Threatened strikes hit Aer Lingus profits

Threatened strikes hit Aer Lingus profits

First quarter operating losses of €48.5 million at Aer Lingus were €3 million worse than the same time last year as threatened strike action hit the carrier.

The result reflects the later timing of Easter in 2014 and the negative effect of threatened industrial action on bookings in March resulting in a €3 million drop in revenue, the Irish airline said this morning.

“This threatened action resulted in the cancellation of flights in advance of St. Patrick’s weekend as well as the forced re-booking and re-accommodation of a significant number of passengers,” Aer Lingus said.

The proposed action was withdrawn at a very late stage, but the Aer Lingus had already cancelled 29 flights and hired 16 additional aircraft as a contingency in order to protect its schedule.

Revenues for the three months were broadly flat at €259 million year-on-year.

Lower Easter related leisure traffic compensated by the positive impact of contract flying activities including a wet lease arrangements, including Virgin Atlantic for its Virgin Little Red UK domestic arm.

Chief executive Christoph Mueller said: “Our operating result is €3 million lower than last year primarily due to the adverse effect of threatened industrial action by the SIPTU trade union in advance of St. Patrick’s weekend in March 2014.

“This threatened action, which was withdrawn only at a very late stage, resulted in numerous forced flight cancellations and aircraft hire-ins. This had a directly negative impact on our Q1 2014 operating result.”

He added: “The need to maintain our differentiation and tightly manage our cost base is very clear to us.”

Details of a two-year €30 million cost saving programme, dubbed Core, is due to be announced to staff and unions later this month (May).

“The timely and effective execution of our recently announced Core programme is imperative if Aer Lingus is to continue to grow profitably for the medium term,” said Mueller.

“Our short haul operation remains an attractive and profitable business despite the continuation of intense price competition in European markets.

“Forward trends are positive, especially in long haul. We continue to expect that our operating result for 2014 will be broadly in line with 2013.”

Sourced from Travel Weekly

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