Aer Lingus Says Heat Trims Short-Haul Amid Trans-Atlantic PushKari Lundgren
Aer Lingus Group Plc, the Irish airline part-owned by Ryanair Holdings Plc, said full-year 2013 profit fell, as good weather persuaded holiday-makers to stay home during the peak summer period.
Operating profit before net exceptional items for the year ended Dec. 31 dropped to 61.1 million euros ($84 million) from 69.1 million euros a year earlier, the Dublin-based carrier said in a statement today. Operating profit this year is expected to be “broadly in line” with 2013, the airline said.
“This guidance is significantly below our forecasts and also below consensus forecast and will likely not be taken well by the market,” David Holohan, an analyst at Merrion Capital, who has a buy rating on the stock, said in a note.
The company dropped 1.8 percent to 1.58 euros as of 8:49 a.m. in Dublin trading, valuing the company at 837 million euros. Aer Lingus said today a dispute with workers over pensions may lead to “potential operational disruption” even as the company targets a bigger slice of the trans-Atlantic market. Chief Executive Officer Christoph Mueller is boosting frequencies to Boston and adding San Francisco and Toronto to the company’s North American destinations.
“The demand environment is relatively robust and we are seeing some more discipline pricing in the marketplace,” Chief Commercial Officer Stephen Kavanagh said on a conference call with reporters. “This is the first time we’re putting a lot of new destinations into the market and the market is responding well.”
The airline expanded long-haul capacity by 11.6 percent last year with the average load factor, a measure of occupancy, across the business rising to 78 percent. Revenue from long-haul passengers increased by 11 percent.
Aer Lingus proposed a dividend of four cents a share for 2013, in line with a year earlier, and said it aims to maintain a payout at that level “for the foreseeable future.”