Gathering events boost airline sales

Aer Lingus sold every single seat on its transatlantic routes over the summer as The Gathering boosted the number of visitors using the airline.

The demand for long haul routes from Aer Lingus still outstripped supply despite the company increasing the frequency and number of routes to the US.

CEO Christoph Mueller said that the market had handled the extra demand.

“Long haul revenue growth was impressive and the market has absorbed the extra capacity we added on the North Atlantic this summer,” he said.

The strength of the long haul section offset weak short haul earnings which were impacted by the good weather in Ireland and weak European economy.

As a result the company is guiding that it will deliver profits in line with the €60m reported last year,

“We do not expect any improvement in the short haul environment for the rest of 2013 which remains characterised by heavily discounted fare offerings across Europe. The 2013 outlook on long haul remains positive with the exception of some weakness expected in November which was previously communicated.”

The key to Aer Lingus managing to maintain its earnings while other airlines are missing their has been tight cost management. The company has managed to squeeze an increase in capacity of nearly 3% while keeping the increase in costs below 0.5%.

Mr Mueller expressed dissatisfaction that the pensions deficit still hasn’t been resolved.

“I must again express my disappointment that the ongoing process to resolve pension issues continues to have a negative impact on our ability to deliver efficiencies and cost saving measures, particularly in respect of our recent voluntary severance programme,” he said.

Davy stockbroker, analyst Stephen Furlong described the performance as strong.

“Aer Lingus delivered a strong trading performance in Q3 with an operating profit, net of exceptional items, of €94.9m — €4m, or 4.4%, higher than the previous year. While short-haul revenue was down 5.8%, total revenue was maintained, helped by the continuing strength of long haul, retail revenue initiatives and contract flying,” he said.


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