Trans-atlantic and franchise ventures pay off for Aer Lingus
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Aer Lingus managed to reduce its first half loss with its transatlantic and franchise ventures despite a EUR10 million impact from strike action.
The Irish carrier has posted an operating loss before net exceptional items of EUR9.9 million for the first half of the year but this has improved 39.6% compared to the same period last year.
It would have broken even had it not been impacted by strike action, which set back the airline EUR10m.
An operating profit of EUR38.7m was also the best reported result for the airline’s second quarter in at least five years, up 32.9% year-on-year.
The carrier has attributed the results to growth in routes to and from the US, as its short-haul traffic remains stagnant.
However with its franchise numbers in the mix Aer Lingus saw a 2.1% increase in short-haul passengers, with Aer Lingus Regional carrying 26% more people on flights in the first half of the year compared to H1 2013.
“We are delighted to announce that Aer Lingus’ successful business model has delivered a 40% improved operating result and a 26% increase in free cash flow in H1 2014 despite the negative effects of lost revenue caused by the cabin crew industrial action,” said CEO Christoph Mueller. “We sold the 25.3% additional long-haul capacity deployed in Q2 2014 with 29.2% more revenue passenger kilometres; 5.3% higher long haul yields and a 2.6% increase in long-haul load factor. Aer Lingus’ transatlantic offering represents a real low-cost long-haul service and we continue to attract more and more passengers in the North Atlantic transfer market from both European and US locations, most of them through our online booking portal.”
The carrier said it expects its operating profit to be in line with last year’s EUR61.1 million total, and is seeing the benefits of recent changes.
“During the past two years, we have invested selectively in carefully chosen opportunities such as increased transatlantic flying, contract flying on UK domestic routes and an aircraft leasing joint venture. We are now seeing returns from our investments in these new services and areas and the positive impact of these returns on our business,” Mueller added.
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