Aer Lingus has issued a profit warning after it failed to recoup passenger numbers that declined during the summer’s heatwave.
Its shares have plunged over 8pc this morning as a result.
Aer Lingus also said it’s examining ways of accelerating on-going cost reductions and said that a voluntary redundancy scheme has been slowed due to an on-going unresolved pension issue.
The airline, headed by chief executive Christoph Mueller, said that Aer Lingus is now likely to make a pre-exceptional operating profit of about €60m this year – less than the €69.1m that had been anticipated.
Aer Lingus told investors this morning that it will now not be possible to recover the lost passenger volumes experienced in July and August as a result of the warm weather.
It added that the pricing environment remains “intensely competitive” and that this will adversely impact what would traditionally be higher priced tickets booked by passengers in the same month they intend to travel.
“Aer Lingus management is examining ways to accelerate existing plans to achieve further cost efficiencies in order to preserve competiveness and protect future profitability,” it said.
Its transatlantic business continues to perform well but there’s some weakness evident in November bookings compared to November 2012.
“Some of this weakness is attributable to a distortion in the prior year comparatives due to disrupted passengers travelling in November 2012 rather than late October as a result of Hurricane Sandy in the United States,” Aer Lingus explained. “Long haul bookings for the remainder of 2013 are currently ahead of prior year.”
It added: “The recent nature of these new market conditions means that trading visibility is limited but on the assumption that these conditions continue unchanged for the rest of the year, Aer Lingus currently expects that 2013 operating profit, before exceptional items, will be around €60m.”
Last week, as much as €1.3bn was knocked off Ryanair’s market capitalisation after it issued a profit warning.