Aer Lingus owner IAG boosts profits amid travel chaos and fares bolstered by cancellations

IAG's latest earnings reports showed them return to the black on Friday, as cancellations cut capacity but bolstered fares. 
Aer Lingus owner IAG boosts profits amid travel chaos and fares bolstered by cancellations

CEO of Aer Lingus Lynne Embleton: Demand in recent months led in particular by its southern European or 'leisure' routes.  

Summer travel chaos is providing a perverse boost to the fortunes of the battered European airlines, with Aer Lingus-owner IAG returning to profit after tapping higher fares amid major cancellations and booming demand. 

IAG, which also owns British Airways, Vueling, and Iberia, along with Air France-KLM returned to the black, their latest earnings reports showed on Friday, as cancellations cut capacity but bolstered fares. 

Fares have been exceptionally strong across its operations, IAG chief executive Luis Gallego told reporters. “We see a very strong yield, and we see demand recovering and load factor increasing,” Mr Gallego said. Bookings at this early stage appear "very strong" through the rest of the year, the IAG boss said.  

Aer Lingus posted a profit of €15m in the latest quarter, its first for two-and-a-half years, although losses for the full six months came to €95m. The airline had earlier this year tapped an additional €200m loan on top of an existing €150m facility from the Government's Ireland Strategic Investment Fund. 

Heathrow has been among the prominent airport hubs to have mandated airlines to cancel flights and the airport may extend its so-called capacity cap into the autumn. Heathrow is key for Aer Lingus and the other airlines, but like Dublin, Amsterdam, and others, it has struggled with summer staff rosters to cope with a surge in travellers and Covid-19 illnesses.                                                                            

Lynne Embleton, the chief executive at Aer Lingus, told reporters demand in recent months was led in particular by its southern European or 'leisure' routes. Speaking at Friday lunchtime, she said Aer Lingus had no planned cancellations over the Bank Holiday weekend. 

Cancellations in recent days were caused by mandates at Heathrow and Amsterdam airports "and congestion in the likes of Frankfurt and Paris as well," she said. Aer Lingus was keeping its schedules under review should Heathrow extend its capacity cap, Ms Embleton said. 

She had told the Oireachtas Transport Committee on Tuesday that advice by Dublin for passengers to arrive earlier than normal was unnecessarily leading to "congestion at check-in and at security".  Air France-KLM also on Friday said it was back in the black in the quarter for the first time since the onset of the Covid crisis.

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