Aer Lingus seeking 100 redundancies as first quarter losses grow

Thursday 25 April 2013 18.38
Aer Lingus reports operating loss of €45.5m for first quarter of 2013
Aer Lingus reports operating loss of €45.5m for first quarter of 2013

Aer Lingus is seeking about 100 voluntary redundancies as it continues to streamline its organisational structure.

It made the announcement in an interim management statement and said its performance for the first three months of the year highlighted the need to continue to review its cost base to protect profitability for the rest of 2013 and beyond.

Aer Lingus said today that its revenue for the first three months of 2013 rose by 3.3% €259.7m.

It said that leisure passenger numbers were helped by the timing of Easter, with the Easter bank holiday weekend falling into March 2013 compared to the start of April in 2012.

The airline reported an operating loss before exceptional items of €45.5m for the three month period - this compares to a loss of €36.1m the same time last year. The airline noted that its first quarter of the year is usually loss making.

Aer Lingus put the increased loss down to start-up costs for the Virgin ''wet lease'' operation in the UK, changes to the long haul fleet and slightly weaker trading on UK routes.

See how Aer Lingus shares are performing in Dublin

Fuel costs rose by €3.7m or 5.4% in the first quarter of the year, while airport charges increased by 3.9% to €59.1m. Aer Lingus said that price increases, especially at London Heathrow, Spanish and Italian airports, are expected to add significantly to airport charges this year.

Aer Lingus also noted an increase in other costs, including the installation of WiFi, extra de-icing charges as a result of the cold weather and more costs for the ''heavy maintenance season''.

Total passenger numbers between January and end March increased by 2.2%. The overall yield per passenger increased by 3.7%.

Aer Lingus chief executive Christoph Mueller said that the first quarter of the year has been ''challenging'' with higher fuel, airport and one-off costs, along with slightly weaker trading on UK markets due to the weak economic conditions there.

''Trends identified in Q1 2013 including higher airport charges, the strength of long haul and softness in our UK market have the potential to remain a feature for the rest of the year,'' Mr Mueller said.

''On that basis, we currently expect 2013 operating profit - before exceptional items - to be broadly in line with last year,'' he added.

Aer Lingus said it continues to engage with parties involved in its various pensions schemes, along with representatives of the Irish Congress of Trade Unions, IBEC and the Labour Court.

''The discussions are complex and there can be no certainty that agreement would be reached between all parties involved,'' the airline admitted. It added that shareholder approval will be sought for any agreement that may be reached.

The company said that its present level of bookings for the rest of 2013 is ahead of the same time last year. It added that indications how that the long haul market is strong enough to absorb the additional capacity it has introduced.