BORD GÁIS SEEING MORE CUSTOMERS IN ARREARS - Bord Gáis says managing customer debt in difficult economic circumstances will remain a major challenge for the company for some time. This comes as the company says it made a provision of €26.4m for bad debts in its accounts for last year. 115,000 of its almost one million customers accounts is in arrears of two months or more. In its annual report today, the company says that last year 24,000 customers switched from Bord Gáis to other utility providers leaving bills of significant value unpaid.
John Mullins, the company's chief executive, says that 33,000 customers are on payment plans, which gives them 18 months to pay off the debts accrued. Pre-paid meters are also being put into people's homes and Mr Mullins says there is no difference in the cost of gas for those using this method. He says that about 100 disconnections are being made every month with that trend likely to continue this year. He points out that Bord Gáis had just 12 people dealing with customer debts in 2007 compared to 90 people now. He stresses that disconnection is a last resort for the company.
On the value of the company, Mr Mullins says that its pipeline business is worth in excess of €3 billion, while its energy business is worth over €1 billion. He describes the business as solid and says that its story into the future is very positive.
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AER LINGUS WARNS OF GREENFIELD 2? - Aer Lingus has warned that its cost saving programme, named Greenfield, which was to save the airline €97m in costs, may not be enough to secure the future of the airline. Blaming continued weakness of the Irish economy and pressures on non-controllable costs like fuel, it says it is assessing whether the Greenfield can protect the airline's profitability, or whether further measures are needed. The airline has no further comment, and a spokesman for the Minister for Transport, Leo Varadkar, says the department has noted the statement.
Joe Gill, an airline analyst at Bloxham Stockbrokers, says that Aer Lingus lost €56m at operating level in the first three months of 2011. Putting this in context, he says this equates to €31 for every passenger carried. He says that with oil above $100 a barrel and the continued weak state of the Irish economy, the airline continues to face pressures. He says it will now conduct a full review of all of its costs with the aim of taking out excess expenses. He says he expects the airline will look at staff levels, airport charges and will try to cut its short-haul expenses which remain higher than its competitors.
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MORNING BRIEFS - The euro is near a 17-month high against the dollar this morning as investors wait for the European Central Bank to reinforce expectations of higher rates after its policy meeting later today.
Markets are waiting to see if the ECB chief Jean-Claude Trichet will use words like 'strong vigilance'. This is an old signal that a follow-up to last month's rates rise will happen in June.
*** The euro is trading at $1.4868 cents and 90 pence sterling.
