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UPDATE 2-Aer Lingus full-year operating loss quadruples
Tue, 9th Mar 2010 09:10
By Padraic Halpin
DUBLIN, March 9 (Reuters) - Operating losses at Aer Lingus quadrupled in 2009 according to an unaudited trading update issued after the Irish airline postponed publishing full results in a standoff with staff over cost-cutting measures.
The company's board will meet later on Tuesday to adjust provisions for cost-cutting measures after cabin crew opposed a plan to reduce its annual operating costs by 97 million euros ($133 million) by shedding up to a fifth of staff.
The proposed plan to stop it burning through its cash reserves had been accepted by unions representing pilots, middle management, maintenance staff and by some ground staff and cabin crew.
Aer Lingus, which has fended off two hostile bids by Irish rival Ryanair, is reeling from aviation's worst year on record and saw its operating loss rise to 81 million euros from 20 million euros in 2008.
Three analysts surveyed by Thomson Reuters I/B/E/S had expected an operating loss of 86.8 million euros.
Total revenue at the airline declined 11 percent to 1.2 billion euros as ancillary revenues -- fees charged for services such as checking bags -- helped cushion reduced passenger fares and cargo revenues.
Total passengers for the year rose 3.8 percent to 10.4 million -- less than a sixth of the number carried by Ryanair -- as the former flag carrier charged passengers less to fly resulting in a 13 percent fall in fare revenue.
Aer Lingus' shares -- of which Ryanair, the government and employees control 70 percent between them -- rose 5 percent to 0.63 euros, trading at less than half the 1.4 euros Ryanair offered in late 2008.
'The numbers they gave weren't too bad -- or were less worse -- but you still have further details to come down the line and it's being very lightly traded. It's a little bit off the radar for a lot of people,' one Dublin-based trader said.
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Graphic on the relative share performance of Aer Lingus and Ryanair http://graphics.thomsonreuters.com/310/IR_AER0310.gif
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Aer Lingus said on Monday that it was determined to realise its planned cuts regardless of the opposition and previously warned that it would push ahead with an alternative streamlining plan by imposing more redundancies, some on a compulsory basis.
'It's imperative that they get the cost deal through. The market is losing patience because the revenue line remains difficult,' Stephen Furlong, analyst at Davy Stockbrokers said.
Airlines have seen demand
drop faster than capacity could be trimmed over the last year and workers across the industry have lost patience with cost-cutting programmes.
Deutsche Lufthansa and British Airways have been two of the biggest European carriers hit by strikes this year.
In another fresh risk to Ireland's traditionally peaceful industrial relations, public sector unions said on Monday they would begin strikes in an escalation of their campaign against the government's fiscal reforms. ($1=.7307 Euro) Keywords: AERLINGUS/
(Editing by Louise Heavens; padraic.halpin@reuters.com; Reuters Messaging: padraic.halpin.reuters.com@reuters.net; +353 1 500 1504)
COPYRIGHT
Copyright Thomson Reuters 2010. All rights reserved.
The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
DUBLIN, March 9 (Reuters) - Operating losses at Aer Lingus quadrupled in 2009 according to an unaudited trading update issued after the Irish airline postponed publishing full results in a standoff with staff over cost-cutting measures.
The company's board will meet later on Tuesday to adjust provisions for cost-cutting measures after cabin crew opposed a plan to reduce its annual operating costs by 97 million euros ($133 million) by shedding up to a fifth of staff.
The proposed plan to stop it burning through its cash reserves had been accepted by unions representing pilots, middle management, maintenance staff and by some ground staff and cabin crew.
Aer Lingus, which has fended off two hostile bids by Irish rival Ryanair, is reeling from aviation's worst year on record and saw its operating loss rise to 81 million euros from 20 million euros in 2008.
Three analysts surveyed by Thomson Reuters I/B/E/S had expected an operating loss of 86.8 million euros.
Total revenue at the airline declined 11 percent to 1.2 billion euros as ancillary revenues -- fees charged for services such as checking bags -- helped cushion reduced passenger fares and cargo revenues.
Total passengers for the year rose 3.8 percent to 10.4 million -- less than a sixth of the number carried by Ryanair -- as the former flag carrier charged passengers less to fly resulting in a 13 percent fall in fare revenue.
Aer Lingus' shares -- of which Ryanair, the government and employees control 70 percent between them -- rose 5 percent to 0.63 euros, trading at less than half the 1.4 euros Ryanair offered in late 2008.
'The numbers they gave weren't too bad -- or were less worse -- but you still have further details to come down the line and it's being very lightly traded. It's a little bit off the radar for a lot of people,' one Dublin-based trader said.
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Graphic on the relative share performance of Aer Lingus and Ryanair http://graphics.thomsonreuters.com/310/IR_AER0310.gif
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Aer Lingus said on Monday that it was determined to realise its planned cuts regardless of the opposition and previously warned that it would push ahead with an alternative streamlining plan by imposing more redundancies, some on a compulsory basis.
'It's imperative that they get the cost deal through. The market is losing patience because the revenue line remains difficult,' Stephen Furlong, analyst at Davy Stockbrokers said.
Airlines have seen demand
Deutsche Lufthansa and British Airways have been two of the biggest European carriers hit by strikes this year.
In another fresh risk to Ireland's traditionally peaceful industrial relations, public sector unions said on Monday they would begin strikes in an escalation of their campaign against the government's fiscal reforms. ($1=.7307 Euro) Keywords: AERLINGUS/
(Editing by Louise Heavens; padraic.halpin@reuters.com; Reuters Messaging: padraic.halpin.reuters.com@reuters.net; +353 1 500 1504)
COPYRIGHT
Copyright Thomson Reuters 2010. All rights reserved.
The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
