Aer Lingus cut its losses in half during the first six months of 2022 compared with the same period last year as passenger numbers bounced back following the lifting of restrictions introduced during the Covid-19 crisis.
Interim results from the airline’s parent, International Airlines Group (IAG), for the six months ended June 30th, 2022, show the Irish carrier recorded a loss of €95 million, which was down from €192 million for the same period last year.
Passenger revenue soared from €33 million in the first half of 2021 to €610 million, while external revenue went from €65 million to €657 million, and segment revenue from €65 million to €666 million.
The report also showed that Aer Lingus entered into a financing arrangement with the Ireland Strategic Investment Fund (ISIF) for €200 million, repayable in March 2025. It remained undrawn as of June 30th.
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This facility is in addition to the existing €150 million financing arrangement already in place with ISIF.
IAG said its operating loss for the half year was €438 million, down from a loss of €2 billion last year. Its loss after tax and exceptional items for the half year was €654 million, down from more than €2 billion a year ago.
IAG chief executive Luis Gallego said: “In the second quarter we returned to profit for the first time since the start of the pandemic following a strong recovery in demand across all our airlines. This result supports our outlook for a full-year operating profit.
“Our performance reflected a significant increase in capacity, load factor and yield compared to the first quarter. Premium leisure remains strong while business travel continues a steady recovery in all airlines.
“Iberia and Vueling were the best-performing carriers within the group. The Spanish domestic market and routes to Latin America continued to lead the recovery with demand exceeding 2019 levels last month.
“Forward bookings show sustained strength and North Atlantic demand continues to grow following the lifting of the US Covid testing requirements in June.
“Although bookings into the fourth quarter are seasonally low at this time of year, we are seeing no signs of any weakness in demand.”
Historic challenges
Mr Gallego said the industry continued to face “historic challenges due to the unprecedented scaling up in operations, especially in the UK where the operational challenges of Heathrow airport have been acute”.
“Our airline teams remain focused on enhancing operational resilience and improving customer experience,” he said.
“In line with our net zero commitment by 2050, we have announced the addition of 50 new Boeing 737s and 59 Airbus A320 Neo family aircraft subject to shareholder approval. These modern, fuel-efficient planes will see us over 60 per cent through our short-haul fleet replacement by 2028.
“As we build back operational resilience, our strong portfolio of brands, ability to deliver efficiencies through our group scale, strong capital discipline and our leadership position in sustainability will generate long-term shareholder value.”
In terms of outlook, IAG expects pre-exceptional operating profit to be significantly improved for its third quarter, and to be positive for full year 2022.
Net cash flow from operating activities is expected to be “significantly positive” for the year.
This assumes no further setbacks related to Covid-19 and no government-imposed restrictions or material impacts from geopolitical developments. Net debt is expected to increase by year end compared with the end of 2021.
