Revenues climb at Aer Lingus

Aer Lingus has reported a third quarter operating profit of €94.9 million, up 4.4 per cent on the previous year despite challenging conditions.

Total Aer Lingus revenue for the third quarter was up 1.2 per cent to €466.3 million, whilst operating costs were effectively managed, increasing by only 0.4 per cent to €371.4 million.

The airline said short haul passenger volumes were “negatively affected by the good Irish summer weather” dropping 2.8 per cent to 2.568 million, while the load factor dropped 1.7 percentage points to 82 per cent.

However, long haul flights performed particularly strongly with a 15.8 per cent increase in passenger numbers and a 0.4 percentage point increase in load factor to 91.7 per cent.

Aer Lingus chief executive Christoph Mueller said he did not expect any improvement in the short haul environment for the rest of 2013 as it remained characterised by heavily discounted fare offerings across Europe.

“The 2013 outlook on long haul remains positive with the exception of some weakness expected in November which was previously communicated. We maintain our current guidance for full year 2013 operating profit, before net exceptional items, to be around €60 million.”

Last September he warned the good weather conditions and strong price competition had hurt the airline’s short haul performance.

“However long haul revenue growth was impressive and the market has absorbed the extra capacity we added on the North Atlantic this summer,” he said.

This morning he expressed disappointment that the ongoing process to resolve pension issues continues to have a negative impact on the airline’s ability to deliver efficiencies and cost saving measures, particularly in respect of its recent voluntary severance programme.

The airline’s gross cash position was €933.2 million at the end of September. Over the three months to the end of September, 2.913 million passengers were carried on short haul and long haul routes, down 0.9 per cent on the same period in 2012.

Goodbody analyst Dónal O’Neill said the results show “very impressive progress” despite the challenges presented by weather, currency and increasing competitive pressures.

“Following a turbulent start to the earnings season for the airline sector, these results come as a welcome reprieve.”

He said the airline’s fuel cost was 3 per cent lower year-on-year largely due to favourable foreign exchange movements.

“However, some of this gain was eaten away by higher staff costs from the additional long haul services and contract flying business.”