Aer Lingus posts €53.7m loss

Aer Lingus warned today that operating profit will be "much lower" this year after it announced losses which were 41.7 per cent higher for the first quarter.

The airline recorded an operating loss before exceptional items of €53.7 million compared to a €37.9 million loss for the same quarter a year earlier.

The airline attributed the increased losses to the effect of industrial action by cabin crew in January and February and to the later timing of Easter in 2011, which led to an estimated €5 million loss alone. It also said that some of its routes in Ireland had performed poorly.

It warned that it may have to reduce capacity on some under-performing routes if demand continues to be weak.

The airline also said that its cost saving programme, named Greenfield, which is intened to save the airline €97million, may not be sufficient..

Aer Lingus said it had a difficult start to 2011 but said its latest results, published in an interim management statement, were in line with expectations.

First quarter revenue decreased by 4.8 per cent from €228.8 million to €217.9 million despite an 11 per cent reduction in capacity.

Yield per passenger rose 9.0 per cent compared to the same quarter a year earlier while load factor decreased by 2.5 percentage points.

"While we still expect that Aer Lingus will be profitable in 2011, we expect that the level of profitability will be much lower than in 2010," said Aer Lingus chief executive Christoph Mueller.

"In light of the continued weakness of the Irish economy and pressures on non-controllable costs, we are assessing whether the Greenfield cost reduction programme is sufficient to protect profitability for the future or whether further measures are required," he added.

Short haul passenger fare revenues decreased by 3.4 per cent to €132.2 million in the first quarter while long haul passenger fare revenues decreased by 4.1 per cent to €42.3 million in Q1 2011.

Business class revenues continued to experience a relatively strong performance and contributed approximately 27 per cent of total long haul revenues during the quarter compared to approximately 23 per cent for the first quarter of 2010.

Ancillary revenue per passenger totalled €18.24 compared to €19.02 for the same quarter a year earlier.

The airline said operating expenses rose by 1.8 per cent over the year but that fuel costs decreased by 4.9 per cent. There was also a 9.2 per cent decline in staff costs arising from the company's Greenfield programme.

Aer Lingus’ gross cash balance of €925.1 million represents a €40.1 million increase on the preceding quarter.

The airline said trading conditions remained difficult but that it was encouraged by early indications for second and third quarter revenues. It said that fuel costs remain a concern.

In a separate announcement the company announced that passengers numbers for April rose by 19.3 per cent to 822,000 from 689,000 a year earlier.

Short haul passengers numbers rose by 19.8 per cent from 626,000 to 750,000 while long haul passenger numbers were up 14.3 per cent from 63,000 to 72,000.

The load factor - which represents the number of passengers as a percentage of total seats available - decreased by 4.9 points on the same quarter a year earlier to 70.9 per cent.

Short haul load factor was 71.9 per cent, a decrease of 5.1 per cent on April 2010 while long haul load factor was 69 per cent, a drop of 4.5 points.

Aer Lingus Regional's total booked passenger numbers in April were 64,000, an increase of 93.9 per cent compared to the same month a year earlier. Aer Lingus Regional commenced services on the 28th March 2010 with three aircraft operating from Dublin and Cork. The regional fleet has since grown to six aircraft and now also offers services from Shannon.