Aer Lingus reports improved 2011 net earnings

Aer Lingus Group (EI) has reported a consolidated net income of €71.2 million ($95.6 million) for 2011, up 65.7% from a €43 million net profit in 2010, marking its second year of profitability. EI credited the results to moving away from the pure low-fare model and repositioning itself as a “value airline,” focusing on yield instead of load factors.

It said that both the group’s long- and short-haul networks continued to be profitable. In 2009, before it adapted the new strategy, long-haul was significantly loss-making and short-haul was just barely breakeven.

Operating profit before net exceptional items fell 6.5% to €49.1 million from a €52.5 million profit in 2010. Exceptional items comprised a €37.2 million credit in 2011.  

“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,” said CEO Christoph Mueller.

Revenue rose 6% to €1.29 billion and passenger revenue rose at the same rate to €1.23 billion, with increases in both short- and long-haul revenue. Passengers carried in EI mainline increased 1.8% to 9.51 million while the average fare per passenger rose 4.8% to €112.27 and retail revenue per passengers inched up 0.4% to €17.73.

RPKs rose 1.1% to 14.05 billion on a 1.8% increase in ASKs to 18.58 billion; load factor decreased by 0.5 points to 75.6%.

EI said it has received free allowances amounting to 80% of its 2012 requirement under the EU emissions trading system (EU ETS) and it has purchased the balance of its requirements for the year for €1.66 million.

Looking forward, EI said it expects key markets to remain very competitive this year and plans to keep capacity flat. “Our expectation for 2012 is that the group will remain significantly profitable albeit below 2011 levels. This will require Aer Lingus to drive increased passenger volumes and to also generate a higher average yield per seat across the network,” it said.

Article Source : ATW Daily News