Aer Lingus will not cede European market to rivals despite focus on US, says IAG

Lynne Embleton, chief executive of Aer Lingus, said demand has been strong for its short-haul flights to Europe. 

Aer Lingus has denied that it is ceding the European market to other airlines such as Ryanair as it continues to focus on growing its transatlantic routes and in the US market.

The comments come as the airline’s parent company IAG released its half-year results for 2023 which showed operating profit of €1.26bn—up from a €446 million loss during the first half of 2022. 

Leisure travel has boomed since pandemic restrictions ended last year, driving up ticket prices and helping deliver huge profits for airlines despite the squeeze on household incomes from high inflation and rising interest rates. Along with Aer Lingus, IAG also operates the British Airways and Spanish airline Iberia.

IAG said that it is concentrating on capacity restoration in their strongest markets with Aer Lingus focusing on the US including targeting new cities such as Cleveland, Ohio, as well as reopening previous destinations such as Hartford in Connecticut. 

However, when asked whether the increasing focus on the US meant that Aer Lingus was leaving Europe to competitors like Ryanair, Lynne Embleton, chief executive of Aer Lingus, said “absolutely not”.

She said that the airline has grown their key summer destinations and have put “significant capacity” into their Mediterranean routes. “We've filled our seats so well this year. It just shows how much demand there is and customers wanting to fly with Aer Lingus on short-haul,” she said.

According to IAG's results, Aer Lingus posted an operating profit of €40m, driven by growth in its US markets and rising demand for short-haul European flights, but profits remain approximately half of pre-pandemic levels. During the same period in 2022, the airline lost €83m.

Rising demand also saw a full recovery in Aer Lingus passenger numbers in the first half of 2023 and were slightly above 2019 levels, IAG said. Luis Gallego, chief executive of IAG, said the company is aiming to be back to pre-pandemic capacity at the end of this year. 

“Customer demand remains strong across the Group, particularly for leisure travel, with around 80% of passenger revenue for the third quarter already booked. And our airlines have put in place plans to support operations during the busy summer period,” he said.

So far, IAG is running at 94% of the capacity it had in 2019.

Air France-KLM

Air France-KLM also posted better than expected earnings for the April to June period as a result of robust demand for long-haul and premium leisure travel, even as business travel lags.

Its operating profit jumped to €733 million from €386 million last year.

The company flew 24.7 million passengers across those three months, up 8.2% from a year earlier. Its capacity was 92% of 2019 levels but it expects that figure to grow to 95% by the end of the year.

Earlier this week, Ryanair posted €663m in profit after tax for the three months to the end of June. It generated €3.6bn in total revenue, a 40% increase compared to the same period in 2022 with passenger numbers also increasing by 11%.