Aer Lingus targets €60m profits after best ever quarter
Aer Lingus has made its biggest ever quarterly profit and the airline insists that intense price competition on short-haul routes this winter won't prevent it from hitting its target of making a €60m operating profit this year.
Releasing third-quarter results yesterday, Aer Lingus said it made a €94.9m operating profit in the three months to the end of September. That was 4.4pc higher than in the third quarter of 2012, as revenue edged 1.2pc higher to €466.3m.
The revenue figure was helped by fees generated from the operation of Virgin's 'Little Red' domestic service in the UK. Aer Lingus provides the crew and aircraft for the flights.
Despite the record quarterly profit performance, operating profit in the first nine months of the year, at €78.4m, is 9.4pc lower than it was in the first nine months of 2012.
Short-haul fare revenue declined 5.8pc to €259.9m in the latest quarter, hit by the hot summer at home, which curbed holiday traffic. The number of short-haul passengers it flew in the third quarter fell 2.8pc to 2.56m.
Chief executive Christoph Mueller told the Irish Independent that the threat of industrial action by the airline's pilots in August in support of unrest at Aer Arann, had also damaged bookings.
The hit to its short-haul traffic during the period was offset by a strong performance in its transatlantic service.
Long-haul fare revenue climbed 12.4pc to €131.3m as the number of passengers carried rose 15.8pc to 345,000.
The revenue came as its load factor, or percentage of available seats filled, nudged 0.4pc higher. The higher load factor was achieved despite the available capacity in its long-haul services rising 15.9pc in the three-month period compared to the third quarter of 2012.
Virtually all long-haul seats – 91.7pc of them – were filled during the quarter, reflecting strong demand from the US. About 65pc of Aer Lingus transatlantic ticket sales are made in the United States.
But the airline also saw its average fares fall. On short-haul services, the average fare paid per passenger in the third quarter fell 3.2pc to €101.19, while on long-haul services it declined 2.7pc to €380.91.
Mr Mueller said that while the current Aer Lingus long-haul model is working well, he wouldn't rule out being part of a north Atlantic joint venture, similar to that operated by British Airways and American Airlines, or Virgin and Delta, if it made sense in the future.
He also said he remains "optimistic" that the dispute related to cabin crew currently based at Shannon can be resolved without any need for industrial action.
Mr Mueller also declined to predict the outcome of efforts to solve the on-going pension crisis at the Irish Airlines Superannuation Scheme (IASS), which has a deficit of around €800m and serves current and former workers at Aer Lingus and the Dublin Airport Authority.