Aer Lingus's ability to highlight another year of profit, return to the front foot on growth, and increase its dividend for shareholders could hardly be more timely.
The Irish airline has been operating against the backdrop of a third acquisition attempt by its feisty rival, its biggest single shareholder.
Ryanair's latest takeover bid remains at the mercy of European regulators. More details of its plan to help launch an Irish Flybe operation, as part of what it calls "unprecedented" remedies to tackle competition concerns, have emerged. But all moves hinge on the result next month of the European Commission's probe into the deal.
Should European regulators put the Ryanair bid back in play, all eyes then turn back to the Aer Lingus business itself and where its shareholders - competition issues aside - see its future.
When Ryanair's first bid for Aer Lingus raised the ire of competition regulators, it had struggled to secure the 50% acceptance from Aer Lingus shareholders it needed to complete the deal. The shareholder position - aside from the Irish government, which has said it will not sell its 25% stake to Ryanair - has not since been tested.
Ryanair, which holds nearly 30% of Aer Lingus, says it can still secure control even without the government stake.
Much of the jockeying from Ryanair and Aer Lingus has been based on sustainability of the latter's business model. Ryanair has consistently argued that the deal is the only way to secure Aer Lingus as an Irish carrier focused on Ireland.
Aer Lingus has turned round heavy losses incurred in 2008 and 2009, while keeping Ryanair at bay. Small wonder, then, that it was keen to highlight progress in unveiling its latest profits, even if restructuring costs dented its performance at a pre-tax and net level.
Last year was "stellar" for Aer Lingus, said chief executive Christoph Mueller, speaking during a full-year results conference call. "Not only have we improved our profitability to almost €70 million ($95 million), our operating cash flow has reached 5.4% of our turnover.
"The margin compares very well to the overall competitive landscape in Europe. Our balance sheet is improving and our cash is up. We have gained market share in both long-haul and short-haul. Our business model works, even in the strong recession we experienced in the Irish market."
Mueller took the helm at Aer Lingus in mid-2009, when the carrier was battling for survival. He swiftly aborted some of the carrier's strategic measures - such as its dalliance with a base at London Gatwick - and embarked on its "Greenfield" cost-cutting programme. Three years on, the carrier says that programme has delivered annual savings of more than €100 million, exceeding its €97 million target.
This year's profit of €69 million is its third consecutive positive result, and its highest since 2007. At its heart is a strong improvement in turnover. "We had a strong revenue performance in 2012 which was more than able to compensate for higher fuel and airport costs," explains Andrew Macfarlane, Aer Lingus chief financial officer.
Source: Flightglobal Pro and company reports; operating profits are before exceptional items
Revenues grew to 8% to €1.3 billion in 2012, despite only a fractional rise in capacity. "Revenue growth was delivered through volume and price and that points to the sustainability of the business model," says the carrier's commercial officer Stephen Kavanagh.
"Short-haul continued with the strategy of being demand-led. We have continued to fine-tune our network. We have continued to invest in frequency and schedule quality."
The carrier's short-haul revenues grew 4% to €816 million. "The strategy of carefully managing our capacity deployment and focusing on yield per seat continues to deliver positive results on short-haul," says Kavanagh.
Long haul in 2012 was "particularly strong", he adds, as various strategic elements began "to work very well in a co-ordinated way". Revenues were up a fifth to €343 million. "We had a small increase in [capacity], the number of passengers increased significantly, and a combination of volume and price delivered an exceptional 17% increase in yield per seat, Kavanagh says. "It was a very successful year and a template for future growth."
He points to the contribution of both its North American partners, JetBlue Airways and United Airlines, as well as it regional operation through its partnership with Aer Arann. "Each Aer Arann flight arriving to Dublin is carrying more and more travellers [connecting] to the USA," says Mueller. "Aer Lingus Regional will continue growing and provide the necessary feed for our increased transatlantic capacity."
On the long-haul front the carrier is returning to growth, boosting capacity 15% this summer through the addition of frequencies on its Boston and Chicago routes. "After three years of cautious capacity development we are returning to growth mode," says Mueller. "The overall capacity increase on the North Atlantic is a huge opportunity."
Growth in passengers connecting to Aer Lingus flights from Europe and the USA has helped counter the challenges faced in its Irish home market given the country's tough economic challenges. The carrier also continues to look to take advantage of other opportunities to expand, including its ACMI deal with Virgin Atlantic to operate domestic flights out of London Heathrow.
"We are open to other commercial agreements," says Mueller. "In this case we have combined our cost efficiency with our experience operation in Heathrow.
"We will operate an A330 over three consecutive winters from 2013 from a base in Scandinavia [for an undisclosed tour operator] to destinations to Caribbean destinations. This will contribute to our bottom line."
One of the remaining hurdles is the unresolved issues relating to pension deficits, which the carrier estimated at €779 million by the end of December.
"We are disappointed that the attempts to find a solution to the pension problem facing us have not yet been successful," Mueller says. "We strongly believe that the current funding position of the [pension scheme] is unsustainable and that it must be addressed now."
The carrier's proposals continue to be discussed in Ireland's Labour Relations Court.
"We are faced with some headwinds moving into 2013, not least from in non-controllable costs, particularly airport charges, but also from continuing weakness in our primary markets," Mueller says. But he adds: "We are very upbeat about 2013. The booking profile we see right now going forward should enable us to continue the stellar performance of 2012."