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On the up

How did industrial action affect Aer Lingus' revenue?

The airline said that even though the first half of the year is traditionally loss-making, this year they saw an improvement.

AER LINGUS SAW a small increase in passenger volumes in the first half of this year – and a boost in revenues, despite industrial action.

Its latest results for the three month (Q2) and six month (H1) periods – ending 30 June 2014.

Aer Lingus CEO Christoph Mueller said that based on recent trading trends “we once again expect that full year 2014 operating profit (before net exceptional items) will at least in line with 2013 (i.e. €61.1 million).”

Strong performance in 2014

The airline delivered a “strong performance” for the first six months of 2014, and said this was “despite the adverse effect of operational disruptions and strong competition, particularly in certain short haul markets”.

  • Overall passenger volumes increased by 1.0% to 4.615 million
  • The load factor was up by 0.6% even with capacity growth in the period of 5.3%
  • Total revenues were up 6.0% to €697.2 million (2013: €657.9 million)
  • Fare revenue per seat increased by 5.5% to €89.18 in H1 2014.

Although the first half of the year is seasonally loss making for Aer Lingus, so far this year its operating loss before net exceptional items of €9.9 million represents a 39.6% improvement over 2013.

This first half operating result would have approached breakeven in the absence of strike action in the first six months of 2014.

Even with the strike action, Aer Lingus’ Q2 2014 operating profit of €38.7 million was its best reported second quarter result for at least five years.

This represents a 32.9% improvement on the prior year (Q2 2013: €29.1 million) driven by an 11.1% (or €36.5 million) increase in passenger fare revenue.

Commenting on the results, Christoph Mueller, Aer Lingus’ CEO said:

We are delighted to announce that Aer Lingus’ successful business model has delivered a 40% improved operating result and a 26% increase in free cash flow in H1 2014 despite the negative effects of lost revenue caused by the cabin crew industrial action.

He said that short haul was predominantly impacted by the cabin crew industrial action in the first half of 2014 and short haul passenger traffic on Aer Lingus mainline services was down 0.7% for the first half of 2014.

“Due to swift and efficient countermeasures by our revenue management team, we were able to partly recover our forward bookings in late summer,” said Mueller. “However, we are still carrying an estimated negative booking gap of €10 million into the second half of 2014 with some limited potential for further recovery.”

Aer Lingus Regional franchise services, operated by Stobart Air, carried 26% more Aer Lingus passengers in the first half of 2014 than the same period in 2013.

Read: Mueller calls time on Aer Lingus career>

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