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Tuesday, 23rd April 2024
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Eye on the books: A Day in the Life of the Group Finance Director of Aer Lingus
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John O'Donovan on the cut and thrust of funding Aer Lingus' fleet and hedging its risks
.5.50am.
The alarm goes off like Big Ben and I wonder if I have an early morning breakfast meeting in town (a real treat as it means not only breakfast but an extra hour's sleep) or if I am facing the Rock Road and the lunatic truck drivers off the Dun Laoghaire ferry. In a previous existence, when I worked for the foods division of Grand Metropolitan (now Diageo) in a rural West Cork setting, I used to enjoy a pleasant drive and the greatest challenge was avoiding farmer O'Sullivan's herd of cows heading for the milking parlour along a country road. Now I struggle to hold my nerve in the Dublin traffic while listening to John Creedon's early morning jibes about the exploits of Cork City. (I would far prefer it if he spoke about the exploits of Cork in yesterday's Church & General National Football league game against Donegal).

.7.00 am.
Hit the airport roundabout with heavy traffic heading for early morning flights (hopefully on aircraft with shamrocks on their tails) and craftsmen heading for their 07.00 hours early shift start in TEAM.

.7.05 am.
Check voice mail, e-mails and fax messages and wonder do the lawyers really
wait in their offices so they can send these faxes throughout the night? It is a good feeling to get yesterday's left over paperwork dealt with and get a move on to today's. Papers for a Group Board meeting and various sub-Committees of Board need to be finalised over the next four or five days and I draft the outline which I need to agree with the chairman and group chief executive.

.8.00 am.
Quarterly risk management meeting chaired by chief executive with attendance by our group treasury people and our purchasing director. The main topics of conversation are our pound sterling and US dollar exposures together with world oil prices, which have hit a 12 year low as a result of some Asian flu and the inability of OPEC Ministers to agree on lower production levels. The aviation industry being fundamentally a US dollar based industry, this leads to a long discussion on the wisdom of further covering our dollar deficit positions into the next millennium.

Our position on the introduction of the euro on 1 January 1999 is discussed at length not only from a banking/funds management perspective but also from a customer perspective in terms of our ability to do business in the euro in 1999. Aer Lingus aims to be a 'euro friendly' company and significant resources have been invested in our euro project over the past two years.

The issue of Year 2000 compliance is discussed at some length. Aer Lingus has had a Year 2000 project group actively working since the last quarter of 1996 and all major systems are now compliant. The issue of airline services on 1 January 2000 has again received press coverage in recent weeks - Aer Lingus will be flying full services on 1 January 2000.

.9.30 am.
Sit down with colleague Marie Dalton (she really runs the show) and discuss operational matters and what needs to be addressed today and any outstanding matters from yesterday.

.9.45 am.
Meeting with group treasury people, operations and purchasing directors to review our fuel hedging position in light of the current very low spot prices. The debate highlights the fact that the world price continues to fall, even allowing for the uncertainty relating to Iraq. Various financial instruments are discussed and we agree a way forward which gives us the benefit of a falling market and protects us on the upside.

.10.30 am.
Meet my finance team to discuss issues which are relevant to our upcoming year-end and agree the timetable for accounts preparation, audit thereof and subsequent publication. We expect to have a planning meeting within the next week with our audit partner and then a presentation to the Board Audit Committee in mid-December. I am briefed on the latest raft of FRS 1s and thank my lucky stars that I am not back in my student days in Craig Gardner. We set a tight year-end timetable which we are confident will be achieved if we all put our shoulders to the wheel.

.12.15 am.
Meeting with fleet planning personnel and our group treasurer to review progress being made on medium-term fleet planning issues. The airline has embarked on a major fleet rollover programme and we discuss means of maximising the value of aircraft exiting the fleet as new aircraft are introduced. Progress on financing arrangements for a new A321 (198 seat aircraft) for our London/Heathrow route is satisfactory and we expect to be able to complete the transaction within the planned timescale. The relative pros and cons of financing aircraft by the use of leveraged leases are discussed and general discussion follows on the current market appetite to arrange such financing.

.1.30 pm.
While eating a sandwich at my desk I have a conference call with the lawyers advising on the Group's exit from our maintenance activities together with the environmental expert who is advising on aspects of the deal. This deal has been a somewhat drawn out process but we now see light at the end of the tunnel and are on course to complete two transactions in mid-December.

.3.30 pm.
Pick up on my phone messages and deal with those which require a return call while signing off on a number of legal documents and certificates.

.4.00 pm.
Meet our group chief executive and strategy director to discuss progress on some strategic issues relating to the Group. The aviation industry is rapidly changing and consolidating and we are in the process of assessing some issues relating to the possibility of the Group entering into a major strategic alliance.

.5.30 pm.
Meet the chief executive of our maintenance subsidiary, TEAM, and discuss progress on the final stages of the due diligence process relating to the sale of the business. Meet the wider TEAM management group to discuss disclosures relating to the warranties in the deal.

.6.15 pm.
Finalise inputs into the papers for the forthcoming board meeting.

.7.30 pm.
Call it a day and on turning on the radio, listen to Jimmy Magee listing out some Irish rugby greats of the past. Being a Gaelic games guy this is a step too far for me. I switch off the radio and the mobile, light a Hamlet and head home to Eileen, Fiona and Barry in Blackrock.

John P. O’Donovan, B.Comm, FCA, is Group Finance Director and Company Secretary of Aer Lingus.
He was appointed Group Chief Financial Officer of The Governor and Company of The Bank of Ireland in November 2001, and serves as a Member of its Court. He also serves as the Group Chief Financial Officer of Bank of Ireland at Bristol & West PLC

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