Aer Lingus makes strong start to second quarter

Aer Lingus saw a near 27% increase in passenger numbers last month, starting the second quarter of the year strongly after parent group IAG reported solid earnings for the first three months.

IAG — which also owns British Airways, Iberia and low fares operator Vueling – yesterday reported a 10% year-on-year increase in group traffic for April.

The group — led by former Aer Lingus chief Willie Walsh — also reported a 9.7% year-on-year rise in first quarter operating profit (before exceptional items) to €170m, although revenue for the quarter was down 2.8% year-on-year at €4.93bn.

IAG said it expects quarterly revenue per passenger mile flown to register its first year-on-year increase since 2014 in the second quarter. Though that measure of sales relative to flight capacity was down 3.1% at constant currency in the first quarter, Mr Walsh said the performance since last year has been encouraging.

“What we’re seeing is that trend, which was an issue commented on by a lot of airlines. We’re seeing an improving trend and it’s moving faster than we would have expected,” he said.

IAG’s comments chime with recent assessments by Air France-KLM and Lufthansa which have also said that the pricing environment and bookings are improving heading into the summer.

IAG — whose shares rose by over 6% yesterday — also said it expects Vueling to grow in Italy on the back of ongoing problems facing Italian flag carrier Alitalia. However, IAG said it is not interested in a takeover of the struggling Italian airline,which this week filed to be put under special administration for the second time in less than a decade. The process will lead to the loss-making airline being overhauled, sold off or wound up.

Mr Walsh said: “We clearly see some organic growth opportunities in Italy. We will look to see if there’s an opportunity to speed up growth... focused on Vueling,”

IAG also said that its new low cost, long haul airline Level will add two or three new aircraft in 2018 and operate from at least one new European base. The group said in March that it would launch Level this year as a Barcelona-based airline to serve the Americas, operated by Iberia staff and crew with just two Airbus A330. Mr Walsh said bookings for the summer were “stunning.”

Aer Lingus Regional — the UK and Irish regional service operated on a franchise basis by Stobart Air — has said it saw a 17% increase in passenger numbers on its Donegal-Dublin route.

Aer Lingus Regional has operated the route on a public service obligation basis since early 2015 and has seen consistent growth since.

A total of over 40,000 people flew with the service out of Donegal — either to Dublin or Glasgow — in 2016.

“The recent recognition of Donegal Airport as the second most scenic airport landing in the world will hopefully further stimulate interest in Donegal as a tourist destination,” said Ronan Whitty, head of revenue management at Stobart Air.

  • Additional reporting by Reuters

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