Aer Lingus intends to hold a shareholder vote next month to formally approve its pension deficit solution, after employees yesterday voted in favour of its funding plan.
The airline is set to pump another €50m into the €780m deficit-lumbered Irish Aviation Superannuation Scheme (IASS) — the main pension fund for its employees and those of the Dublin Airport Authority.
This would bring its total contribution to €190m. Yesterday saw over 70% of Siptu, Impact and TEEU-affiliated Aer Lingus employees vote in favour of the proposal, which will now go to a shareholder vote/EGM in mid-December.
The airline’s management has already said that this expert panel recommendation is the only solution available.
It is understood the vote will not need 75% shareholder approval, but simply a majority. A third of Aer Lingus’ shares are publicly owned, with Ryanair owning 29.8%, the Government nearly 25% and Etihad Airways just over 4%.
The DAA, which has offered to invest €72m into a new defined contribution scheme, welcomed the outcome of yesterday’s ballot, calling it “a further step towards resolution of the challenges faced by the IASS.”
On a busy day for Aer Lingus, the airline also announced an expansion of its long-haul services — including increased frequency on its San Francisco route and a resumption, after five years, of its Washington DC link — which tied in nicely with a strong set of long hauldriven
Operating profit for the three months to the end of September grew by 19%, year-on-year, to €112.9m; representing Aer Lingus’ strongest quarter since the financial crisis.
Short-haul revenue recovered with a 5.5% annualised increase, to €274.3m, but long haul also drove figures with a 34% rise in revenue to €175.9m.
Aer Lingus’ total third-quarter revenues topped €531m; up by almost 14% on the same period last year.
October passenger figures also produced yesterday showed a 2.3% year-on-year increase to 979,000, with long-haul usage up nearly 30% on the same month last year, while short haul was marginally down at 738,000.
The airline has now carried nearly 9.7m passengers in total this year; up by 4.2% year-on-year.
Regarding its search for a successor to outgoing CEO, Christoph Müller, who is scheduled to stand down next May after five years in the job, Aer Lingus confirmed that interviews are underway, and an announcement should be made during the first quarter of next year; adding it is likely Mr Müller will have left before May.
Speaking yesterday, Mr Müller said the long-haul expansion plans will strengthen both Aer Lingus’ and Dublin Airport’s position in traffic between Europe and North America.
He added that if current trading levels are maintained, the airline’s 2014 operating profits should beat last year’s total of €61.1m.
Back in June, Aer Lingus said its full-year profits would fall by 10%-20% this year due to the effect of strike action, but a month later it reinstated earlier guidance — of figures at least matching last year— after slashing first-half losses by 40%.
“This is a reflection of the inherent strength of our business model and the success of management actions taken to address the effects of industrial disruption in the second quarter,” Mr Müller said of the latest quarterly recovery.
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