Aer Lingus’s legal spend more than dividends

Aer Lingus have spent more money on lawyers defending Ryanair takeover bids than they have ever paid out in dividends to shareholders.

CEO of Aer Lingus, Christoph Mueller said that the company has great ideas on what they could spend this money on but it was tied up in defending the airline.

“This is the third time that we have incurred defence costs. We looked at the figures and we will have paid more in defence costs then we have paid in dividends to our shareholders.

“We have good ideas where this money could be spent that would be better than paying lawyers,” he said.

Mr Mueller made his comments as the company reported strong profits of €90.9 million despite weaker business demand on core routes to London during the Olympic Games and fuel price and airport charge inflation.

The airline’s total passenger numbers in the third quarter (including Aer Lingus Regional) grew by 2%.

The company’s yield per passenger also increased by 7.2%. The airlines long haul business was performed particularly well increasing by 11.5% compared to last year.

“I am particularly proud that our team has achieved this result against the backdrop of the third Ryanair offer for the group, formally made on July 17.

“As a consequence we remain subject to the Irish Takeover Rules and have to conduct our business within its restrictions,” he said.

Aer Lingus revealed that they had paid €2.3m on advisory, legal and other fees as a result of Ryanair’s third offer for the group. In total, it incurred €4.9m of exceptional items in the third quarter of 2012 compared to €0.1m the same time last year.

The company’s on-going cost saving plan which is aimed at saving €100m was reported as over-achieving its targets. There are still outstanding problems with Aer Lingus, in particular the looming pensions crisis.

Mr Mueller said that they had a number of proposals with unions and pension fund trustees and that he was optimistic that the planned industrial action by unions could be avoided.

“Industrial action is planned for two weeks, so there is still time to return to the negotiations. It is still too early to give a recommendation as to whether it will go ahead. If it does our passengers will be our priority,” he said.

The former national airline’s CEO praised the Government for being intelligent shareholders and waiting for the pensions issue to be solved before off-loading their 25% stake in the carrier.

Despite the positive tone of the interim statement, Mr Mueller criticised Dublin Airport’s shortfalls for hampering growth.

“The growth potential of our regional short haul business in 2013 is currently restricted by a lack of bussing gates in our terminal in Dublin,” he said.