Emerald Airlines records losses of €21.35m in first year of operation

The start-up is upbeat despite costs, the directors' report shows

Emerald Airlines operates a regional airline under a franchise agreement with Aer Lingus with bases in Dublin and Belfast.

Start-up airline Emerald Airlines recorded pre-tax losses of €21.35m in its first year in operation, new accounts show.

Emerald Airlines operates a regional airline under a franchise agreement with Aer Lingus with bases in Dublin and Belfast.

The directors state that the airline had 1.5m passengers in 2022 and the company recorded revenues of €81.34m.

In an upbeat report, the directors state that “as expected, we incurred losses in this, our first year of operation, however we are satisfied that we have laid the groundwork for a competitive airline business with a focus on delivery of a high-quality service to its passengers in an efficient cost-effective manner”.

On the firm’s future developments, the directors state that “by December 2023, we were operating seventeen aircraft from our Dublin and Belfast bases, with a route network of thirty routes and with the appropriate crew complements in both bases. This has provided us with a very solid platform for further incremental growth over the next couple of years”.

Cost base

The airline’s cost base totalled €98.02m in 2022 and the airline’s fuel and emission charges of €18.98m topped its employment costs of €15.98m and it employed 400 during the year.

The airline’s other costs included handling, catering, and other operating costs of €20.22m; engineering and other related costs of €16.76m; selling costs of €2.89m; property, IT, and other costs of €5m; landing fees and en-route charges of €4.18m, and non-cash depreciation costs of €5.7m.

The airline recorded an operating loss of €16.67m, finance costs of €4.09m, and currency translation charges of €583,000, resulting in the pre-tax loss of €21.35m.

The Ireland Strategic Investment Fund (ISIF), part of the National Treasury Management Agency, has provided debt facilities to the business and the directors state that subsequent to the year end date, ISIF provided waivers on covenant breaches incurred as at December 31, 2022; June 30, 2023; December 31, 2023, and anticipated at June 30, 2024.

The airline is led by executive chairman Conor McCarthy and chief executive Keith Butler and the directors state that the group “maintains a good relationship with its financiers and are confident based on past history that this relationship will be maintained”.

The directors state that the group “has continued to incur losses subsequent to the year end based on unaudited management accounts. However the losses have significantly reduced”.

Regional routes

During 2022, the airline operated on 22 regional routes across the UK and Ireland and subsequent to the year end, the group leased an additional three aircraft which were put into service during 2023. Key management personnel shared €1.4m in pay in 2022.

The directors also say that subsequent to year end, the group secured £4m (€4.68m) in additional funding “and this was drawn down in October 2023 and carried an interest rate of 6pc”.

At the end of December 2022, the firm had a shareholders’ deficit of €18.52m. Its cash funds increased sharply from €3.38m to €11.2m.