Aer Lingus expects to return a small profit this year as its third-quarter results show it moved back into the green after a challenging first six months of 2022.
The airline said its performance reflected “a welcome strength” in leisure demand in the quarter following the ending of the “highly restricted” travel environment in Ireland, which led to significant losses in 2020 and 2021.
The company’s third-quarter results showed an operating profit of €139 million, which was described as “encouraging progress” after a loss of €95 million in the first six months of the year.
However, the profit figure was below the equivalent quarter in 2019.
“We anticipated the return of demand for leisure travel once Covid restrictions were removed and planned an ambitious summer schedule which delivered a much-needed strong summer after a difficult two years,” said chief executive Lynne Embleton.
“There was a strong resumption in outbound and inbound leisure travel this summer as we operated almost 90 per cent of our 2019 levels of capacity.
“We are now entering the winter season — a period where non-leisure bookings made closer to the day of travel are more important.”
She said the third-quarter profitability was “welcome” as Aer Lingus begins the process of both repairing the balance sheet and repaying the significant debt that has been taken on.
“While there is much to build on, we are conscious that global and geopolitical forces causing higher oil prices, exchange rate fluctuation and rising interest rates continue to substantially increase the cost base of airlines,” she said.
“We believe that the progress we’ve made in the third quarter and our view of the remainder of the year will bring Aer Lingus to a position of small profitability for the full year, which would be considerably below the full-year profitability seen in 2019.”
Looking ahead to 2023, she said Aer Lingus was progressing with its North American expansion plans, growing the number of transatlantic routes from, and through its Dublin hub.
It will operate 19 transatlantic routes next summer with Miami having returned in this month and Cleveland and Hartford, Connecticut, added to the Aer Lingus transatlantic route network from next summer.
“We are also encouraged by the steady levels of customer demand for our new direct transatlantic routes out of our Manchester base which commenced just one year ago,” Ms Embleton added.
The airline’s parent, International Consolidated Airlines Group (IAG), also presented results for the nine months to September 30th.
The group’s operating profit for the period was €770 million, an improvement of €3.2 billion compared with 2021. Excluding exceptional items, the operating profit for the period improved €3.4 billion compared with the previous year, to €739 million.
IAG chief executive Luis Gallego said: “We achieved another strong performance in the third quarter, with an operating profit of €1.2 billion and liquidity of over €13 billion.
“All our airlines were significantly profitable and we are continuing to see strong passenger demand, while capacity and load factors recover. Leisure demand is particularly healthy and leisure revenue has recovered to pre-pandemic levels. Business travel continues to recover steadily.”
