Disputes hit Aer Lingus results

Profit at Aer Lingus surged in the second quarter, but the impact of the industrial action by cabin crew weighed on half-year results.

The airline reported a loss of €14.2 million for the six-month period, compared to more than €20 million in the first half of 2010, but operating losses widened to €27.8 million compared to a €19 million loss reported in the same period last year.

Aer Lingus was hit by industrial action involving cabin crew earlier this year, causing the airline to cancel a number of flights or make alternative arrangements for passengers. Passenger numbers were down 1 per cent over the six months, although yields rose more than 8 per cent.

Revenue for the first half of the year rose 5.8 per cent to €569.1 million, while staff costs fell by 5.9 per cent

A settlement with the Revenue Commissioners in respect of packages given to employees who were paid redundancy before being rehired on different terms and conditions impacted cash flow, leaving Aer Lingus with €16 million, compared with €56 million a year earlier.

However, the second quarter was more positive. Operating profit rose to €25.9 million from €18.8 million a year earlier. Pretax profit was significantly higher at €42.2m compared to €15.4 million in 2010.

Passenger numbers also rose, increasing by 8.3 per cent overall, with a rise of 8.6 per cent in short haul and 4.8 per cent on long haul routes.

Chief executive Christoph Mueller was upbeat about the company's performance, describing the second quarter as "strong".

Although economic conditions in Ireland remain challenging, we are pleased with the booking profile for the rest of the year and we are positive about our trading prospects for the remainder of 2011," he said. "We expect revenue growth in the second half to be broadly similar to that of the first six months. As a result, we are more positive about the profitability of the business in 2011 than we were at the start of the year."

Shares in the airline were up 7 per cent on the Dublin market today, trading at 63.2 cent.