Belfast Telegraph

Thursday 10 July 2014

Aer Lingus delays delivery of long-haul aircrafts

Aer Lingus

Aer lingus could spend around €375m (£319m) less than expected over the next three years after it announced plans to shrink the size of its fleet and delay plans to upgrade older planes.



The Dublin-based airline, which has issued three profits warnings already this year, said yesterday it will reduce the size of its transatlantic fleet.

The company's chief executive designate, Christoph Mueller, will also take up his post in four weeks time, a month earlier than previously announced, as Aer Lingus battles to cut costs.

Analysts said Aer Lingis will be able to delay spending between €100m and €125m each of the next three years after it postponed delivery of three Airbus 330s until the second half of 2013 and the |delivery of six A350s until at least 2015.

“These agreements represent a successful outcome for Aer Lingus,” the company said in a statement, adding the new delivery plan was negotiated at “no additional cost.”

The move will reduce the airline's long-haul fleet to eight from nine by the end of the year and comes weeks after the airline said the number of passengers crossing the Atlantic in May fell 21% to

just 90,000 passengers. Aer Lingus won't need as many planes because it plans to slash 25% of its transatlantic route capacity for the winter, despite complaints from the Republic’s Transport Minister Noel Dempsey.

Flights from Shannon to Chicago will be suspended from September while services from Dublin to Washington and San Francisco will be suspended from October. Four weekly flights between |Shannon and New York are under |review.

It's all a long way from 2007 when Aer Lingus agreed to buy 12 long-haul Airbus planes in 2007 to expand the number of seats on transatlantic flights and the number of routes. Airbus A330-300s have 40 more economy class seats than the A330-200s they were due to replace.

The agreement to delay deliveries is “a very positive development,” Davy Stockbroker analyst Stephen Furlong said while warning that the airline still faces high costs and that trading is obviously very difficult. “This is one issue but its not the key issue,” he added.

Airlines everywhere are struggling to make money at present, due to falling passenger demand.

“Aer Lingus has an overhead it can no longer afford,” Bloxham Stockbrokers analyst Joe Gill said. “The changes also heighten the need to restructure costs across the business.”

Aer Lingus also reached agreement to reduce its long-haul fleet by cancelling existing lease agreements on two A330 aircraft.

One A330 will be handed back to Airbus in October.

COMMENT RULES: Comments that are judged to be defamatory, abusive or in bad taste are not acceptable and contributors who consistently fall below certain criteria will be permanently blacklisted. The moderator will not enter into debate with individual contributors and the moderator’s decision is final. It is Belfast Telegraph policy to close comments on court cases, tribunals and active legal investigations. We may also close comments on articles which are being targeted for abuse. Problems with commenting? customercare@belfasttelegraph.co.uk