Aer Lingus Sticks to 2013 Forecast on Trans-Atlantic Unit
Aer Lingus Group Plc (AERL) stuck to a forecast that full-year earnings will match the figure from 2012 as the Irish airline expands trans-Atlantic operations.
Operating profit excluding one-time gains or losses will be “broadly” in line with the 69.1 million euros ($91.7 million) posted last year, Dublin-based Aer Lingus said today in a statement. Second-quarter earnings on that basis declined 8.2 percent to 29.1 million euros, while sales increased 6.2 percent to 398.2 million euros.
Aer Lingus is looking to grab a bigger slice of the lucrative market for flights linking North America with Europe, adding San Francisco and Toronto as destinations next year. The carrier is also pursuing a contract-flying strategy aimed at handling short-haul routes for major European airlines that are keen to exit unprofitable services while retaining feeder traffic to their hubs.
“Our long-haul business has grown significantly ahead of capacity additions ex-the U.S., and that’s U.S. traffic not just to Ireland, but also into continental Europe,” Chief Commercial Officer Stephen Kavanagh said on a conference call with journalists today. “We’re having good success with using Dublin as a hub for trans-Atlantic operations.”
Aer Lingus fell as much as 0.2 percent to 1.66 euros as of 9:20 a.m. in Dublin, reversing a gain of as much as 3.2 percent earlier in the day. The stock has risen 50 percent this year valuing the company at 880.5 million euros.
The airline expanded long-haul capacity by 16 percent in the quarter and filled 95 percent of seating in June. Aer Lingus spent 2.1 million euros in the first quarter on training staff and adding aircraft to begin wet-lease operations in April for London-based Virgin Atlantic Airways Ltd.’s Little Red domestic service, Chief Financial Officer Andrew Macfarlane said on the call.
The first-half net loss widened to 23.5 million euros from 21.9 million euros a year earlier, Aer Lingus said. Sales climbed 5 percent to 657.9 million pounds.
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