Shares in Aer Lingus closed over 26% lower this evening in Dublin after the airline warned that it was unlikely to make a profit this year.
The warning came as Aer Lingus reported a pre-tax loss of almost €120m for last year, compared with a profit of €124.8m a year earlier, hit by a once-off €140.9m charge for its cost-saving programme.
When the restructuring charge was stripped out, pre-tax profits fell by almost 84% to €21.2m, as fuel costs jumped by almost 60%. There was an operating loss of €17.6m.
The airline lowered its outlook for this year, saying consumer demand had weakened and cargo revenue was expected to fall by up to 30%, following a 5.5% rise in 2008.
Aer Lingus says passengers are increasingly booking later and lower fares are needed to keep its planes full. It expects average fares to fall at least 10% in 2009. Chief executive Dermot Mannion told RTE radio a fall of 12% in fares would give a break-even figure, but it was hard to predict in the current environment.
The 2008 results show that total revenue grew by 5.6% to €1,357m, while passenger numbers rose by 7.5% to 10 million.
Mr Mannion said there had been sustained pressure on its business throughout the year. He also said that while Ireland would always be a core element of Aer Lingus, diversifying out of the Irish market was key to its success in the long-term.
Average fares fell 4.6% in 2008, while other revenue from passengers - ancillary revenue per passenger - rose by 28%.
Aer Lingus shares closed 21 cent lower at 58 cent in Dublin this evening.
Ryanair has said it will submit complaints to the Dublin and London stock exchanges, the Irish Takeover Panel and the Financial Regulator after the Aer Lingus results.
Ryanair claims Aer Lingus's defence document against Ryanair's takeover offer - published in late December - made comments on profits which have now been 'proven to be untrue'.
