Aer Lingus faces tough test but signs hopeful

AER Lingus is facing a big test this summer, according to analysts who believe things are looking up for the airline.

It reported a 4% increase in booked passengers last month to 911,000. However, this increase is distorted given that it is compared with May last year when there were 11 days when volcanic ash clouds prevented all scheduled flights from operating.

Davy stockbrokers said with the threat of industrial action resolved, the key for the company now is to perform well this summer.

Short-haul booked passengers were 832,000, a 4.4% increase on May last year while long-haul booked passengers last month were 79,000, equal to May 2010.

Aer Lingus May load factor, which is a measure of seats filled fell by 4.7 points on the same month last year to 74.6%. Short haul booked load factor was 75.1%, down 4.9 points on May 2010, with capacity up 10.6% due to the impact of the ash clouds in May 2010.

Long-haul load factor was 73.6%, a decrease of 4.3 points on May 2010, with capacity up 6.6% after the ash clouds in May 2010.

According to Davy, the fall in load factor can likely be explained by an inflated May 2010 booked load factor due to customers rebooking their flights multiple times.

The Aer Arann or Aer Lingus regional service which began in spring 2010, carried 69,000 passengers during May, a rise of 86.5%.

Goodbody analyst Eamonn Hughes said April and May were always going to be a “little unusual” given the volcano last year but at this stage of the year estimates suggest promising revenue passenger kilometres, a measure of the volume of passengers carried and load factors for the half year. A revenue passenger is a paying passenger.

Meanwhile, Bloxham stockbrokers said in the past year, Ryanair has dropped 150 routes and opened 300. British Airways, Lufthansa and Air France-KLM combined dropped just 30 routes in the year.