Aer Lingus denies silence on profits ‘to avoid strike’

AER Lingus has hit out at claims from one of the country’s top airline analysts that its refusal to provide profit guidance for this year is a “kick for touch” to avoid a short-term strike this summer.

Joe Gill of Bloxham Stockbrokers made the comments yesterday after Aer Lingus said at its AGM on Friday that it could not provide earnings guidance due to the uncertain trading environment.

Aer Lingus spokesman, Enda Corneille said Mr Gill’s claims were “ludicrous” and “mischievous”.

“It is not a tactic to avoid a strike,” he said, adding that Mr Gill’s comments are “completely offside”.

Mr Gill also disputed the airline’s claims that it is facing “the most difficult period in its 73-year history”.

“Seventy three years takes in a lot. It includes the closure of long haul in 1947, a sequence of equity injections and a near-death experience after 9/11.

“Aer Lingus’s business model is subject at present to a vicious attack from a fast contracting home economy, intense competition and stubbornly high per passenger costs,” he said.

NCB economists said that Aer Lingus should provide further detail on winter 2009/2010 capacity and cost-cutting plans when announcing the winter schedule this week.

Goodbody’s Eamonn Hughes said that at the time of the Aer Lingus 2008 results hints from management suggested that further restructuring was likely, but comments indicated that any provisions were likely to be lower than the €€118 million taken in 2008.

“However, the wording of the AGM statement would point to something more fundamental afoot, which would likely have higher cost implications, with knock-on consequences for the diminishing cash pile,” he said.

Meanwhile, Ryanair confirmed its chief executive, Michael O’Leary, sold five million shares at €3.75 each on Friday raising 19m.

The sale means Mr O’Leary now owns just over 60m shares in the airline, giving him a stake of 4%.

A Ryanair spokesman said the share sale was “a private matter”.

Mr O’Leary has reduced his stake in Ryanair several times before.

In 2003 he sold 4m shares, raising €19.5m, and he raised a further almost €30m in June 2005 by selling 6m shares at €6.50 each.