A TRADING update from Aer Lingus yesterday shows that it continues to burn through its cash pile at a fast rate.
The airline ended 2009 with net cash of €335.9 million, down from €653.9 million a year earlier.
Analysts have predicted that it could fall to as low as €200 million by the end of this year when trading losses and charges relating to its latest cost-cutting deal are included in its accounts.
The trading bulletin showed that Aer Lingus had an operating loss of €81 million in 2009, slightly better than consensus analysts’ forecasts of €85 million.
The airline said it made a loss of €93 million in the first six months of the year, but posted a profit of €12 million in the second half.
No comment on the outlook for 2010 was included in the update, which replaced a planned release of the airline’s full preliminary results for 2009.
Publication has been delayed until later this month due to the failure of the airline to agree a restructuring deal with its union.
Aer Lingus’s revenues declined by 11 per cent to €1.2 billion last year in spite of a 3.8 per cent boost in passenger numbers to 10.4 million.
The recession squeezed average fares, with the price of short-haul tickets declining, on average, by 12 per cent, while long-haul were down 15.9 per cent.
There was one bright spot last year for Aer Lingus in terms of revenues. Its ancillary charges, which includes bag revenues, car rental and hotel fees, rose by 16.2 per cent to €173.9 million.
Its fuel bill also declined by 17.3 per cent to €331.7 million as the cost of oil moderated from the all-time highs of 2008. Other operating costs were reduced by 1.9 per cent to €955 million.
Its fare revenue fell by 13.6 per cent to €992.7 million, while the contribution from cargo dropped by 31.8 per cent to €34.3 million. Other revenue was 17.2 per cent down at €4.8 million.
Joe Gill, aviation analyst with Bloxham Stockbrokers, described Aer Lingus’s cash pile as its “saving grace” at present.
“But if something doesn’t happen to arrest the trading losses then people will start getting concerned and that’s why reaching agreement on this deal is so important.”
