Aer Lingus has announced an operating profit on continuing activities of €72m for last year, a 32% fall from the figure of €107m in 2004. Sales fell from €906m to €883m last year.
The results are the airline's last set of accounts before an expected privatisation later this year. The Government is expected to make a decision this month on how such a privatisation would be structured and when it would take place.
The airline hopes to have resolved a dispute with unions over pensions seen as crucial for the hoped for privatisation by mid-year.
Resolution of the spat over a €250m shortfall in the pension scheme is seen as key to a successful sell-off.
'We are confident that a solution on pensions can be arrived at in time for a mid-year transaction,' said CEO Dermot Mannion.
SIPTU shop stewards will meet tomorrow morning to hear a report from union officials on the future of Aer Lingus, its pension scheme and business plan.
Aer Lingus said that it faced significant challenges in 2005 including high fuel costs, fierce competition and changes in work practices.
'Much has been achieved in the year under review through continued cost reductions, greater efficiencies and enhanced productivity,' commented Chairman John Sharman. '
'Notwithstanding the challenges that lie ahead, we look forward with confidence and believe that our strategy will ensure that we can build Aer Lingus into a stronger sustainable business for the future,' he added.
Mr Mannion said customers had benefited from 'significant fare reductions' and increased enhancement of its route network.
'2006 is a year in which we can develop further opportunity, delivering on our twin track strategy with increased focus on the development of our long haul network. Critical to maximising these opportunities is securing investment which will enable all those employed at Aer Lingus to share in running a successful airline for the future,' he added.
Today's figures show that passenger numbers increased by 15.6% to eight million last year. The airline's passenger load factor fell marginally to 81% from 82% in 2004. Aer Lingus said its strategy of reducing prices resulted in further decreases in average yields.
Total traffic on European routes increased by 19% compared to 2005. Traffic on the UK routes rose by 6.3%, while traffic to continental Europe soared by 34% following the introduction of 16 new destinations during the year.
Transatlantic traffic was unchanged at 1.2 million passengers in 2005. The airline's cargo activities fell by 23% due to rationalisation of its European cargo operations changes in US route networks and lower transatlantic yields.
Aer Lingus said that costs on continuing operations amounted to €810.6m in 2005. The overall cost increase was contained to €10.8m (up 1.3%), despite an increase in fuel costs of €33.1m - a jump of 31.3%. The airline said that while world oil prices rose by about 41% year on year, its hedging policy reduced the impact on the results for the year.
