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Aer Lingus blots its record in key US market

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For Aer Lingus, the jewel in the crown is its transatlantic business. And with Irish tourism relying increasingly on high-spending North American visitors that’s not likely to change.

While the airline’s routes to New York, Boston and Chicago are its most high profile, it flies to a wide number of US cities, and continues to expand its North American network.

And in the land where the customer is king (or queen), the last thing “Ireland’s favourite airline” will want is bad press.

Unfortunately, it has recently found its way on to the pages of the New York Times for all the wrong reasons.

As the paper reports, a Ugandan citizen travelled without incident from Amsterdam to Newark, via Dublin only to be refused boarding at Newark on their return journey. Agents acting for Aer Lingus told the passenger that she needed a transit visa for the Irish stopover, which she did not.

The passenger said she even showed the agent the Irish Government web page listing those countries whose citizens require a transit visa, a list that does not include Uganda.

Worse still, the New York Times recounts that when the passenger complained after having to fork out $964 (€821) to fly one-way direct to Amsterdam with KLM, the airline failed to respond to written complaints or phone calls for almost three months.

It only reacted when the paper got it touch, at which point the New York Times reports, it quickly – if very belatedly – accepted its original mistake, immediately offering to reimburse not only the $964 but also the €600 the passenger was entitled to for having been denied boarding and some additional costs related to the disruption.

Aer Lingus has form here, dating back to Covid when international travel was grounded. Once again, the big issue was the inability of disrupted passengers to get a reply from the airline in any reasonable time frame, never mind organising refunds or rebooking.

There have been other customer issues since then, including one reported on by Cantillon’s colleague Conor Pope which a reader described as the “worst customer service experience of my life”.

The latest mea culpa shows the airline still has much to learn about customer service. If it’s serious about growing its American business, it can’t afford to ignore customer complaints.

Business

How a cyberattack brought Dublin Airport to a standstill

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In May 1940, the Maginot Line failed. France’s series of defences were bypassed by the Wehrmacht through the Ardennes. That France hadn’t factored in Germany’s ability to bypass their defensive system is often derided.

The thing is, in a manner of speaking, they did plan for it. There were communication exchanges along the line in order to quickly relay information to the rest of the French forces.

What the French army didn’t plan, granted amongst many other things, was sabotage. The Wehrmacht sabotaged the telephone lines so that their panzers (tanks) were already through the line before any reaction could happen.

Fast forward to the weekend just gone and airports across Europe, but most notably Terminal 2 in Dublin Airport, stalled because of an issue most travellers didn’t think of from a supplier they hadn’t heard of.

The Muse check-in system developed by Collins Aerospace was the overlooked weak point in this instance. Passengers were frustrated by airport operator DAA and Aer Lingus when most of their ire really belong with a company they hadn’t heard of which is trusted far beyond these shores.

Collins, which is a subsidiary of RTX (formerly Raytheon), was hit by a ransomware attack. This led to check-in systems either going offline fully or slowing to an unusable crawl. This forced airlines, most notably Aer Lingus as the largest operator in Terminal 2, to go back to basics.

Bag tags were hand written, boarding passes were printed manually and everything slowed down considerably. The result was delays across the board as well as cancellations. The invisible plumbing that keeps air travel going only comes to the fore when something goes wrong.

Dublin Airport continuing to manage fallout from cyberattackOpens in new window ]

These are also the most likely points for such an incident to occur. If Visa or Mastercard suffered a severe cyberattack, you’d understand that making payments would become difficult.

It’s the same for Collins Aerospace and airport management, when they were hit then every airport using their services along with the passengers going through it felt the pinch.

The only difference is that you’ve heard of Visa and Mastercard and thought Collins was a dictionary company. More often than not, the point of failure comes in a company with the importance but lack of public profile of Collins.

It’s also a matter that is being addressed, albeit with a lot of heavy lifting, by the European Union. The NIS2 directive and, to a lesser degree in cases like these, the Cyber Resilience Act (CRA) are squarely aimed at ensuring the organisations you have heard of, like DAA, are using third party companies that meet clear thresholds for cyber resilience.

It extends security expectation across the supply chain, removing the excuse of the big brand blaming a third party supplier for the error. That big name, the one ostensibly providing the service like DAA and Aer Lingus were, is expected to have ensured its third party suppliers are fit for purpose.

NIS2 was meant to have been signed into law by all EU governments by October 17th, 2024. Ireland, like quite a number of other member states including France and Germany, is still running behind on transposing it into national law.

Had NIS2 been in place on time, then any company or organisation using Collins Aerospace’s products would have been required to check that these products met certain cyber hygiene requirements and that the contracts therein met certain ongoing cybersecurity standards.

There’s a reasonable chance DAA already did this, despite not being required to, as it and others impacted alerted the relevant authorities quickly about the issue. That wasn’t particularly difficult given how visible the fallout was. It can also be assumed that Collins’ product met the required cyber hygiene standards.

Area 14: Dublin Airport’s ghost underground stationOpens in new window ]

Where the likes of NIS2 and the CRA, which is also still in the processing stage, would have definitely made a difference is in fallback measures. The level expected is high and this past weekend’s disruptions would likely have been far less in such an instance.

That’s because of the penalties at play when it comes to not meeting NIS2 requirements, which can go as high as €10 million or 2 per cent of global turnover in some cases. It’s the type of stick that puts manners of organisations.

The incident at the weekend was for air travel passengers but the world we live and work in today is heavily reliant on invisible companies. That’s not a bad thing. An awful lot of the work these companies do is incredibly boring despite being vital to basic day to day activities.

Improving oversight on important boring work is the only way to reduce future incidents like what happened in Dublin last weekend.

The French likely would still have been in a world of bother without their phone lines being sabotaged but it’s still dreadful that they didn’t account for such an attack back in 1940.

By 2025, we should know better than to allow core pieces of infrastructure to be so vulnerable to attack.

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Loss of 520 retail units drives State commercial vacancy rate to record high

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The loss of 520 units in the retail and wholesale sector was the main driver as the rate of empty commercial properties across the State climbed to a record high of 14.6 per cent in the second quarter, new data shows.

A total of 30,800 commercial units were classified as vacant in buildings data group GeoDirectory’s latest commercial vacancy rates report. The analysis, prepared by EY, found the rate increased in 17 out of 26 counties compared with a year earlier.

All sectors witnessed a decline in the number of commercial units, with the exception of industry, which covers activities like manufacturing, water supply, and construction.

The largest proportion (46.6 per cent) of this decline was attributed to the retail and wholesale sector, which suffered a loss of 520 units, followed by the services sector which suffered a decline of 325 units.

Looking within the services sector, the accommodation and food services sector had a total of 22,061 commercial units in June. That represents a decline of 150 commercial units compared with the same period in 2024.

The highest proportion of accommodation and food service units were found in the west of the country, accounting for 23.8 per cent of all commercial units in Kerry, 20.4 per cent in Clare and 19 per cent in Donegal.

The highest commercial vacancy rates continue to be found in the west of the country with Sligo, at 20.8 per cent, recording the highest proportion.

Donegal recorded 20.3 per cent, Galway with 18.7 per cent, Leitrim with 18 per cent and Limerick at 17.9 per cent rounded off the top five counties with the highest rates.

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The starkest increase in rates was again seen in Donegal where there was a 0.9 percentage point increase, bringing about a vacancy rate of 20.3 per cent.

Meath, at 10 per cent, was the county with the lowest rate. It is followed by Wexford with 10.6 per cent, Westmeath with 12.2 per cent, Kerry at 12.2 per cent and Cork followed closely after with 12.5 per cent.

Republic’s commercial vacancy rate hits highest level on recordOpens in new window ]

The rate in Dublin was 13.9 per cent, which was a 0.6 percentage point increase compared to the previous year.

Breaking the capital’s data down by postcode, Dublin 2 was the area with highest rate at 18.4 per cent. It was followed by Dublin 8 at 17.4 per cent, Dublin 3 at 16.7 per cent and Dublin 9 at 16.5 per cent.

Meanwhile, Dublin 15 had the lowest rate at 6.8 per cent, followed by Dublin 16 at 7.7 per cent and Dublin 20 at 8.4 per cent.

Of the 80 main towns and urban areas surveyed nationally, Ballybofey, Co Donegal, registered the highest rate at 33.7 per cent.

Shannon, Co Clare, moved to second place from third previously with a vacancy rate of 30.8 per cent, followed by Boyle, Co Roscommon, at 29.8 per cent.

At the other end of the scale, the towns with the lowest vacancy rates are Carrigaline, Co Cork, at 5.1 per cent, and Greystones, Co Wicklow at 5.5 per cent.

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Scale back spending or risk overheating economy, ESRI urges Government

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The Government has been warned to scale back spending or risk overheating the economy.

In its latest quarterly bulletin, the Economic and Social Research Institute (ESRI) said the Government’s fiscal stance, including the proposed €9.4 billion budget for next year, was adding to demand pressures at the wrong time in the economic cycle.

This could be damaging in the long term “if capacity constraints or cost inflation” prevent the full delivery of the National Development Plan (NDP), it said.

“Ideally the Government should be running a surplus when you adjust for the windfall taxes,” the ESRI’s Alan Barrett said.

“In order to do that you would be looking at scaling back expenditure or raising taxes something of the order of €8-€10 billion, rather dramatic numbers,” he said.

“The adjustment overnight would have almost an austerity look and feel about it and I don’t think that’s entirely appropriate fiscal policy either,” he said.

“What’s required is a moderation in growth [in spending] over time and a targeting of a [underlying] budget surplus … but to kind of glide to it over the next three, four or five budgets,” he said.

Mr Barrett said the Government needed to have a “credible” medium-term fiscal strategy.

The ESRI’s warning comes on the back of a similar one last week from the Central Bank, which claimed the additional expenditure being proposed in Budget 2026 was “too large” and “unnecessary”.

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In its latest assessment, the ESRI predicted the economy here would grow by 8 per cent this year in gross domestic product (GDP) terms against a previous projection of 4.6 per cent.

The upgrade for 2025 reflected the “large increase in exports” at the start of the year as firms, particularly in the pharma sector, stockpiled produce in the United States ahead of expected tariffs.

GDP growth is expected to fall back to 2 per cent next year, a downgrade on the previous estimate, as exports moderate in the face of tighter trade conditions.

The ESRI said the European Union-US trade deal, which applies a 15 per cent tariff on most EU exports to the US, had “removed a considerable amount of uncertainty from the economic landscape”.

“While this agreement reduces uncertainty in the short term, the new situation of a 15 per cent tariff represents a deterioration in our trading environment, and will likely be impactful for many firms and sectors,” it said.

In its report, the ESRI noted that while headline inflation had moderated considerably and would contribute to real wage growth, grocery price inflation remained elevated – at 5 per cent – presenting a cost-of-living challenge for many households.

It also questioned the Government’s opposition to the proposed Mercosur trade deal.

The institute said the EU’s trade deal with South America was predicted to increase GDP by 0.13 per cent out to 2035 while having only a minimal impact on beef production.

“At a time when economic policy should be directed towards protecting and enhancing free trade, it seems counterproductive to be opposing free-trade agreements,” it said.

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