Aer Lingus Group plc today announced its results for the three month (Q2) and six month (H1) periods ended 30 June 2014.
The airline reported H1 improvement of 40% despite the €10m effect of strike action and the adverse effect of operational disruptions and strong competition, particularly in certain short haul markets.
Overall passenger volumes increased by 1.0% to 4.615 million and the load factor was up by 0.6% even with capacity growth in the period of 5.3%. Total revenues were up 6.0% to €697.2m (2013: €657.9m) with fare revenue per seat increasing by 5.5% to €89.18m in H1 2014.
The first half of the year is seasonally loss making for Aer Lingus. However, the Group’s H1 2014 operating loss before net exceptional items of €9.9m represents a 39.6% improvement over the previous year. This first half operating result would have approached breakeven in the absence of strike action in the first six months of 2014.
Even with the strike action, Aer Lingus’ Q2 2014 operating profit of €38.7m was its best reported second quarter result for at least five years.
This represents a 32.9% improvement on the prior year (Q2 2013: €29.1m) driven by an 11.1% (or €36.5 m) increase in passenger fare revenue supported by robust short haul performance and successful deployment of additional transatlantic capacity.
Commenting on the results, Christoph Mueller, Aer Lingus’ CEO said: “We are delighted to announce that Aer Lingus’ successful business model has delivered a 40% improved operating result and a 26% increase in free cash flow in H1 2014 despite the negative effects of lost revenue caused by the cabin crew industrial action.
“We sold the 25.3% additional long haul capacity deployed in Q2 2014 with 29.2% more revenue passenger kilometres; 5.3% higher long haul yields and a 2.6 percentage point increase in long haul load factor. Aer Lingus’ transatlantic offering represents a real low cost long haul service and we continue to attract more and more passengers in the North Atlantic transfer market from both European and US locations, most of them through our online booking portal.
“Short haul was predominantly impacted by the cabin crew industrial action in the first half of 2014 and short haul passenger traffic on Aer Lingus mainline services was down 0.7% for the first half of 2014. Due to swift and efficient countermeasures by our revenue management team, we were able to partly recover our forward bookings in late summer. However, we are still carrying an estimated negative booking gap of €10m into the second half of 2014 with some limited potential for further recovery.”
Mueller added: “Based on recent trading trends we once again expect that full year 2014 operating profit (before net exceptional items) will at least in line with 2013 (i.e. €61.1m).”