Aer Lingus profit down 9.7%

by Dave on 11/11/09 at 1:03 am

Aer Lingus recently reported a further decrease of profit, which, according to officials, is proof of a “stabilising” performance after reducing aircrafts and capacity. The company announced last month its plans to cut one fifth of its workforce, coupled with eliminating another plane from its long-haul services during summer and winter of 2009.

In the third quarter of 2009, Aer Lingus’ profits fell 9.7%, while the number of passengers rose 7% and the load factor increasing on short and long routes. Fares dropped 17.6% in the three months to September 30. This decline had a positive outcome for the company, which noticed an 8.5% increase per passenger on extra fees, such as seat booking or extra luggage.

In an effort to reduce costs, Aer Lingus hired Christoph Mueller as their new CEO and implemented a series of cost-reducing measures to cut €97m off their anual cost. As a result, 676 members of the company’s staff are being let go and pension arrangements are set to be changed after talks with the Union.

“Cost increases in the form of higher fuel prices, airport and navigation charges together with further expected gross domestic declines and unemployment increases in our major markets, will mean that we must continue to reduce any costs within our control so that we can cope with continued falling fares, compete and maintain balance sheet strength. [...] actions taken to remove capacity on underperforming parts of the network has had a positive impact on stabilising load factors and yields while reducing operating costs” said Aer Lingus.

Aer Lingus is in a tight competition with Ryanair to gain passengers, both being affected by rising fuel costs. The first reported €93m losses for the first half of 2009, almost four time than last year.

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