Aer Lingus got itself into a dogfight that it can’t win. Just two months ago the carrier announced a simplification of its fare structure from the US to Ireland. One-way unrestricted Business Class fares were slashed to $1,115 from the Northeast, $1,515 from the West. Now American Airlines is on its tail, having announced two new routes to Ireland — ChicagoDublin and Boston-Shannon starting May 1, 2005 — with fares that match Aer Lingus’. With American’s expansive domestic network, one-stop connections will be available to Ireland from many US cities. The airline will operate both routes on a daily basis during the peak summer travel season and five days a week the rest of the year.

This move seemingly confirms the rumors that Aer Lingus will be expelled from the Oneworld Alliance.

The only downside: B-757s are going to be used on the Boston-Shannon route. On the other hand, although the planes will be configured for two classes, all seats will be sold as economy, with First Class seats (American’s domestic model) given to elite AAdvantage members. (See FCF July 2004 for more.)

Not a bad deal.

Aer Lingus is also at a competitive disadvantage because it lacks a significant loyalty program. (See FCF Oct. 2004 for details.) Moreover, there are other bogies coming up, too. Continental and Delta are matching these fares, with Business Class seats available via East Coast gateways.

The question now is whether Aer Lingus can survive in US markets.