Aer Lingus facing 'most difficult period'
Aer Lingus said today that trading conditions are "extremely challenging" at present and that the group is now facing the most difficult period in its 73-year history.
Speaking at the airline's agm in Dublin this afternoon, Aer Lingus chairman Colm Barrington said the economic environment deteriorated significantly during the first quarter of 2009 and that there were no near-term indications of improvement.
“Trading conditions in each of Aer Lingus’ key markets are exceptionally challenging. The Irish air travel market is being impacted by rapidly growing unemployment, rising tax rates and declining consumer confidence and demand. These conditions have been further compounded by the imposition of an air travel tax of €10 per departing passenger from Ireland," said Mr Barrington.
He added that demand for air travel in Ireland is considerably weaker than last year, while demand in Aer Lingus’ other key markets, the UK and US, is also weak.
In the first quarter of 2009 total passenger numbers for Aer Lingus fell by 6.5 per cent while total yields declined by 14.5 per cent per cent when compared to the same period last year.
"Yields in all of our markets have continued to decline and against that backdrop most carriers, including Aer Lingus, have focused on managing capacity to maximise load factors and reduce costs to reflect this difficult demand environment," said Mr Barrington.
“Over the past number of years, Aer Lingus has delivered significant incremental improvements in its cost base to meet the needs of an increasingly competitive and challenging environment. However, the Group is now facing the most difficult period in its 73-year history," he added.
Mr Barrington told shareholders the group must deliver efficiencies and enhance productivity. He said that the airline has taken steps to reduce winter capacity in Belfast and Dublin and had agreed the early termination of one transatlantic aircraft lease and was working with Airbus to reduce near term fleet commitments.
“The trading environment and outlook remain highly uncertain and it is not possible to accurately forecast demand and yield for the remainder of 2009 and beyond. As a consequence, Aer Lingus is not in a position to provide further guidance on the 2009 financial outcome," he said.