Aer Lingus Blames Fuel Costs for Loss

By DOUGLAS HAMILTON

IRISH airline Aer Lingus yesterday reported an operating loss of euro22.3m (GBP17.8m) in the first half of this year, hit by a jump of almost 50per cent in its fuel costs and a slowdown in consumer spending, although business on its short-haul routes between Scotland and Ireland is holding up reasonably well.

“Scotland is on par with (other) UK routes”, said Anda Corneille, the airline’s director of corporate affairs.

Aer Lingus offers flights from Edinburgh and Glasgow to Dublin. Scottish passengers can use the airline’s Irish hub to check through US Customs and Immigrations before boarding flight to the United States. Aer Lingus said previously that it plans to increase the number of flights from Edinburgh in November.

Corneille said the former state-owned carrier’s shorthaul routes are generally performing well in the face of an economic downturn in Britain and a softer economy in the Republic of Ireland.

The company said it expects a loss of between euro22m and euro30m for the full year, which could widen in 2009.

Corneille said Aer Lingus will give details of new costcutting measures by the end of September.

A spokesman for the Services, Industrial, Professional and Technical Union acknowledged the “difficult trading conditions” the airline finds itself in, but added that the efforts of workers – who he said have contributed euro11m a year in savings – must also be taken into account in any further cost-cutting measures.

The first-half loss compared with a profit of euro2.6m in the same period last year.

High oil prices and a global economic downturn have eroded the profits of airlines ranging from large full-service carriers to budget operators, in what many people in the industry say is a crisis that could overshadow the fallout from the September 2001 attacks on the United States.

Aer Lingus said it would cut capacity on some long and short- haul flights.

Ryanair, which has a 29.4per cent stake in Aer Lingus, has warned it could make its first loss since 1989 this year and said it would cut fares to snatch business from struggling rivals in an attempt to become one of the few European carriers to grow this winter.

However, Corneille told The Herald that Aer Lingus has nothing to fear from Ryanair.

Originally published by Newsquest Media Group.

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