Mueller sorts things out at Aer Lingus
AFTER just over a year in the job, I must admit that I'm developing a bit of a gra for Aer Lingus boss Christoph Mueller.
The tough-talking German has told it like it is and put it up to the airline's bolshie trade unions. His efforts were rewarded when Aer Lingus reported excellent third-quarter results, with a 35 per cent jump in operating (pre-interest) profits to €79m.
The third-quarter numbers provide tangible evidence that Mueller's programme of ruthless cost-cutting and the axing of uneconomic routes is having a dramatic impact on the Aer Lingus bottom line. Staff costs were down by almost a fifth in the third quarter, while Mueller has reversed the haemorrhage of cash at the airline, with its net cash position improving by €20m compared to the end of September 2009.
Pruning the route network pushed up Aer Lingus passenger yields by 12.5 per cent as fewer passengers were forced to pay higher fares on fewer flights.
The excellent third-quarter results meant that the Aer Lingus share price finished the week virtually unchanged at €1.16.
This was despite the news that the UK's Office of Fair Trading is to investigate Ryanair's 29.9 per cent stake in Aer Lingus, a move that eliminates any possibility that the cash-strapped Irish Government could persuade the EU Commission to let it sell its 25.4 per cent Aer Lingus shareholding, which is worth over €150m at the current share price, to Michael O'Leary's outfit.