Aer Lingus operating profits rise by 40.7%

Updated: Wednesday, 06 Feb 2013 17:05

Aer Lingus said that its full year revenues for 2012 increased by 8.2% to €1.393 billion from €1.288 billion.

Operating profits before exceptional items jumped 40.7% to €69.1m from €49.1m.

But pre-tax profits for the year to the end of December fell by 51.9% to €40.6m from €84.4m.

Aer Lingus said this is because in 2011 the airline made "exceptional gains" after it surrendered the lease of its headquarters at Dublin Airport to the DAA.

In 2012 it recorded "exceptional costs" including restructuring its Shannon aircraft maintenance operations, and legal costs associated with the Ryanair takeover bid.

The airline said it carried a total of 10.8 million passengers during the year - the highest number flown in a single year by the group.

The figure included passengers on its regional operations and the Washingon-Dulles-Madrid codeshare with United Airlines. Its load factor rose by 2.1 points to 77.7%.

See how Aer Lingus shares are doing in Dublin.

The board is recommending an increased dividend of four cent per share, which follows a three cent per share dividend paid in 2011.

The company said that its Greenfield restructuring programme was completed during the year, which exceeded the annualised savings target by 7.4%.

''I firmly believe that this result, representing our third consecutive year of profitability, validates our value carrier business model and shows that our strategy is delivering a leaner, more efficient and profitable carrier, to the benefit of customers, shareholders and staff,'' commented the airline's chief executive Christoph Mueller.

He said that the airline will remain focused on creating demonstrable value for its shareholders in 2013.

''After the successful delivery of the Greenfield restructuring programme for 2012, resolving the complex pension legacy and further efficiency improvements across the organisation will drive the management agenda in 2013,'' he added.

Aer Lingus said its fuel costs represented 27% of total operating costs last year, up from the level of 23.3% in 2011. It blamed the increase on ''adverse movements' in price and currency factors.

The airline said that 2012 saw challenging macroeconomic conditions and weak underlying demand in some of the key markets in which it operates. However, it added that the airline is confident it will once again outperform the Ireland and UK market this year.

Speaking on RTÉ's Morning Ireland, the Aer Lingus chief executive said he believes Ryanair's latest bid for the company will be unsuccessful.

Mr Mueller also dismissed the announcement by FlyBe this morning that it would create FlyBe Ireland in the event of a takeover of Aer Lingus by Ryanair. He said the proposal was "not going to fly".

On the pensions deficit at the airline, Aer Lingus said it was ''disappointed'' that the attempts to find a solution to the problem facing it have not yet been successful. The deficit is estimated to be some €779m on the minimum standard basis.