Aer Lingus posts steady first-quarter results

Aer Lingus’s continued focus on its long-haul routes allied with containing costs led the airline to a strong set of opening quarter results.

Aer Lingus posts steady first-quarter results

Particularly impressive performance on long-haul routes drove revenues 8% higher in the opening three months when compared to the same period last year while its short-haul business continued to decline.

The long-haul business delivered revenue growth of close to 40% pushing receipts to €82.5m, up from €59m in the opening months of 2014.

Despite the improved performance, Aer Lingus posted a €48.4m loss for the quarter as is the norm during the opening months of the year.

Commenting on the results, Aer Lingus chief executive Stephen Kavanagh said he was satisfied with the company’s performance and said it would continue with its demand-led strategy to eke the most benefit from the struggling short-haul business.

“I am pleased to report that Aer Lingus achieved revenue growth of 7.9% to €280m, delivered by our demand-led capacity decisions. Operating results were stable in the seasonally loss-making first quarter, at €48.4m before net exceptional items.

“Of particular note was the 39.6% increase in our long-haul revenues as new products, routes and increased frequencies continue to build out our Dublin Atlantic hub.

“In the coming quarters we will focus on capitalising on-peak demand opportunities, while aggressively managing our cost base.

“On short haul we will continue our demand-led strategy to drive occupancy, manage per available seat yield and retail revenue per passenger. On long haul, we will see the commencement of the new Washington route as well as increased frequencies on New York, San Francisco and Orlando routes. Overall, our forward trends are positive,” Mr Kavanagh said.

Mr Kavanagh again reiterated his desire to see IAG’s bid for the airline succeed saying it would deliver significant benefits for all Aer Lingus shareholders.

Notwithstanding the outcome of the Willie Walsh-led €1.4bn bid and the opportunities it would deliver for the former national carrier, the Aer Lingus chief said he was focused on building the airline. IAG’s pursuit of Aer Lingus has been a drawn-out affair stretching back to late last year when it made its first approach.

An improved offer followed shortly after while the third €1.4bn bid won the approval of Aer Lingus’s board but failed to convince other stakeholders.

A number of stumbling blocks came to light including the length of time that IAG would agree to operate existing routes to Cork and Shannon airports, in particular.

Having already knocked back IAG’s advances saying the offer did not go far enough, a decision from the Government as to whether to offload its 25.1% stake in the airline is expected imminently, once a government-appointed review group report has been considered by Transport Minister Paschal Donohoe.

Even if the Government decides to relinquish its shareholding to British Airways’ parent-group, a Dáil vote will be needed to approve the decision.

“Aer Lingus continues to support the approach to the airline from IAG and once again highlights the benefits of the deal for all stakeholders,” said Merrion Stockbrokers head of research David Holohan..

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