ALEXANDER CAMPBELL / LONDON
Irish carrier plunges into deficit for full year, but outlook is sunnier as Spanish airline stages fist-half recovery
Aer Lingus has suffered a €140 million ($138 million) net loss for 2001, down from a €72 million profit in 2000, on turnover down 2% to €1.35 billion. The poor results come as fellow European carrier Iberia has made a dramatic turnaround, achieving a €71 million net profit for the first half of 2002 after a €10 million loss in the first quarter of the year.
Aer Lingus's losses included a €104 million one-off charge related to 2,000 redundancies imposed after 11September, but were worsened by an inability to control recurring costs. Maintenance costs rose 13%, payroll climbed 14% and fuel costs were up 27% - despite capacity rising only 6.5%.
But chief executive Willie Walsh says the airline has "made good progress" and that its survival plan, which includes the return of leased aircraft, sales of aircraft and early retirement programmes, as well as redundancies, has enabled the airline to keep going through the crisis. Walsh says it will now have to keep costs low as traffic recovers. Simpler price structures, faster turnaround times, higher load factors and a further €130 million in cost reductions are planned. The airline is adding three new routes for the winter season - Geneva, Prague and Vienna.
Iberia's €71 million net profit for the first half of the year, compared with only c6 million in the first half of 2001, was due to a strong second quarter. The airline has not escaped the crisis, however, with traffic down 6% to 10.8 billion revenue passenger kilometres, but Iberia has managed to cut capacity enough to keep its load factor and yield high at the same time as cutting costs - including 2,500 jobs. Load factor was slightly up at 72.2% and yield rose 3%to 3.4¢.
The airline has also closed the sale of regional subsidiary Binter Canarias to a Canary-based investor group for €53 million. Binter operates 11 ATR72s from La Palma and Tenerife Norte on the Canary Islands. The deal includes an undertaking not to launch services to Spain before 2007.
Source: Flight International
