Dublin headquartered start-up airline Emerald Airlines recorded pre-tax losses of €21.35m in its first year in operation, new accounts show.
Emerald Airlines operates a regional airline under a franchise agreement with Aer Lingus with bases in Dublin and Belfast.
The directors state that the airline had 1.5 million passengers in 2022 and the company recorded revenues of €81.34m.
In an upbeat report, the directors state that "as expected, we incurred losses in this, our first year of operation, however we are satisfied that we have laid the groundwork for a competitive airline business with a focus on delivery of a high-quality service to its passengers in an efficient cost-effective manner".
On the airline firm's future developments, the directors state that "by December 2023, we were operating 17 aircraft from our Dublin and Belfast bases, with a route network of 30 routes and with the appropriate crew complements in both bases. This has provided us with a very solid platform for further incremental growth over the next couple of years".
The airline's cost base totalled €98.02m in 2022 and the airline’s fuel and emission charges of €18.98m topped its employment costs of €15.98m and it employed 400 during the year.
The airline’s other costs included handling, catering and other operating costs of €20.22m; engineering and other related costs of €16.76m; selling costs of €2.89m; property, IT and other costs of €5m; landing fees and en route charges of €4.18m and non-cash depreciation costs of €5.7m.
The airline recorded an operating loss of €16.67m and finance costs of €4.09m and currency translation charges of €583,000 resulted in the pre-tax loss of €21.35m.
The Ireland Strategic Investment Fund (ISIF), part of the National Treasury Management Agency (NTMA) has provided debt facilities to the business and the directors state that subsequent to the year end date, ISIF provided waivers on covenant breaches incurred as at 31 December 2022, 30 June 2023, 31 December 2023 and anticipated at 30 June 2024.
The airline is led by executive chairman Conor McCarthy and CEO Keith Butler and the directors state that the group "maintains a good relationship with its financiers and are confident based on past history that this relationship will be maintained".
Emerald Airlines' directors state that the group "has continued to incur losses subsequent to the year end based on unaudited management accounts. However the losses have significantly reduced".
During 2022, the airline operated on 22 regional routes across the UK and Ireland and subsequent to the year end, the group leased an additional three aircraft which were put into service during 2023.
Key management personnel shared €1.4m in pay in 2022.
The directors also disclose that subsequent to the year end, the group secured £4m in additional funding "and this was drawn down in October 2023 and carried an interest rate of 6%".
At the end of December 2022, the airline firm had a shareholders’ deficit of €18.52m. The firm's cash funds increased sharply from €3.38m to €11.2m.
Reporting by Gordon Deegan
