Sunday 23 November 2014

Aer Lingus to launch new North America routes as profits hit €39m

Published 31/07/2014 | 02:30

Christoph Mueller
Christoph Mueller

Aer Lingus is set to add new routes and extra capacity to North America after reporting its best trading in at least five years and reversing a profit warning it issued in June.

A service to Dallas is one of the options that the airline might be considering.

Speaking to the Irish Independent, Christoph Mueller, chief executive, confirmed that new services are on track following the success of new routes to San Francisco and 
Toronto from Dublin this summer.

"I will not mention any destinations but we have very concrete plans," Mr Mueller, pictured right, said. He added that those plans would come to fruition before he leaves the airline next May.

"There is more good news to come and that will happen while I am still here."

Chief commercial officer 
Stephen Kavanagh confirmed that new services would 
have to be communicated to the trade by the end of the third quarter in order to be in 
place for next summer.

Dublin Airport Authority (DAA) chief Kevin Toland recently said that he sees scope for services from Dublin to US states such as Texas.

"There is a large Irish community in Texas and that is certainly an opportunity," said Mr Mueller.

Expectations

The relaunched Dublin-San Francisco route that started operations in April has performed beyond Aer Lingus' expectations.

Its new services to the city and to Toronto from Dublin added €22m in revenue in the second quarter.

Aer Lingus has increased capacity to North America by 25pc compared to last year, with all of that having been absorbed by the market.

The growing popularity of Dublin as a North American gateway for transfer passengers from the UK and mainland Europe is also making new US routes a more attractive proposition for Aer Lingus.

The carrier had also been poised to make an announcement regarding an order 
for Airbus A350 aircraft, 
but will now wait another three to four months while it evaluates the A330neo 
that Airbus launched this month, said Mr Mueller.

Second-quarter revenue at Aer Lingus rose 10pc to €437.8m, while operating profit before exceptional items climbed 33pc to €38.7m.

The airline issued a profit warning last month after industrial action wiped €10m off its revenue.

It said then that it expected profits to be between 10pc and 20pc lower in 2014 than in 2013.

But Aer Lingus now expects to deliver profits of "at least" €61.1m this year - the figure it generated in 2013.

Mr Mueller also agreed that Ryanair has set an ambitious target of capturing 75pc of all business travel between Ireland and the UK.

But he insisted that Aer 
Lingus could successfully 
retain its share of that customer base.

He also said the resolution of the IASS pension scheme issue that affects Aer 
Lingus and the DAA 
"remains challenging".

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