AER LINGUS FACING HEADWINDS AS CURRENT CASH BURN IS UNSUSTAINABLE - For the first six months of its financial year, Aer Lingus has reported an operating loss of €93m, that is compared to a loss of €23m for the same period last year. Its revenue fell by 12.2% to €555m. The airline says it now has to take difficult but necessary steps to address its business model and cost base.
Sean Coyle, the airline's chief financial officer, says the Aer Lingus board had a tough job ahead of it. He says he believes Aer Lingus can be made successful as an independent entity as it undertakes 'an exhaustive and wide-ranging examination' of its operations and commercial focus.
'Clearly we can't sustain operating losses of these levels, we can't sustain the kind of cash burn we've had in the first half of the year and we need to rebase our cost structure to live with the lower fares that our passengers are prepared to pay,' Mr Coyle said. He said the airline is prepared to look at all areas of the business and the whole way it does business.
On finance, the airline's chief financial officer said that no bank is prepared to lend money to an airline that is burning through €400m of net cash in a 12 month period as Aer Lingus has done. 'We have to come up with a cost plan to stabilise the position. Nothing is ruled out at this time,' he stated.
Mr Coyle said there was a tough job ahead for everyone at the airline. 'The reality is the business is in significant difficulty and a considerable job of work is there to be done to turn the business around,' he said.
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EIRCOM'S METEOR EARNINGS UP 11% AS FIXED LINE BUSINESS DOWN 3% - Group earnings at Eircom came to €692m for the full year, down by 1% compared to the year before. Its revenues at €1.9 billion were 3% lower in the year to June, and its operating loss amounted to €486m. Breaking down the figures, mobile operator Meteor's earnings grew by 11% to €124m, while the fixed line business was 3% lower at €568m.
Eircom's CEO Paul Donovan says the economic environment is challenging, with the continuing slowdown in activity impacted both volumes and revenues. Customer growth and retention will remain key objectives for the business, which we expect to achieve through increased value and service,' he added.
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MORNING BRIEFS - Drinks group C&C says it is buying Anheuser Busch's operations in Ireland, Northern Ireland and Scotland for €205m. The main brand there is Tennent's lager, but it also gets the distribution rights for global beer brands like Stella and Beck's and in Scotland and Northern Ireland for Budweiser.
*** Diageo also has figures out today for its full financial year - it says sales of Guinness were flat, but that its market share grew in pubs in the Republic of Ireland to 32.2% - one in every three pints sold. As a whole, Diageo says it has a 42% share of the total drinks market across Ireland. It says that in general the value of alcohol sold in the year fell by 3%, and volume fell by 4%.
*** Gerry McCaughey, the chief executive of the Canadian Imperial Bank of Commerce, the bank thought to be interested in buying a stake in AIB Group, said overnight the bank's priority is to strengthen its core businesses but that acquisitions may help build capacity. He declined to confirm CIBC is seeking a minority stake in AIB, as the bank reported lower than expected quarterly profits.
*** On the currency markets, the euro is trading at $1.4242 cents and 89.8 pence sterling.
