Aer Lingus has "too many resources and will need to adapt", the airline said on Friday, as it continues to grapple with the impact of widespread Covid-related limitations on its services. It highlighted travel restrictions in the Republic, which it described as "the most stringent" in Europe.
“These restrictions, and the absence of a Government-approved re-start plan for aviation in Ireland that clearly sets out the metrics that will allow international travel to resume, means that airlines are unable to plan their business and the bookings for the summer are low,” Aer Lingus said in a statement.
It went on to say it has too many resources “and will need to adapt and right-size and right-shape its structure” so that it can emerge from the pandemic as “a more productive and cost-efficient organisation than it was previously”.
Aer Lingus-owner IAG drew down the remainder of an agreed €150 million debt facility provided by the State during the first quarter.
Having drawn down an initial €75 million in the last three months of 2020, the airline’s parent drew down the remainder of the financing recently.
The funding came via the Ireland Strategic Investment Fund’s pandemic recovery fund, which has agreed a three-year loan for the carrier.
IAG also said it also drew down £2 billion (€2.3 billion) in borrowing for British Airways during the quarter
It said Aer Lingus's capacity continued to be driven by cargo needs, with flights operating regularly to New York, JFK, Chicago and Boston with very low passenger load factors. The domestic route between London Heathrow and Belfast performed well, with sustained business traveller demand, the group added.
Group capacity
It forecast only a minimal pick-up in group capacity to 25 per cent for the April to June quarter, remaining cautious despite hopes that European travel will start to recover from late May onwards. IAG also owns Iberia and Vueling in Spain.
The group posted an operating loss before exceptional items of €1.14 billion for the first quarter, slightly better than the €1.17 billion loss forecast by analysts.
Revenues were 78.9 per cent lower across the group to €968 million, with passenger revenue down 88.4 per cent to €459 million.
"We're taking all necessary actions to ensure the financial health of our business for the long-term, including last year's successful €2.7 billion capital increase, and remain focused on reducing our cost base and increasing efficiencies," said chief executive Luis Gallego.
The group said it would not provide profit guidance for the year due to uncertainty over the lifting of travel restrictions and the continued impact and duration of Covid-19.
It predicted it will take until at least 2023 for passenger demand to return to the levels of 2019.
Aer Lingus reported an operating loss of €103 million before exceptionals for the first quarter. The result followed a €361 million loss for 2020.
