AER LINGUS’S share price fell by 4.3 per cent in Dublin yesterday as the company posted a loss of €20.8 million for the first six months of this year.
The share price decline was more to do with the ripple effect felt in the Irish market by CRH’s profit warning than any specific negative sentiment towards the airline.
Aer Lingus’s losses for the six months to the end of June were 80 per cent lower than the €81.7 million recorded in the same period of 2009.
Chief executive Christoph Mueller said a busy summer season, improved yields, reduced fuel costs and savings in staff expenses should mean that the full-year operating result should be “no worse than break even”.
He refused to be drawn on the outlook for 2011.
“The outlook is a little bit of a mixed bag . . . stormy seas but blue skies” as the economy remains in recession.
Mr Mueller said the airline was “committed” to resolving the impasse with cabin crew on new rostering arrangements, which is a key plank in its cost-reduction plan.
The standoff with cabin crew is the subject of an arbitration process with Kieran Mulvey of the Labour Relations Commission.
“We are hopeful we can meet in the middle and shake hands,” he said, adding that it could not be “complacent on its costs”.
Aer Lingus actually made a profit in the second quarter of the year – April to June – of €15.4 million. This was in spite of a €10 million hit to its bottom line from the disruption caused by the closure of European airspace as a result of the dispersal of volcanic ash from Iceland.
This disruption cost the airline €20 million in lost revenue and Mr Mueller said it was handling about 300 compensation claims a day.
Aer Lingus’s long-haul revenues declined by 10.2 per cent to €113 million, but its average fare rose by 17.5 per cent to almost €282.
The airline has reduced its transatlantic capacity by 25 per cent over the past year in a bid to bring demand and supply into balance.
This is bearing fruit in terms of higher yields while the load factor in its business cabin has increased from about 30 per cent to more than 50 per cent.
“The importance of the business cabin in contributing to the overall business cannot be overstated,” Aer Lingus chief commercial officer Steven Kavanagh said.
The number of transfer passengers using its transatlantic services has risen by 50 per cent, indicating that feeder traffic from its various code-sharing arrangements and from the regional service operated by Aer Arann to Britain is paying off.
On short-haul routes, revenues were static at €321 million in spite of passenger numbers falling by 9.4 per cent to 4 million. This was the result of its average fare rising by 9 per cent to just over €80.
Aer Lingus said its joint venture with United Airlines on the Washington to Madrid route, which was launched on March 28th, was “meeting expectations”.
Its regional franchise service with Aer Arann, which also debuted in March, has carried more than 100,000, and was “meeting revenue expectations”.
