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Chief of Struggling Aer Lingus Resigns

PARIS — Dermot Mannion resigned Monday as chief executive of Aer Lingus, ending a four-year tenure during which he took the Irish airline public and battled to keep it out of the hands of an aggressive rival, Ryanair, but also failed to lift its share price.

“My decision to step down will allow a new C.E.O. to bring fresh thinking and new ideas to the business,” Mr. Mannion, 50, said.

The management change potentially opens the airline to a change of direction, as airlines look for ways to surmount the economic crisis that has sapped revenue and raised costs. The international air transport body, I.A.T.A., forecasts that the industry will post a collective loss of $6.3 billion this year.

The departure of Mr. Mannion, who joined Aer Lingus from the Middle Eastern airline Ethihad, was effective immediately, the airline said. Colm Barrington, chairman of Aer Lingus, will assume Mr. Mannion’s duties until a new executive is found.

On Monday, shares in Aer Lingus rose 7.5 percent. Under Mr. Mannion’s leadership, Aer Lingus fought off two hostile takeover efforts by Ryanair.

Yet as the airline industry battled oil price swings, economic downturn and relentless competition, Aer Lingus shares failed to rally.

Investors were especially disappointed when Aer Lingus’s 2008 loss of 108 million euros, or $145.8 million, was compounded by a forecast that dashed any hope of a pretax profit this year.

Ryanair, which remains the largest shareholder in Aer Lingus with a 29.8 percent stake, declined to comment Monday. The aggressive low-cost carrier is barred by stock market regulations from making another bid for Aer Lingus for a year after withdrawing its latest offer on Jan. 22. Ryanair itself has said it would not come back a third time.

The discount airline EasyJet also announced Monday that it had appointed Michael Rake, the chairman of BT, as deputy chairman. EasyJet’s chairman, Colin Chandler, is stepping down July 1.

EasyJet’s management has clashed with the budget airline’s founder and nonexecutive director, Stelios Haji-Ioannou, over expansion plans during the economic crisis. The airline’s management has since rallied to the point of view of Mr. Haji-Ioannou, whose family owns 38 percent of the company.

The airline has reined in capacity sharply over the last three to four months and may be renegotiating its Airbus orders.

Aer Lingus now faces two big priorities, analysts say. One is to halt the costs that will drag its net cash levels down to 400 million euros by the year’s end, from 630 million euros at present; most carriers are eager to preserve their cash piles to help them ride out the crisis.

It must also rethink its strategy of expanding its long-distance network, following the trans-Atlantic market opening known as Open Skies.

Cutting spending and concentrating on short distance routes may prompt Aer Lingus to defer its orders for a dozen new Airbus jets, said Stephen Furlong at Davy stockbrokers in Dublin. Aer Lingus has five A330s on order as well as six of the long-delayed A350 extra wide-body jets.

“I don’t see the new chairman and finance director as so wedded to long haul,” Mr. Furlong said. “The high-risk strategy of growing long haul is being reviewed and possibly curtailed.”

The airline will also have to decide whether to remain independent — a harder position to maintain when European carriers are coalescing into three main groups.

Aer Lingus, having adopted a low-cost model, has been unaligned since quitting the Oneworld airline partnership in 2007.

Ryanair’s thwarted ambitions for Aer Lingus may end up costing both airlines dearly. The 29.8 percent slice that Ryanair bought when Aer Lingus went public in 2006 has been unprofitable for the carrier, whose stake in Aer Lingus is a deterrent to other buyers. The Irish government owns 25 percent of the airline.

“There is more work to do at Aer Lingus than at easyJet,” said Yan Derocles, an analyst at Oddo Securities in Paris.

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