Aer Lingus announces €93m loss

Aer Lingus today reported losses of €93m for the first half of 2009 - almost four times the figure for the same period last year.

Blaming a Government travel tax and weak consumer confidence, the airline said fares were continuing to fall and warned ongoing cost-cutting measures were needed.

Colm Barrington, Aer Lingus chairman, described the market as extremely challenging with revenue down 12.2%.

“The scale of the operating loss clearly illustrates the extent of the challenges facing Aer Lingus in the current environment,” he said.

“While traffic volumes have stabilised, consumer confidence remains weak and we see no sign of any improvement in the near term."

The airline had an operating loss of €23.4m in the first six months of 2008.

The former national flag carrier said the €10 per departing passenger travel tax introduced by the Government was short-sighted and counter-productive.

It also warned planned hikes in charges at Dublin Airport could hurt profits at the base.

Mr Barrington said: “Our results in the period have also been adversely affected by the imposition of the €10 passenger departure tax in Ireland, which we believe is very short sighted and counter productive in the current, very difficult conditions being faced by airlines and by the Irish business and tourism sectors.”

Detailing its first half results, Aer Lingus said fuel costs were up 10% to €189.6m and passengers up 1.7% to 4.943 million.

Numbers on long haul routes fell 18.1% but short-haul capacity was up 4.3% due to the new base at London Gatwick.

Further reductions in capacity are planned for the winter, with short haul routes from Dublin dropping by 14% and 24% on long haul routes.

Total revenue dropped 12.2% to €555m.

Fares were down 17.1% on 2008, with a 13.1% fall on average short haul fares and an 18.5% cut on average long haul fares.

Mr Barrington warned further tough measures were needed to drive the company back to profitability.

“This revenue environment, coupled with an uncompetitive cost base, means that we must now take difficult but necessary steps to address our business model and cost base so that we ensure Aer Lingus is viable over the long term.”

New CEO Christoph Mueller, who replaces Dermot Mannion, will start on Tuesday.

Mr Mannion stepped down in April.