Timing of Easter and threatened action hits Aer Lingus as operating losses mount

Thursday 01 May 2014 18.25
Aer Lingus reports operating loss of 48.5m for the first three months of 2014
Aer Lingus reports operating loss of 48.5m for the first three months of 2014

Aer Lingus has reported an operating loss of €48.5m in the first three months of the year, an increase of 6.6% on the same time last year.

The airline said the loss was down to a later Easter and the negative effect of threatened industrial action on booking volumes in March. The first quarter is seasonally loss making for the airline.

Aer Lingus said its first quarter revenues at €259.4m were broadly flat year-on-year. Its retail revenue was 6% higher year on year with retail spend per passenger up 10.1%.

Its short haul business continued to make positive returns, the airline said, but its short haul market remained very competitive. 

Aer Lingus said it carried total of 1.833 million passengers in the three month period, down 3.8% on the same time last year. Passenger numbers on its regional operations, operated by Stobart Air, rose by 14% to 256,000.

The company said it expects 2014 operating profits to be broadly in line with levels achieved in 2013.

Aer Lingus chief executive Christoph Mueller said the airline's short haul operation remains an attractive and profitable business despite the continuation of intense price competition in European markets. 

"Forward trends are positive, especially in long haul. We continue to expect that our operating result for 2014 will be broadly in line with 2013," he added.

The Aer Lingus CEO also said that the company's CORE cost cutting programme remains on plan. "The relevant workstreams have been identified, the required business cases have been commissioned and a programme office has been established," Mr Mueller said.

He said the airline would give further specific details of the programme to employees and staff later this month.

Aer Lingus said its fuel costs in the first quarter fell by 7.6% compared to the same time the previous year due to a number of factors including favourable currency movements. As of March, Aer Lingus had hedged 70% of its forecast fuel requirements for the year at an average of $956 per metric tonne. 

Staff costs rose by 5.3% due to additional staff members on the new US routes as well as the impact of a salary increment which was paid in September of last year. 

The airline holds its AGM in Dublin tomorrow.