Higher costs dent Aer Lingus profit
Published 28/02/2012 | 09:42
Higher fuel prices and airport charges have seen Aer Lingus's profits drop by more than 2 million euro last year.
The carrier's operating profit was 49.1 million euro in 2011, down from 52.5 million euro . However, the part-owned State airline said the annual results were better than anticipated, primarily due to stronger yields.
Total revenue was up 6% compared with 2010, with passenger numbers up by 1.8% and total yield per passenger up by 4.8%. Aer Lingus chief executive Christoph Mueller said he was pleased with the annual report.
"This is the second consecutive year of good profitability under our new strategy and demonstrates the success of the changes we have made to our business over the past two years," he said.
"While the 2011 operating result was lower than that reported for 2010, it was nonetheless significantly ahead of our expectations at the start of 2011 and was achieved against a difficult backdrop of non-controllable fuel price inflation, increased airport charges and challenging demand conditions in our primary markets."
Mr Mueller said his focus in 2011 was to consolidate the turnaround achieved in 2010, adding: "This included refining our demand led network strategy, continuing to drive increased revenue per seat, while remaining competitive, and pushing the Greenfield cost reduction programme. I am pleased to report that we have achieved these objectives."
The Government is expected to sell its remaining 25% stake in the airline when conditions are more favourable and when it can ensure a good value-for-money return.
Mr Mueller said Aer Lingus share prices have risen by 60% in recent months to just under one euro, which he maintained the Government previously earmarked as the minimum threshold at which it would consider disposal. Shares at the former State carrier were 2.20 euro when first floated in 2006.
He said the sale of the Government's stake would have no effect on the airline.
"The Government is a very passive shareholder at this point in time, has always been, and we do hope the liquidity of the stock will increase once its 25% are placed in the market because our stock price has always suffered from the fact we have two large shareholders, Ryanair and the Government, and they do not trade."