the question of whether Aer Lingus is basing aircraft with the new company, Aer Lingus UK, because it is not making enough profit through the airports on the island of Ireland. Is the fact that there is not enough of a financial incentive to base all of Aer Lingus's aircraft here a sign that the Government should be picking up on?
Mr. Peter O'Neill
It reflects our ambition that we opened a base during Covid. We saw a gap in the market and there was an opportunity for Aer Lingus to broaden its footprint. We have many aircraft joining the fleet, which is giving us an opportunity to expand the brand and bring Aer Lingus's services to more people in different jurisdictions.
Would changing the aircraft maintenance hangars not be more cost-effective than moving many of the facilities on the southern side of Dublin Airport?
Mr. Donal Moriarty
There are no hangars on the southern side. I believe there are hangars-----
I am referring to the northern apron.
Mr. Donal Moriarty
A development is planned at the north of the airport to come down towards those hangars in the capital investment programme. There are two hangars, one of which we are in. The planned development is not to come through those hangars, though, so an exit of that hangar space by Aer Lingus or Dublin Aerospace will not be required for the development to proceed.
In addition to the planned pier extension, what are required on the northern side of the runway are parking stands and serviceable stands that aircraft can park at and depart from. There is a section of that area called 5G, which has stands, some of which have not been fully activated. In addition to the pier extension, stands form part of the plan for the north, but the development's delivery is dependent upon the planning process being completed in an expedited way. At this point, though, we do not see any urgency in reaching the stage where shovels can be put in the ground.
As a follow-on to this discussion, it would be interesting if we spoke with IBEC. I am sure that the committee will consider that.
I will not put another question and will instead make a short contribution. I worry about the next five years because we have rushed back to almost being at 2019 levels and even growing beyond them. As matters stand, the airport is not capable of handling the potential numbers if the economy stays stable for the next three or four years. Terminal 1 in Dublin is awful. Anyone travelling through it will say so. It is not a nice experience when the airport's busy - there is nowhere to find a place to sit down, it is always too busy and it is over capacity. I have experienced it a couple of times this year. I saw elderly airport users struggling to get through airport security. The committee has a duty to try to tackle that situation with the DAA after its leadership change happens.
I thank the witnesses for the information, which is helpful. I hope we can keep the engagement going.
I apologise for being absent for part of the meeting and perhaps for repetition in my questions. I welcome the witnesses and thank them for being here. The most important thing we should leave the meeting today with, notwithstanding the pressures, is that Aer Lingus, while not a Government-owned airline, is still very important to Ireland and for Ireland. I hope the witnesses understand that anything we say or ask is to ensure the reputational damage that Aer Lingus, and we as a country, suffered last summer will never be repeated. I say this as a customer of Aer Lingus who will be flying with the airline in two weeks and who has flown with it already this year. I make no apology for saying that when I fly transatlantic I fly Aer Lingus. It is a personal choice because I believe in Aer Lingus and that is being honest.
I hope it is through Shannon.
Unfortunately, it is not. I wish Aer Lingus flew out of Cork. That is the honest answer. In her opening statement, Ms Embleton made reference to the issues of the construction works, the Internet service provider and the supplier. Has the construction contractor or any of the entities been named during the meeting? I missed part of the meeting.
Mr. Donal Moriarty
We named our supplier, which is Kyndryl.
I apologise for being late.
Mr. Donal Moriarty
We did not name the construction company.
Is Mr. Moriarty prepared to name the construction company?
Mr. Donal Moriarty
I named the supplier of our cloud services, which is Kyndryl.
Is Mr. Moriarty prepared to name the contractor?
Mr. Donal Moriarty
The building contractor?
Mr. Donal Moriarty
I do not know the name of the building contractor.
Is there a potential court case?
Mr. Donal Moriarty
We are engaging with our suppliers about the impact and consequences. I cannot really comment any further.
That is fair enough. I welcome the fact that there may be a court case. To be fair to Aer Lingus it needs to take ownership, which it has, and also have accountability on the other side. I thank Mr. Moriarty.
I am a bit confused, and I know I am probably in a small dilemma given that I am from Cork, when I hear Ms Embleton, Mr. Moriarty, Ms Carberry and Mr. O'Neill speak about Aer Lingus having a good summer and that it is looking to grow and wants to grow. I have a genuine question. Like Deputy O'Connor, I have a great interest in aviation. I do not see Aer Lingus having an interest in wanting to grow our regional airports. I appreciate and congratulate Aer Lingus on the Manchester and Cleveland routes but I do not see any evidence of growth or a willingness to grow. The witnesses have admitted that the short-haul fleet has reduced greatly. Aer Lingus's footprint has been hugely diminished. We can compare it to Ryanair. I accept it is a different model and I appreciate that but Ryanair did not waste the crisis or the recession. I do not see this coming from Aer Lingus. The evidence I give as an example is Cork.
Mr. Donal Moriarty
Perhaps I can touch upon Cork. This summer we had nine routes out of Cork. These were primarily for leisure. We had routes to Dubrovnik, Faro, Lanzarote, Malaga, Palma, Tenerife-----
Would Mr. Moriarty do me a favour?
Mr. Donal Moriarty
Yes.
Will he list the routes that Aer Lingus did not resume and explain why? I will give the example of Barcelona.
Mr. Donal Moriarty
Let me finish the routes we operated.
I know them all. I can tell Mr. Moriarty what they are as well. We are not having a row but I want to see-----
Mr. Donal Moriarty
We operated nine routes, including Amsterdam, Munich and London Heathrow. It really does go back to the scale of our short-haul fleet and the reduction of the fleet. The reduction of the fleet happened during the pandemic because of the impact of the pandemic on the business. We had to reduce our short-haul fleet. As we have mentioned, we had 37 directly operated or owned aircraft and it reduced to 31. Recently this was increased to 33 with the arrival of two A320neo in the past two weeks. The scale of our fleet has reduced significantly and, therefore, what we have to do as a commercial business is to deploy this fleet most efficiently and most effectively. Earlier we touched on how Dublin Airport is very important to Aer Lingus because of the connecting flow of traffic and it being a hub. Many of our short-haul services into Dublin are not just point-to-point but provide connecting traffic onto our long-haul service. As Ms Embleton outlined earlier, we are growing our long-haul services. We announced a new route last week and there will be more to come in this regard. This is why we have to make a commercial assessment of the most efficient deployment of our aircraft. This is why they are as they are at present. The good news is that the commercial assessment is an ongoing process. It is not-----
Aer Lingus's winter schedule out of Cork does not reflect this.
Mr. Donal Moriarty
Our winter schedule is reduced.
The number of aircraft has reduced.
Mr. Donal Moriarty
We have the same number of aircraft based there, which is two.
Yes, but it has gone from three to two.
Mr. Donal Moriarty
We had two during the summer and we have two during the winter. We have connections with London Heathrow three or four times daily. We have flights to Amsterdam and Munich. We have flights to Arrecife and a ski charter to Salzburg.
Yes, it is a ski trip. There are no flights to Barcelona or Rome.
Mr. Donal Moriarty
No, but this comes back to my point-----
In the past they were very well supported.
Mr. Donal Moriarty
I am not denying that but it goes back to the issues that Ms Embleton and Mr. O'Neill touched upon regarding aircraft availability and the most efficient deployment of the aircraft we have at our disposal.
It still does not add up to supporting the comment made earlier in the context of the national aviation review and the importance of regional airports. I do not see them as being considered important. Mr. Moriarty is far more competent and knowledgeable than I am but as a lay person who is a public representative from Cork and the Munster region, I have to question Aer Lingus's commitment to airports outside of Dublin. I ask Mr. Moriarty to argue with me please.
Mr. Donal Moriarty
I would say we are very committed to Cork and Shannon airports.
It does not show.
Mr. Donal Moriarty
I have explained the reason-----
If John Murphy or Mary Murphy is sitting at home on the phone looking to fly out of Cork or Shannon the options are diminishing every week.
Mr. Donal Moriarty
The options are certainly reduced from what they were in Shannon and Cork airports. This is for the reasons we have outlined, including the pressure put on our business during the pandemic. This was driven significantly by the most stringent restrictions in Europe and imposed by the Government on the aviation sector in Ireland. That played a big part in the pressure put not only on our airline but other airlines. As a consequence of the impact of the pandemic we had to make those choices and reductions in the fleet. We have ambition to regrow our fleet, as we have said.
What does that actually mean in real terms?
Mr. Donal Moriarty
We have 37 aircraft owned or operated by Aer Lingus. We had three that were on aircraft, crew, maintenance and insurance, ACMI, leasing in 2019. We were down to 31 and we are back up to 33. We have ambition to grow our short-haul fleet beyond this. Every aircraft that we add to our fleet has to be justified by a business case and it has to make commercial sense, as does the specific deployment of that aircraft.
We discussed the operations of Emerald Airlines as Aer Lingus Regional. To me it would make eminent sense to use this service for short-haul flights from Cork to the UK and cities such as Belfast.
Mr. Donal Moriarty
Emerald Airlines will make its own commercial decisions in this regard. We contracted Emerald Airlines to commence its services on 1 January 2023. It commenced them in March 2022. Effectively this was three quarters earlier than it was originally contracted to do. This is to its credit. It will make its own commercial decisions as to its route network. It has made a very strong start.
Ms Embleton or Mr. O'Neill can correct me if I am wrong, but I think Emerald Airlines has 12 routes out of Dublin and eight out of Belfast. It is performing strongly and, as I mentioned earlier, feeding our hub in Dublin and providing us with significant transatlantic traffic feed. It has made a good start and an early start, but it is its commercial decision as to where it-----
I accept that but, again, it is Dublin, as in-----
Mr. Donal Moriarty
At this point.
Yes, at this point.
I thank the witnesses genuinely for coming here to talk to us and to address us. I just ask that Aer Lingus's PR improve. It hurts us all when we see the reputational damage inflicted for a variety of reasons. None of us wants to see conflict or discommoded passengers. I ask Aer Lingus to improve its PR. On any of the flights I have had, Aer Lingus's staff have been a credit to the organisation. Its ground staff are also fantastic people whom the company should thank most sincerely because they are wonderful, likewise its cabin crew. I just want to put that on the record. We can argue the bigger picture, but it is the customer care the crew, including the ground handling crew, bring for which Aer Lingus should thank them most sincerely. I thank the witnesses again for being here.
I wish to pick up one of Senator Buttimer's points. Did the episode on 10 September, when the IT system failed, cause reputational damage to Aer Lingus?
Ms Lynne Embleton
Absolutely.
Did that manifest itself in reduced passenger numbers or in people cancelling flights? How did it manifest itself?
Ms Lynne Embleton
It was certainly incredibly uncomfortable on the day. Actually, we bounced back really quickly after that level of disruption to get-----
Aer Lingus had no forewarning.
Ms Lynne Embleton
We had no forewarning. It was three minutes past 8 o'clock on a Saturday morning. Despite the level of disruption, with flights pretty much grounded for the day, we got 98% of our schedule away on the Sunday. That was a consequence of the good work Mr. O'Neill and the team did in ensuring that the aeroplanes and the crew were in position to resume the next day as far as possible.
To answer your question, Chairman, it hurts when we see such disruption. We do not want to put our customers or our staff through it and we share your frustration about what happened on the day. Actually, we saw remarkable resilience in our bookings, and customers have continued to book with us. As I have said, we are optimistic for the future and are growing our long-haul business in particular because we have aircraft orders. As for short haul, it will take us a little time to recover from Covid but we are optimistic.
On the Saturday, how soon after getting the call at 8 in the morning was Aer Lingus made aware that there had been a fault on the backup or second line as well?
Ms Lynne Embleton
That took some time to materialise. We were aware first of all that the systems were down because we could not check people in. That is the first indication we get-----
Obviously, though, it kicked in. It pushed the capacity over onto the other-----
Ms Lynne Embleton
We asked questions throughout the morning. We were hopeful that it would be a quick fault, that there would be a flip over to the secondary line and that we would be back up and running within an hour. Had that happened, we could have contained the level of disruption. However, we were on to our supplier and it was unable to give us not only clarity as to when things would be restored but also the explanation as to what was happening. It took some time for the supplier to get under the skin of what was going on.
How long did that take?
Ms Lynne Embleton
We knew by late morning of the broken cable. Kyndryl knew the site of the broken cable. We said-----
That was for the main cable.
Ms Lynne Embleton
One question we have been pursuing with Kyndryl as part of the washup is that, while we understood its focus on trying to fix the damage, we would have liked to have seen more problem-solving on the secondary line. Those two things in parallel took Kyndryl by surprise and it focused on the primary-----
Let us say the first line was faulty at 8 in the morning. Do the witnesses know at what time the fault happened on the second or backup line?
Ms Lynne Embleton
The second never worked to its full capacity-----
I know that, but when did Aer Lingus become aware that it could not work to capacity? Fine, it is an unrelated fault, but it was a fault on the backup line.
Mr. Donal Moriarty
It was not working throughout the day, so we were aware of the fault. We were not aware of the reason for it. That came in the days after.
When did Kyndryl become aware that there was a fault on the second or backup line?
Mr. Donal Moriarty
It was aware that there was a fault on it; it was not aware what the fault was or the reason the line was not performing. That is-----
When did Kyndryl make Aer Lingus aware that there was a fault on the line?
Mr. Donal Moriarty
During the day it was obvious to us that the backup system had-----
Kyndryl did not make Aer Lingus aware of that.
Mr. Donal Moriarty
It did. We were in constant engagement with Kyndryl and were aware that the line was not working, but the precise reason for the fact that it was not working was not known to us, or indeed to Kyndryl, until later.
That is worrying. In layman's terms, did it cause Ms Embleton a degree of concern that Aer Lingus's supplier was not able to identify the fault on the backup line straight away?
Ms Lynne Embleton
Absolutely, it causes concern. As we said, we had customers in the airport, customers outside the airport and customers airside trying to get away who were all asking what was happening. It caused us and our customers concern, and we would have expected a much more rapid solution to the issue.
The witnesses are attending a committee meeting that is a public forum. What would they like to say to Aer Lingus customers about what happened and its engagement with its customers from now on?
Ms Lynne Embleton
We have apologised absolutely to our customers. It was a horrible day for them. It was a horrible day for our staff as well. They stepped up with volunteers and effort to really try to look after customers as much as we could, but the committee has heard the number of customers impacted. The staff were incredibly stretched trying to deal with the fallout from this. We have apologised completely and I do so again.
Other members has dealt with what happened on the day and the impact on the 32,000 people affected as well as the reputational impact. We are very glad we have found out what the problem was on some level. We do not have the "Back to the Future" car such that we can sort out such matters beforehand but we just need to ensure that this does not happen again.
I apologise for having been in and out of the meeting. I was attempting when I was in the Chamber to listen to some of-----
It is not in the male disposition to be a multitasker.
It is certainly not in mine. I find myself to be far more inept than most at multitasking.
I want to get the systems clear in my head. Aer Lingus uses cloud services from Kyndryl.
Mr. Donal Moriarty
Yes.
That is the first question answered. What is Kyndryl's ISP?
Mr. Donal Moriarty
It has a tier 1 Internet service provider in the UK. Essentially, what that means is that it owns its own infrastructure and does not lease or rent the infrastructure from another provider.
Then there was the construction work because of the rail tunnel works, which basically broke the line.
Mr. Donal Moriarty
Yes.
That was Kyndryl's main line into the data centre. Is that correct?
Mr. Donal Moriarty
It was the primary line.
It was the primary line, but there is a secondary line into the same data centre.
Mr. Donal Moriarty
No. It is into a separate data centre.
That is what I mean. I would have thought that Kyndryl would have had its own inbuilt redundancy for at least one line in, one-----
Mr. Donal Moriarty
No. To be clear, the second line-----
I get that. That is it. Let us say that that is cut, that data centre is out of action altogether and then the second line does not come into play. I think the term used was that a network card did not work or something as simple as that, that is, that the first machine it had to hit could not be connected or-----
Mr. Donal Moriarty
Effectively, the connection provided by the other line was available but the traffic on it failed because of a network card issue.
A network card is the component we are talking about.
Mr. Donal Moriarty
That is the component that failed. That was an extraordinary event in that the backup or secondary line failed in that way.
I accept that. I am also curious as to how Kyndryl did not catch that at the time. I assume that it has had to do a serious amount of due diligence in respect of its own systems failure.
Mr. Donal Moriarty
Absolutely. The secondary line was available but the network card failure effectively caused it not to work. Kyndryl was aware the secondary line was not operating optimally and we could not access our systems but the precise reason for that, which was the network card failure, was not immediately apparent.
Ms Lynne Embleton
Could I just add in one piece on the resilience? We have two instances of the data centres to give resilience.
Ms Lynne Embleton
We have got two lines but each line goes into both data centres.
Ms Lynne Embleton
There should have been more - it was not just one and one. The lines were replicated into both. It should have been more resilient than it proved to be on the day.
What is the network card, in layman's terms?
It is the connection on the back of the computer.
What is it in layman's terms?
Mr. Donal Moriarty
It is effectively the code that enables the access to the network to flow. That is as layman as I can put it. I do not want to stray into areas-----
Is it not extraordinary with IT systems and so forth that Kyndryl did not have its own debugging system whereby this would create a red light?
Mr. Donal Moriarty
It was not a bug. It was a card error.
Was it hardware?
It was a card error.
Mr. Donal Moriarty
It was not a bug, just to be clear.
It was hardware.
Mr. Donal Moriarty
Yes.
All right. When Mr. Moriarty says Kyndryl knew the line was acting suboptimally, how long did it take it to cop this network card problem?
Mr. Donal Moriarty
The resolution of the problem came through the restoration of the-----
Of the original line.
Mr. Donal Moriarty
-----original cable.
Mr. Donal Moriarty
Clearly, the identification of the network card issue and the resolution of that issue did not happen prior to the primary line coming back on stream.
I know. I appreciate I am asking Mr. Moriarty to answer for a service that the airline purchased in the hope of it generally working. The airline has paid the price for it.
That second line never did any work. It took up no slack.
Mr. Donal Moriarty
It did not work. It failed and what we are-----
That second line was operating at a lower capacity all the time anyway.
Mr. Donal Moriarty
Yes.
For argument's sake, if the main cable had not been cut, would the second line have gone down?
Mr. Donal Moriarty
It was entirely independent.
So it would have gone down as well. Is Mr. Moriarty saying it went down wholly independently of the extra capacity being put on it?
Mr. Donal Moriarty
Yes.
Are we saying then that any capacity it was doing, effectively, instead of picking up the slack-----
It was not working, full stop. Is that not the best way of putting it?
Ms Lynne Embleton
I will share a statistic with the committee that Kyndryl shared with me. It has 4,000 of these network cards in service. That is not with us but across its experience. This was an error that Kyndryl has never experienced in 4,000 cards.
Who would that have impacted on, in relation to that network card? I imagine it is not just Aer Lingus's information that could not be got.
Ms Lynne Embleton
It was not just us, but we are not privy to Kyndryl's other customers.
All right. Okay.
Was it happening prior to the cable being cut? Was the malfunction in the card on the other network, which was the backup network, already-----
Mr. Donal Moriarty
Certainly Chairman, it was not manifest.
I am assuming the Chairman is right that it was not working and the backup system only mattered when the primary system failed.
Mr. Donal Moriarty
It was not something that had manifested itself.
Could the main cable take 100% of the bookings going through in a normal day?
Ms Lynne Embleton
Yes.
It could. You could have a situation with the other system. Kyndryl should have been running some percentage of the customers on that system to ensure it was operating efficiently as a backup.
Mr. Donal Moriarty
It is and it was doing that, but effectively the network card issue caused a bandwidth issue. Some traffic was flowing through that secondary line and flowing successfully, but it was very little. It was the network card issue that caused a significant reduction in bandwidth.
It was down to a low capacity. When Kyndryl suddenly put all the extra traffic on it, did that cause what was maybe a wearing issue?
Mr. Donal Moriarty
No. It exposed the fact there was limited bandwidth on that secondary line as a result-----
Therefore, there was still some activity going through that secondary line.
Mr. Donal Moriarty
Yes.
Although very little.
Ms Lynne Embleton
I will provide members with another quote we have had from Kyndryl. It said it was the first time this network card error occurred in 140 million hours of usage.
All right but-----
Ms Lynne Embleton
I would therefore say it is an exceptional circumstance.
As Ms Embleton will appreciate, that is not much good to the 30,000 Aer Lingus passengers who were discommoded.
Ms Lynne Embleton
We test both data centres. We do not sit on one waiting for failure. We switch between them and that is normal best practice as well. When we have done that in the past, it has done what it is meant to do.
Aer Lingus is entitled to rely on its suppliers. What happened here ultimately was the second line, which was to be the backup line, should typically have been running some volume of customers to ensure it was fit for purpose such that if the main system went down it could switch over. The irony of this is that it was limping along on a quarter of a tank long before the main system cable went down. When Kyndryl switched over, the airline suddenly found it had, dare I say it, a pipe that was itself broken. You could not make it up, in fairness.
Ms Lynne Embleton
We would not have expected it.
Ms Embleton said something earlier about there being just one line in. There should have been a greater level of resilience-----
Ms Lynne Embleton
No. We have two data centres.
Ms Lynne Embleton
We have got two lines.
Ms Lynne Embleton
Each line goes to each data centre.
Ms Lynne Embleton
That amplifies the resilience we had.
It should provide it.
All right. I accept that. I thought she meant something else. There was talk at one stage about the tertiary backup.
Mr. Donal Moriarty
The steps that have been taken following the failure of the backup line are to monitor the specific type of failure that occurred.
The company itself is doing that, I imagine.
Mr. Donal Moriarty
Our provider is doing that.
Mr. Donal Moriarty
So that is in place. That should prevent a reoccurrence of this incident and that is in line with best practice. We are looking at the implementation of a tertiary system, the shape of which we do not yet know, to provide additional resilience over and above best practice.
That is absolutely vital. I thank the Aer Lingus officials. I made them repeat themselves but now I at least have it clear in my head, at the same time as I should be in the Dáil.
I have one last point. When people talk about regional airports, it is thrown back on the airline. A number of witnesses who have appeared before us have said that until such time as what people term "national strategy" or "State strategy" changes, there will not be any major change. I mean that in the sense that if Dublin Airport loses slots, it loses them to Munich or wherever else. The regional airports will not be players until the Government changes the nature of how the system operates. Is that fair to say? We can talk forever about Shannon Airport and Cork Airport, etc., but they are never going to be employed as part of a wider solution alongside Dublin Airport until a determination is made at governmental level. I am just asking for the Aer Lingus officials' view. Maybe it is an unfair question.
Ms Lynne Embleton
I made the point earlier that if there is point-to-point demand or local demand from regional airports to destinations and vice versa, those routes can be profitably served. The role of a hub is different. It is a big home market bringing connecting traffic to enable more routes. It is kind of an exponential effect. We should be proud of the Dublin hub and should be doing everything we can to grow it and its infrastructure. I do not see that as competing directly with the regional airports. It is about the regional airports having the demand to justify point-to-point services, and then you have to find aircraft year-round and not just for the three months of the summer peak, which is something else we discussed earlier. As we discussed earlier, it is about whether that is something that Emerald Airlines would want to operate in its own right with a small aircraft, or if the point-to-point demand is large enough for the jets to operate. It is primarily around the demand coupled with the connecting benefit you get from a hub.
All right. I thank the officials. I need to run.
I will follow up with a couple of points. When does the airline expect to have this tertiary service, the other backup, in place?
Mr. Donal Moriarty
We are scoping it at the moment. We do not have a specific timeline but we are working on it urgently.
Ms Lynne Embleton
What we are looking at is a third link to each of our data centres.
Therefore, instead of having four cables into it, two and two, the airline will now have three.
Ms Lynne Embleton
Yes, giving six combinations.
That is to be welcomed. To clarify so that I am clear in my head, 32,000 people had their flights cancelled. Of these, 21,000 were looked after within 72 hours, leaving 11,000 passengers, of whom 7,500 have come forward for compensation and 6,800 of them have been compensated, leaving roughly 700 yet to be compensated. That leaves 3,500 of the 11,000 people. Who are they?
Ms Susanne Carberry
They are not the same. Of the 32,000, there were 21,000 on delayed flights and they travelled at some point-----
Within 72 hours.
Ms Susanne Carberry
Actually, they probably travelled within the next 24 hours. The balance of 11,000 people were booked on flights which were cancelled. We accommodated them on other alternative services, probably within the next 72 hours according to our data.
How many of them?
Ms Susanne Carberry
We do not know exactly but the vast majority is what I can see from my data points.
Yes.
Ms Susanne Carberry
Completely separately then, we have 7,500 compensation applications. Bear in mind each application could have one passenger or it could have two or three. They are completely separate.
In regard to those who were entitled to claim under that, did that apply to the full 32,000 people?
Ms Susanne Carberry
For some of them, yes, if they were delayed for extended durations. The vast majority were people booked on flights that were cancelled and decided not to travel on the day.
Has a deadline date been set for people to submit claims on this?
Ms Susanne Carberry
There is no deadline date. Once they come in, we will expedite them as soon as we can.
I thank Ms Carberry. That gives clarity. I was misinterpreting the figures. The vast majority of the 11,000 people were accommodated with flights, probably within 72 hours, and overall, 7,500 people have put in claims, of whom 6,800 have been compensated so there are roughly 700 left over.
Ms Susanne Carberry
That is correct.
When last before us Ms Embleton brought up in connection with Dublin Airport the number of hours in advance people needed to arrive at the airport. Are the hours people are required to be at the airport in advance back to normal for people intending fly?
Ms Lynne Embleton
It has certainly improved but we are not back to normal. As mentioned earlier, we want people to be able to do short business trips with confidence. Relatively speaking, Dublin Airport is the airport we cover. It had a bad day and a bad period but it improved significantly over the summer. Dublin Airport probably improved faster than other airports to which we operate routes. In regard to the specifics on the report, the advisory times stood up.
The advisory times were brought up previously. Obviously, we are trying to exit Covid-19 but we are still-----
Mr. Peter O'Neill
The advisory times have gone back to what they would have been before the issues emerged. The difficulty is that passenger perception has not gone back to that. That presents a difficulty and will take a little time to wash out.
It is a public awareness campaign.
Mr. Peter O'Neill
Exactly. People need to become comfortable that they will be processed efficiently.
As a public representative based in Limerick, Shannon Airport is important to me so I want to get an understanding. We are going to do a module on national aviation policy. We see nationally that all airports have increased their passenger numbers but Dublin Airport's numbers have increased exponentially faster. As a result, its market share overall has gone sky-high. Shannon and Cork airports have substantial additional capacity. Shannon Airport is a good example. It can take 4.5 million passengers a year. At peak, it had approximately 1.7 million passengers in recent times. I am not totally certain about the Cork Airport numbers. I want to understand the hub system. In regard to the transatlantic flights out of Shannon Airport, will Ms Embleton and Mr. Moriarty explain how many passengers come through hubs? For example, how many come through Heathrow?
Ms Lynne Embleton
The vast majority will be point to point. This is the nature of the hub. You can take three, four or five passengers from many different short-haul flights and bring them together with the local market and then you can justify a point-to-point long-haul service.
Is it naive to say the airline seeks to bring people from the UK or wherever to a hub in Shannon Airport and then fly them out on transatlantic routes? From where are the people being routed through Dublin Airport coming?
Ms Lynne Embleton
I will give some rough statistics. It varies significantly by route. More than a third of passengers on a long-haul flight are likely to be connecting.
Is that in Dublin Airport?
Ms Lynne Embleton
That is generally. In some airports actually, for example, Munich, it could be much higher so that 80% could be connecting in some hubs. On short haul, because of the difference in numbers and aircraft, between 10% and 20% of the customers on that flight will typically be connecting. It requires a significant local demand for short haul to fill enough with point-to-point passengers and this number is topped up with transfer passengers. These transfer passengers are gathered up from all the different routes and that helps to justify a new long-haul service. The hub dynamics are really quite exponential.
If Shannon Airport had a hub to somewhere like Amsterdam, Frankfurt or Charles de Gaulle airport, would it make it more attractive as a hub for airlines such as Aer Lingus?
Ms Lynne Embleton
It comes back to the exponential point of hubs. This is why so many hubs around Europe have four runways. Hub dynamics are different from point-to-point dynamics. If there is a short-haul and a long-haul service at the same airport, as we do in Shannon and at Heathrow, some customers may choose to go that way. To build a whole system around that requires a strong local market in a hub airport.
Ms Embleton referred a number of times to the hub out of Dublin Airport. Will she give me an example of what flights are routed through the Dublin hub?
Ms Lynne Embleton
Typically, more than a third of passengers travelling on our long-haul network will have come off a collection of short-haul services.
Would they be Aer Lingus short-haul services or those of other airlines?
Ms Lynne Embleton
I am talking only about Aer Lingus. The other dimension that makes the network model work and indeed more complex is that we also have partnerships and co-share and interline flights, so we are using other carriers to feed that network as well.
It is a combination of having short-haul flights arriving coupled with serious connectivity, both European hub and long-haul connectivity.
Ms Lynne Embleton
It requires sufficient local market as well.
Therefore, if operating out of an environment where the local market is not enormous population-wise, that makes it more difficult.
Ms Lynne Embleton
It certainly makes a successful hub unlikely if the local market is not big enough. That is where the regional and point-to-point services come in.
Will Mr. Moriarty describe how he sees the future of Aer Lingus in Shannon Airport? I was first elected to Dáil Éireann in 2007. My first political encounter was when the Aer Lingus Heathrow slots went from Shannon Airport. That was my first introduction to national politics. This has always been an issue. Historically, Shannon Airport had the Shannon stopover. Where does he see this feeding in? Aer Lingus is such an integral part of Shannon Airport and its future. It provides Heathrow connectivity, which is vital, and also the transatlantic connectivity. The committee is going to do a piece on aviation. We will have airlines, including Aer Lingus, before us again. We will issue an invite later in the year. I want to understand in a proactive way where Mr. Moriarty sees Shannon Airport in Aer Lingus's future plans. Is there something that could be done that would enhance and grow that relationship?
Mr. Donal Moriarty
To refer back to the pandemic when we had to cease all operations for Shannon Airport-----
That hurt at the time.
Mr. Donal Moriarty
Yes, and it had to be done for obvious reasons. We were keen to restore that core connectivity of transatlantic services to JFK and Boston and to restore the London Heathrow service, which we did. As we mentioned, those services have operated well.
Are they operating at good capacity?
Mr. Donal Moriarty
Over the summer, the transatlantic routes out of Shannon Airport were very strong.
What about Heathrow?
Mr. Donal Moriarty
It was similar over the summer period. Our commitment to Shannon was really demonstrated by our determination to restore those services after the pandemic. The steps we took during the pandemic to make sure we could restore them were equally important.
What were they?
Mr. Donal Moriarty
A number of Deputies asked me about the cabin crew base. We had to make the decision in that regard to enable us to make a decision to resume and restore the services, which are important to Aer Lingus and equally important to the mid-west.
With regard to our future at Shannon Airport, we certainly envisage our commitment to the transatlantic and London–Heathrow routes being maintained, but it comes back to the point I was making to Senator Buttimer. With regard to the deployment of additional short-haul aircraft we take into the fleet, we have to assess where those aircraft are best deployed from demand and commercial perspectives.
We engage very closely with Shannon Airport and its leadership team. It is very proactive in seeking to provide supports from airport charges and marketing support perspectives. We work very well with the team. We will continue to assess this but I believe we have demonstrated our commitment to Shannon Airport by the restoration of the routes. We will look for opportunities, as we always do, but we are constrained by the issues I mentioned.
How do the numbers of long- and short-haul aircraft before the pandemic compare with the current numbers?
Mr. Donal Moriarty
From a transatlantic perspective, I think the number is exactly the same. Is the Chair talking about Shannon Airport specifically?
I am talking generally.
Ms Lynne Embleton
With regard to the mix, we have reduced short-haul and grown long-haul services.
Is that a strategic decision?
Ms Lynne Embleton
On the growth in long-haul services, we had made the commitments, and we had already made the orders. On short-haul services, it was a matter of retiring aircraft at the end of their leases, given the particular financial circumstances we were facing during Covid.
How many long- and short-haul planes are coming on stream?
Ms Lynne Embleton
We have six A321XLR aircraft, which are intended for long-haul use. They are narrow-bodied aeroplanes with a longer range than the ones we have today. They will give us more opportunities.
For short-haul-----
Are they so-called neo aircraft?
Ms Lynne Embleton
They are. We also have two short-haul neo aircraft, which have just been delivered. On short-haul services, we are not considering growth alone because we also need to replace the aircraft we have. The impact of the pandemic was such that we were losing €1 million per day, with a swing in finances of about €1 billion. My first priority is to secure replacement aircraft and make a business case to replace the short-haul fleet. Then we will look to growth. We took an opportunistic view of the aircraft that became available – the two aircraft we brought into the fleet over the past weeks – but we have to replace our short-haul aircraft as well as grow the fleet.
How much lower is the number of short-haul aircraft by comparison with the number before the pandemic?
Ms Lynne Embleton
We had 37 of our own plus three ACMI-leased aircraft, giving us an operating fleet of 40. We now have 33.
Therefore, there are seven fewer. Is Ms Embleton including the two in the 33?
Ms Lynne Embleton
I am.
When growing short-haul services, when will the number return to 40?
Ms Lynne Embleton
That will be a few years away.
How many long-haul aircraft were there before the pandemic?
Mr. Donal Moriarty
I have the numbers. At the start of 2020, we had 19 long-haul aircraft. We currently have 23. We have eight A321neo aircraft, 12 A330-300 aircraft, and three A330-200 aircraft.
Obviously, there is an integrated model in Shannon. It entails the short-haul flights to Heathrow and the long-haul or transatlantic flights.
My final question has been alluded to by some of my colleagues. If there were a PSO route between Shannon and Amsterdam, Frankfurt or one of the major hubs, would it be regarded by the representatives as commercially viable in the long term? Would they consider it?
Ms Lynne Embleton
We would consider it. To return to my point on seasonality, pretty much any aircraft can be filled in July. In purchasing an aircraft, you need to be sure there is sufficient income over the course of the year to justify it. That is what we would have to consider.
Is it something Aer Lingus would be willing to consider?
Ms Lynne Embleton
We would consider it.
I thank Ms Embleton, Mr. Moriarty, Mr. O'Neill and Ms Carberry for attending. I wish them well with the tertiary element and getting the third service back in place. They might let us know when this happens. It has been a difficult time for the 32,000 passengers and the staff.
I thank the representatives for attending. It was important. We will be doing work on aviation. Aer Lingus is the national carrier and we regard it as fundamental in driving national aviation policy. We look forward to seeing the representatives again in the not-too-distant future. I thank Ms Embleton and her colleagues for assisting the committee today with this important matter.
The joint committee adjourned at 4.06 p.m. until 1.30 p.m. on Wednesday, 12 October 2022.