independent

Friday 18 April 2014

Aer Lingus wants many smaller shareholders, not just few big ones – Mueller

5/2/14  REPRO FREE
Christoph Mueller Aer Lingus CEO (centre) with Aer Lingus cabin crew  Lesley Murphy and Grainne Frawley on hand to help launch the Shannon Boston Aer Lingus daily flights.
Ireland and the United StatesÕ most Irish city grew closer as Aer Lingus commenced a daily year-round service from Shannon to the Massachusetts capital. 
The service is one of the key aspects of Aer Lingus renewed commitment to the independent Shannon Airport this year, with the airline also set to operate a six-times weekly, year-round JFK New York service from March 30th.  
In addition, Aer Lingus will also commence a new Malaga service at the end of April and, through its partner Aer Arann, under the Aer Lingus Regional service will also operate a new Bristol route this summer as well as almost double capacity on Manchester and Birmingham services.   This year also marks the 20th anniversary of the Aer Lingus Shannon cabin crew base.
.  Pic Sean Curtin Photo.
Aer Lingus boss Christoph Mueller announced a plan to save €30m over two years.

THE head of Aer Lingus has said that having a mix of smaller shareholders, rather than potential large-scale stake building by a few investors is best for the airline.

Aer Lingus would be best served by having a large number of shareholders and not necessarily by Gulf carrier Etihad hiking its stake in the Irish airline above its current near 3pc stake, Christoph Mueller said.

"Liquidity is key for us and should be for all shareholders because low trading and a low free float is an impediment to our share price potential," Mr Mueller told the Irish Independent, adding that the Aer Lingus management believes that the airline should have "many shareholders" rather than a few large ones.

The chief executive was speaking as Aer Lingus reported an operating profit of €61.1m for 2013, an 11.6pc fall on 2012.

But the figure was in line with the forecast profit Aer Lingus management gave back in September when they issued a profit warning. Aer Lingus had originally expected to make a profit of €69.1m. Revenue edged 2.3pc higher to €1.42bn last year.

While its transatlantic services performed strongly, short-haul routes suffered, hit by a heatwave in Ireland and northern Europe last summer that dented demand, and also by a fare battle that raged between carriers, especially in the last half of 2013.

The Aer Lingus boss said that he doesn't expect to see Ryanair's almost 30pc stake in its smaller rival reduce until next year. The UK's Competition Commission ruled last year that Ryanair must reduce its stake in Aer Lingus to 5pc. Ryanair is appealing that decision.

The Government also owns 25.1pc of Aer Lingus and it's likely that it will re-examine selling that stake once Ryanair is forced to reduce its holding.

Etihad CEO James Hogan has previously said that he would be interested in raising the carrier's stake in Aer Lingus.

"We have a preference to have no principal shareholders," said Mr Mueller. "But who exactly the shareholders will be is out of our influence. We would not promote any preference from our side."

SAVINGS

"We take a lot of pride in the fact that we are the only profitable carrier in that group," said Mr Mueller regarding the other airlines in which Etihad has stakes. He said the Abu Dhabi-based carrier's 3pc stake in Aer Lingus is "not significant".

Mr Mueller announced a raft of initiatives yesterday, including a plan to save €30m over the next two years under a new cost-saving programme called CORE (Cost Optimisation and Revenue Excellence). Most of the savings will be made from payroll.

It will focus on improving business processes, enhancing retail merchandising revenue and delivering a new passenger reservation system. It could also result in "significant redundancy costs" for the airline, according to Mr Mueller.

Aer Lingus will also roll out a new website this year and improve its mobile app.

Irish Independent

Also in this Section

Classifieds

CarsIreland

Independent Shopping.ie

Meet, chat and connect with
singles in your area

Independent Shopping.ie

Meet Singles Now

Findajob

Apps

Now available on

Top Stories

Most Read

Independent Gallery

Your photos

Send us your weather photos promo

Celebrity News