Sales fall 10pc at Aer Lingus as jobs axed
IRISH airline Aer Lingus reported a 10 per cent fall in revenues in a third quarter trading update that were described by analysts as “poor but not disastrous”.
Aer Lingus posted a 9.7 per cent year-on-year drop in revenue despite increasing passenger numbers by seven per cent over the summer to nearly 3.1m.
The Dublin-based carrier, now partly owned by Ryanair, was hit by a 12 per cent decline in short-haul fares and a 17 per cent fall in long-haul fares compared to a year earlier.
The numbers show the carrier still shows cause for concern, but were significantly better than consensus forecasts. Many pundits had expected a meatier double-digit sales fall.
Stephen Furlong, analyst at Davy Stockbrokers, said: “These results are poor but not disastrous. While it’s still in a perilous position, the rate of decline doesn’t seem to be accelerating.” Chief executive Christoph Mueller plans to push ahead with a cost-cutting programme revealed in October which will see Aer Lingus shave €97m in costs from the end of 2011. Around €74m will come from salary cuts and 800 redundancies. The firm has also upped its fuel hedging for 2010 to 53 per cent to guard against an increase in crude prices.
Industry insiders said clarity over the extent of job cuts following talks with unions and employees, expected to come to a close on 18 November, would be crucial.