28 August 2008

Aer Lingus plunges into red

Aer Lingus made an operating loss of almost ã18 million (22.3 million euros) on the first half of the year.

The plunge from an operating profit of 2.6 million euros in the same period last year came with a warning that the Irish carrier would at best break even in the second six months of the year.

Soaring oil prices were blamed by chef executive Dermot Mannion, who said the airline had been operating in extremely difficult market conditions.

The airline, which operates 42 aircraft, saw its fuel bill rise by 56.5 million euros in the half year.

Revenue was up by 10.2% to 632.9 million euros and passenger carryings were also by up 10.5%.

But against a background of slowing economic growth, the carrier faces making more cost cuts which could include staffing and its flight network.

Mannion was quoted as saying that without making ââ¬Åâœfundamental cgangesââ¬~ to its cost base, Aer Lingus would make a larger loss next year.

ââ¬ÅâœEven with the reduction in fuel prices over the last few weeks, competitive pressure on fares and volumes will continue and we are best expected to break even in the second half, delivering a loss for the full year,ââ¬~ he said.

by Phil Davies 

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