Aer Lingus has reported operating profits, before employee profit share, of €88.5m for 2007 - an increase of 16.4% on the previous year and better than market expectations.
Revenues in 2007 were 15.2% higher at €1.285 billion, while ancillary revenues jumped 71.5% to €108.7m year on year. Pre-tax profits rose by 38% to €124.8m from €90.4m in a year marked by significant increases in competition and in fuel prices.
Aer Lingus said its earnings per share came to 19.9 cent, down 11% from the figure of 22.2 cent in 2006.
There was a 7.8% increase in the number of passengers carried in a year when the airline took delivery of six new planes and added 14 new routes while increasing the frequency of flights on others. The total passenger load factor - how many seats on filled on each plane - was 75.4%, down from 77.6% in 2006 due to the capacity increase.
Aer Lingus CEO Dermot Mannion said the airline had grown its network, increased revenues and reduced costs during 2007.
However, he warned that Aer Lingus - like other airlines - was operating in challenging times. The weak dollar, high oil prices and fears of reduced growth in major markets meant it was critical the airline continue to take costs out of the business.
Aer Lingus said the economic outlook in its main market is 'uncertain' and is being exacerbated by the continuing rise in oil prices. By February 29, 2008 the airline had hedged 36% of its remaining 2008 fuel requirements at $796 per tonne of jet fuel, but the remaining 64% is exposed to market fluctuations.
It said that for its seasonally weaker first half of the year, it expects total revenue per available seat kilometre to be lower than last year, with load factor pressures outweighing further growth in ancillary revenue per passenger.
'While it is too early to have a clear view on the second half of the year, forward bookings for the peak summer period as a percentage of capacity are currently tracking in line with last year,' Aer Lingus said.
'2007 was a year of further progress for Aer Lingus and the group's first full year trading as a quoted company,' commented CEO Mannion.
'We continued to grow the network, drive up ancillary revenues while at the same time reduce unit costs. Despite soaring oil prices and an increasingly competitive marketplace, operating profits remained strong in 2007 and were better than expectations,' he added.
'We have set ourselves challenging targets for 2008, however, we have a robust business model and have proven ourselves a strong competitor in all markets. Open Skies offers us new opportunities for growth, while our continued focus on reducing costs will underpin our overall performance,' Mr Mannion said.
Aer Lingus shares closed up seven cent at €2.06 in Dublin.
