Aer Lingus recorded an operating profit before exceptional items of €45 million for 2022, following two years of significant losses.
But profits are still down on the €276 million recorded in 2019, before the pandemic.
Passenger revenue for the year rose to €1.68 billion as the airline continued to recover from the pandemic restrictions which saw aviation grounding to a halt for much of the previous two years.
Today's results show the airline reached 2019 capacity levels in the final quarter of last year as it ramped up its operations.
Losses before exceptional items of €95m in the first half of the year were offset by €139 million operating profit before exceptional items in quarter three and followed by €1m operating profit before exceptional items in quarter four.
The airline said leisure travel has been key to recovery - particularly in the peak holiday periods, with business travel also recovering but at a slower pace.
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The figures show there has been high market demand for European sun destinations and North Atlantic routes, with notable strength in inbound US passengers.
The new Aer Lingus Manchester base also performed well in its first full year of operations, it said.
Aer Lingus CEO, Lynne Embleton, said she could see further growth from there.
But she also said it was not likely that the airline would consider setting up another international hub elsewhere, following that success.
IAG chief executive, Luis Gallego, said demand remains strong and the group is looking at robust forward bookings at this point of the year.
"While global macro-economic uncertainties causing higher oil prices, exchange rate fluctuations, rising interest rates and inflation could impact aviation this year, there is much for Aer Lingus to build on in 2023," the airline said in a statement accompanying its results.
Aer Lingus is putting additional capacity on its European routes this year and adding three new summer routes to Kos in Greece and Sardinia as well as Brindisi in Italy.
"We lost €95 million in first half, so it's a solid result and it gives me confidence that recovery is well underway," Lynne Embleton said on Morning Ireland.
"We've still got some way to go to get back to pre-Covid levels but we're making good progress," she added.
Ms Embleton said the summer peak made a strong contribution towards the overall performance with leisure travel bouncing back but business travel was lagging slightly.
The airline recruited 1,000 additional staff last year and was recruiting another 1,000 this year to ensure that it is resourced for the busy summer period.
The CEO said all the players should have learned from the difficulties of last year and there should be a better summer than 2022.
Compensation from the IT outage that disrupted the airline's operations last September has been fully paid out.
"That was an unusual event. We had our primary network cable damaged and our secondary backup failed. But what we've done is we've put a third network link in with a different service provider just to provide additional resilience," Lynne Embleton explained.
She said recent drone activity at Dublin Airport, which disrupted operations, had been a major inconvenience to passengers and airlines as well as being a safety issue.
"There needs to be strict penalties to act as a deterrent," she suggested.
"But there also needs to be technology and process changes too. It is really critical that the airport, regulators and government get together with some urgency," she said.
Ms Embleton said the airline had experienced two diversions and 1,700 customers had been impacted.
Regarding charges at Dublin Airport, Ms Embleton said they have to be competitive if the airline is to grow and provide more services.
She added that customers should rightly expect a clean and functioning airport.
She said Aer Lingus certainly does not believe charges should be any higher than those set by the regulator and the airport now needs to focus on delivery.
IAG back in profit
IAG, which owns Aer Lingus, along with British Airways, Iberia and Vueling reported an improved financial performance for 2022, with operating profit at €1.22 billion.
It said profits would grow again this year.
The acquisition is driven by IAG's confidence that demand for travel will continue to recover from the pandemic.
For 2023, the airline group forecast profit in the range of €1.8 billion euros to €2.3 billion, up 88% on 2022 at the top of the range.
"2022 was a year of strong recovery, driven by sustained leisure demand and markets reopening. At this point of the year we continue to see robust forward-bookings, while also remaining conscious of global macro-economic uncertainties," Luis Gallego said.
On sustainability he said the group has set a target of using 10% sustainable aviation fuel by 2030 and achieving net zero by 2050 and has invested $865m in future SAF purchases.
But he said the industry cannot do this alone.
"We would like to see Irish and other European governments provide further policy support for SAF to boost its production," he said.
Ms Embleton said airlines can commit to buying SAF and that makes a market, but the industry needs the EU and Ireland to provide the right incentives for production.
"In the way the US has stolen a march on that and the EU and Ireland need to catch up," she said.
