Business Irish

Tuesday 16 July 2019

Aer Lingus boss backs dividend for IAG parent

Chief executive Sean Doyle says IAG entitled to benefit from investment in airline that has added 1,000 jobs

Aer Lingus chief executive Sean Doyle. Photo: PA
Aer Lingus chief executive Sean Doyle. Photo: PA
John Mulligan

John Mulligan

Aer Lingus chief executive Sean Doyle has backed a €200m dividend paid by the airline to its IAG parent in respect of 2017, and said the group is entitled to reap the benefits of the carrier's success after buying it in 2015.

"The level of investment we're seeing [in Aer Lingus] is unprecedented," Mr Doyle told the Irish Independent in an interview.

"That's backboned by our success. I think the investor has enabled us to invest, and they're participating in the success."

The dividend paid by Aer Lingus in respect of 2017 was the first the airline gave to IAG after the group bought the carrier for €1.3bn.

Since then, IAG has significantly expanded the Aer Lingus fleet, adding a number of extra A330 aircraft to expand its route network in the United States.

Last year, Aer Lingus posted revenue of €2.02bn and a €305m operating profit. The figures were up 8.8pc and 14pc respectively on 2017.

Mr Doyle declined to say when additional dividends might be paid by Aer Lingus to IAG, which is headed by Willie Walsh.

"We are creating a lot of jobs for the economy," added Mr Doyle. "Since IAG took over, 1,000 jobs have been added to Aer Lingus."

Mr Doyle was speaking in Hamburg, where Aer Lingus is preparing to take delivery of its first A321LR aircraft from the Airbus factory there.

The airline has eight of the jets coming on stream between now and the end of 2020.

They will be used on some routes to North America, and will also operate on some services between Dublin and European destinations, such as London Heathrow and Paris. Each A321LR aircraft requires up to 50 flight and cabin crew.

Last month, IAG also ordered six longer-range A321XLR aircraft for Aer Lingus, which will be delivered from 2023. "You get an idea of the investment we're making both in people and planes," said Mr Doyle.

Since IAG acquired Aer Lingus, the carrier has launched routes to Seattle, Miami, Minneapolis-St Paul, Hartford in Connecticut and Philadelphia.

It also reopened routes to Los Angeles and Newark. Aer Lingus will launch its Dublin-Montreal service next year, having postponed it from this year due to delivery delays relating to the new A321LR aircraft.

Aer Lingus still owns the majority of its aircraft, although the new LR jets are being leased to the carrier by Air Lease Corporation.

Mr Doyle said he was not wedded to a set mix of leased versus owned aircraft.

"Airlines generally tend to have a mix. It allows for the efficient use of capital, as you just look at what the right mix of owned versus lease is. It probably depends on where you can source the aircraft," he said.

"I don't really have a mark on the wall as to what the optimum mix is," he added.

"A lot of the time, it just depends on the point of time that you're ready to make a commitment - a combination of what's on offer and if the market is offering good terms or not, and what's going on in your business.

"I don't think there's necessarily a balance that you stick with rigidly."

Mr Doyle also said that he believes Dublin Airport could handle about 40 million passengers a year with its current infrastructure, and before a third terminal should be considered at the hub.

Dalton Philips, chief executive of the DAA, the semi-State company that operates the gateway, said last year that he thinks as many as 55 million passengers a year could be handled by the current terminals.

Last year, Dublin Airport handled 31.5 million passengers, a figure that will probably hit about 33 million this year.

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