Aer Lingus hoping to profit from US flights by next year
Published 19/06/2010 | 05:00
THE transatlantic operation of Aer Lingus is recovering quickly and may be in profit as soon as next year, the airline's chief executive said yesterday.
Christoph Mueller said the improvement in the transatlantic market was "very fast" and although a return to profit this year was unlikely, he was optimistic that the business may be back in the black by 2011. Long haul passenger revenue had fallen 20pc in 2009.
"For the full year we do not expect a profit on long haul because we still have the winter schedule, which was published last year, with all that extra capacity.
"However, we hope that the run rate on long haul with regard to profit contribution will be similar to short haul; so we have a fairly good chance to enter positive territory next year or as soon as Ireland comes out of the recession," he said.
Speaking after the company's AGM, Mr Mueller attributed the recovery to lower costs, better pricing and improved yield management. However, he remained cautious on the year ahead overall.
Chairman Colm Barrington was also optimistic after improved year-on-year trading in April and May but warned that "given the broader economic environment it is appropriate to remain cautious on the group's 2010 full-year performance".
The improved trading came despite having to curtail services on 18 days during April and May due to the volcanic ash crisis.
"Load factors were very high, due mainly to the fact that it was nearly the only transatlantic service operating during the ash crisis, indeed we had to upgrade one of our aircraft during that time," he said. And although transatlantic bookings have gone up, the airline has seen a decrease in short haul bookings. Yields on short haul flights remain higher year-on-year, however.
Mr Barrington reiterated that any dividend payouts in the near future were "highly unlikely".
At the AGM, one resolution, which would have allowed the company to call an EGM on 14 days' notice but would only allow an individual shareholder to call one on 30 days' notice, was defeated after Ryanair, which holds nearly 30pc of the airline's shares, rejected the resolution as "undemocratic".
Yesterday shares in Aer Lingus closed up 2pc at 76c.