Thursday 19 April 2018

Aer Lingus hoping to beef up its services to North America

PA
PA
John Mulligan

John Mulligan

AER Lingus is hoping to add extra capacity on its routes to North America and is contemplating a service to Canada, according to management.

The airline's chief executive Christoph Mueller also said yesterday that the carrier was considering the launch of domestic UK services, which could involve the use of some of its London Heathrow slots.

Even modest expansion of its North Atlantic services would come after the airline pared capacity to the bone as the downturn took hold in 2008.

Plans to boost capacity come as Aer Lingus yesterday reported a €36.1m operating loss in the first quarter of this year. That was a third lower than the loss it made in the first quarter of 2011. Airlines typically lose money in the winter months.

Turnover rose 15.6pc to €239.2m, with short-haul fare revenue 12.6pc higher at €148.9m and long-haul fare revenue up 24.6pc to €52.7m. Business class fares accounted for 28pc of fare revenue on US services, with overall long-haul performance "well ahead of expectations", according to the airline.

Some short-haul services weakened during the quarter due to the timing of some sporting events in the UK and poorer demand for some ski destinations. But the airline expects to make an operating profit of about €50m this year -- ahead of the €36m or so that had been expected by analysts.

Aer Lingus management also revealed yesterday that the airline was also considering the introduction of single-aisle aircraft on its North America services.

That would complement the existing twin-aisle Airbus A330s that it uses on those routes. It's looking at possibly using either Boeing's Max or the Airbus Neo.

Aer Lingus, which confirmed earlier this week that Abu Dhabi-based carrier Etihad had bought a near 3pc stake in the airline, also said that it expected to commence the formal court process required for its proposed capital reduction "in the near future".

Completion of that process -- which could happen by June -- will pave the way for the airline to pay a dividend from distributable reserves.

Transport Minister Leo Varadkar has made it clear that the Government would like to receive a dividend from the airline in respect of its 25.1pc stake before that holding is sold, probably next year.

Mr Mueller said that the airline had experienced an "encouraging start" to 2012 and said the narrowed loss in the first quarter was due mainly to strong yield growth, or higher average ticket prices, on its US services.

"We have deliberately compensated for the continuing decline in private Irish consumer demand with an increased focus on serving time-sensitive traffic, which comprises a higher proportion of business travellers," he said.

Back in 2009, Aer Lingus was managing to fill only a third of its 24-seater Premier class on its US routes, and only four or five of those had paid the full fare. The others were using points to upgrade.

Irish Independent

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