Aer Lingus Reports Strong Figures

Aer Lingus PlaneAer Lingus has enjoyed strong figures for the second quarter of the year. Passenger numbers increased 8.3% in comparison to the same period in 2010. With a rise in the amount of cash earned per passenger by 6.6% to €113.13, revenue jumped 14% to €351 million. Despite these good figures, the airline reported a €14.2 million loss for the first six months of the year.

Also during the announcement, Aer Lingus said that it’s optimistic about figures for the second half of this year. The carrier’s booking profile into the fourth quarter of the year is strong, with sales growth in the second half anticipated to be like that of the first half, when it reported a 5.8% rise in revenues to €569 million. After announcing the numbers, shares for the Irish carrier rose 9.3%.

Aer Lingus had a mixed first half, with the first quarter resulting in a loss but the second quarter ending with a pretax surplus of €42.2 million. Revenues were also affected by a cabin crew strike, which cost the carrier €15 million. Pilots had threatened to hold industrial action as well. During this time, passenger numbers had fallen 1% to 4.36 million.

However, the airline has launched a cost-cutting programme that is estimated to save them €97 million per annum but deliver about €80 million in savings for this year. The carrier is examining other initiatives as well – improving ancillary revenues, seasonal working and leasing aircraft – in order to secure the remaining savings. Meanwhile, fuel costs for the period fell 1.9% to €129.6 million, while gross cash flow at the end of June was €919.4 million.

Aer Lingus chief executive Christoph Mueller has described the figures as very positive. However, the carrier has flagged a possible issue in relation to the pension scheme for its staff, which had a €400 million deficit at the end of last year. The airline thinks it doesn’t have an obligation to resolve the issue after a deal was made at the time of its IPO. It acknowledged, though, that measures taken by trustees to close the deficit may adversely affect relations with employees. Staff or deferred pensioners can legally challenge its stance of no obligation, and if a court rules against the carrier, the company could suffer a substantial loss.

Aside from this, Mueller added that Aer Lingus has decided not to join one of the three airline alliances right now. The cost would be between €30 million and €50 million. He also said during a conference that speculation in the industry that he could be in the running for the chief executive position at Air Berlin isn’t true. The position is now open, as of today, following the resignation of Joachim Hunold, which was revealed just last week.




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