Losses of €53.7m hit airline hard

FIRST-QUARTER operating losses at Aer Lingus grew by nearly 42% to €53.7 million this year but the airline has reiterated previous guidance that it will maintain profitability for 2011 as a whole.

Management said yesterday the airline’s high-profile cabin crew dispute, which disrupted its schedule in January and February, had an impact on first-quarter performance — as well as a drop in demand for some routes — adding the performance was in line with its expectations.

Chief executive Christoph Mueller also repeated his line from Aer Lingus’ 2010 annual results announcement in early March that management expects the company to report a profit in 2011, but for the actual level of profit to be “much lower” than in 2010.

Last year, which was described by management as another “difficult year”, saw Aer Lingus bounce back from a pre-tax loss of €154.8m to a pre-tax profit of €30.4m. A combination of rising fuel prices and airport charges is likely to erode much of that profit this year.

Yesterday’s first-quarter update also showed a year-on-year fall in revenue of 4.8% — short-haul revenues falling by 3.4% to €132.2m, compared to the first three months of last year.

Aer Lingus also issued its latest monthly passenger numbers yesterday, showing it carried 822,000 people during April. This was up by over 19% on the corresponding month in 2009, despite last year’s volcanic ash disruptions.

The airline also warned yesterday of further cuts, on the fear that its €97m ‘Greenfield’ cost reduction programme might not be enough to safeguard the company.

Mr Mueller was paid over €1.13m last year — his first full year in charge of the company — of which €483,000 was a performance-related bonus. In its latest annual report, Aer Lingus said it will continue to “incentivise executives and senior management with performance-related bonus opportunities.”

Meanwhile, today’s agm will see board member Tom Corcoran retire after four years as a director.