Aer Lingus flying high with €27m profit

AER LINGUS has confirmed the airline is heading for a profit of 40m this year instead of a €27m loss previously projected.

But the turnaround has come at a heavy cost, particularly in large-scale job cuts.

Aer Lingus was also heavily criticised by the Irish Travel Agent's Association (ITAA) last month after imposing an 80% cut in commission paid to travel agents. ITAA claims the reduction will put many of its 375 members out of business.

Speaking yesterday as the company announced 65m in reduced business-class air fares, Aer Lingus chief executive, Willie Walsh said:

"We are committed to reducing our fares across the board. We have already cut our economy fares this year, making over three million cheap seats available at prices up to 60% lower than last year. More and more customers are responding to the combination of low fares and good service. Our costs are going down, our fares are going down, our passenger numbers are going up.

"This is the only way to a sustainable, profitable airline," he said.

Thirty per cent of all Aer Lingus sales are now via the internet up from just 2% less than a year ago.

More than half the electronic sales come from outside Ireland.

Meanwhile, the Irish Airline Pilots' Association (IALPA)

says the government must facilitate external investment in Aer Lingus to promote the airline's future growth.

IALPA president Mark Tighe told the conference the industry was set to thrive but he called on the Government and regulators to create the conditions for future growth.

"There are many elements necessary to ensure a thriving and developing aviation industry," Mr Tighe told a conference hosted by the association in Dublin yesterday.

The conference heard Dublin passenger numbers went up 13% in the first quarter of this year and that Dublin airport would reach maximum capacity of 20 million passengers a year by 2007. Also, delegates were told Shannon airport could thrive through investment in freight distribution, aircraft maintenance and passenger demand.

Also yesterday, Ryanair launched four new routes from its base at Frankfurt-Hahn and increased its services from the German airport to London. Announcing the new routes, Chief Executive Michael O'Leary claimed Irish airports operator Aer Rianta turned down an offer from Ryanair to base new aircraft at, and open new routes from Shannon airport next summer.

"The contrast between Ryanair's rapid growth in Europe could not be more marked with the continuing failure of the high-cost Aer Rianta monopoly here in Ireland," he said.

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