Yesterday, Dermot Mannion,chief executive of Aer Lingus, announced that Aer Lingus had signed a strategic partnership with US low-cost carrier Jetblue. According to Mr Mannion this deal "will enable us to grow our revenues and grow passenger numbers" and additionally "introduce the Aer Lingus brand to new markets". The Irish Times headlined this today as "US deal to open 51 routes for Aer Lingus" and Reuters headlined the same story as "Aer Lingus forges ticket alliance with Jet Blue".

On hearing and reading this one would be forgiven to believe that this was a positive "strategic partnership" that would enhance the Aer Lingus brand and add value to the company and its shareholders. From what I have read the deal is'nt even signed, as negotiations are on-going. Asked if Aer Lingus had put together any projections on future passenger growth and therefore revenue? the answer was "no, not at this time".So, it would appear that according to Mr Mannion, Aer Lingus will grow but it will have nothing in place to assess or analyse the effect of this decision. This is beginning to resemble Enron, when its management felt that having a balance sheet was'nt necessary.

On further examination it would appear that the "deal" is simply placing buttons on each others Websites allowing access to each other. Very strategic?.Indeed the announcement also seemed to catch Jetblue off guard who went on to say "that no deal had been agreed, and negotiations were ongoing". When this was put to Mr Mannion he conceded that "there were details that still need to be worked out". Apparently these details include, revenue sharing arrangements and various customer services issues including checking in luggage in Ireland to final destinations in the US and elsewhere. This should prove fun given that Jetblue's model is one that we are all familiar with, ie Ryanairs. I can see us all arriving in Bermuda without any luggage.

Another aspect that was'nt reported in Ireland was that Jet Blue "is still in partnership talks with other international carriers" so should this deal with Aer Lingus go through and Jet Blue also signs similar agreements with other carriers, I have a feeling that capacity will become an issue.

This is bad management, Aer Lingus could find other ways of increasing its revenue by simply increasing its load factor on it transatlantic flights from its present, and declining 80.6% to say 85% would increase its passenger numbers by almost 55,000 passengers. If you use an average return fare of €500 this would equate to €27.5m, and it would the management that would control this strategy, and it will not depend on an outside third party for growth.It may also cost justify the two new 315 seater aircraft that will be on the transatlantic routes later this year. Analysts believe that should this deal go through there will be no increase in revenue for Aer Lingus.They also believe that Aer Lingus should be focusing on the competition that is invading its space in the form of American, Delta, and now Flyglobespan operating from Knock, which by the way needs to be applauded, and shows what can be done with proper strategic thinking.

I can't help feeling that the Management of Aer Lingus is out of its depth in managing this company, it is making profits due to the work put in by former CEO Willie Walsh and his team. The present Management appear to be falling from crisis to crisis,  it became embroiled in another row with unions last week on its cost cutting plan it emerged that the business plan that was finalised days before flotation 4 months ago, is now not worth the paper its written on. I wonder how many investment houses are scratching their collective heads now asking "have we been sold a pig and a poke?". Class action law suits are not uncommon when these things happen.

Aer Lingus share price is presently about €2.91, a valuation that I believe has a Ryanair premium embedded, and valuations for its slots, for example in Heathrow, justifying the price. If Mr Mannion et al d'ont start doing some hard work and stop announcing "incomplete deals" I can see Aer Lingus been broken up and sold off, in a similiar way Eircom was broken up and had 4 new owners in 8 years.I feel the loss felt this time should Aer Lingus go the same route will not be confined to small investors but to all of us as a whole.

I wonder then what will happen to the consumer when Aer Lingus is no longer with us?