Aer Lingus Reports 3.3% Increase in Revenue in First Quarter

Aer Lingus today announced its results from 1 January to 31 March 2013, representing the first quarter (Q1) of the Company’s 2013 financial year. The Company delivered an increase in revenue of 3.3%, up to €259.7 million, from €251.5 million in Q1 2012.

Total passenger numbers in Q1 2013 (including Aer Lingus Regional) increased by 2.2%, whilst the overall yield per passenger increased by 3.7%. Long haul yields remained particularly strong, increasing by 5.6% on the previous year. Fare revenue per seat for the first quarter was 6.5% higher year on year.

The first quarter is seasonally loss making, and Aer Lingus recorded an operating loss before exceptional items of €45.5 million, €9.4 million higher than the prior year. This was largely due to the start-up costs for the Virgin wet lease operation in the UK, planned changes to the long haul fleet and slightly weaker trading on UK routes.

Aer Lingus’ gross cash at 31 March 2013 was €1.01 billion, representing a €104.9 million increase in the three months since December 2012. The company expects 2013 operating profits to be broadly in line with levels achieved in 2012.

Commenting on the performance Christoph Mueller, Aer Lingus’ CEO said:

“We are particularly pleased with the performance of our long haul business which is up 14.4% on the prior year. It has, however, been a challenging start to 2013 with higher fuel, airport and one-off costs, together with slightly weaker trading on UK routes.

While we had expected increased operating costs in the first quarter, the Q1 performance highlights the need to continue to review our cost base to protect profitability for the rest of 2013 and beyond. In line with the ongoing requirement to streamline our organisation structure and identify cost saving initiatives, we are launching a voluntary severance programme, with a goal of reducing headcount by approximately 100 staff by year end.

While there are challenges ahead, we are committed to continuing the profitable growth of our business and have commenced a number of initiatives in the first quarter. We have begun operating services on behalf of Virgin Atlantic on routes between London Heathrow and Manchester, Aberdeen and Edinburgh. We announced extensions to our interline and codeshare agreements with Etihad Airways, Jetblue and United Airlines, which have added additional connectivity and options for our customers. We have also recently agreed the damp-lease of three Boeing 757 aircraft to operate on North Atlantic services starting in early 2014.

Trends identified in Q1 2013 including higher airport charges, the strength of long haul and softness in GBP and our UK market have the potential to remain a feature for the rest of the year. On that basis, we currently expect 2013 operating profit, before exceptional items, to be broadly in line with last year.”