Aer Lingus benefited from €56 million in Covid wage supports last year, the latest figures show. Accounts filed by its main operating company, Aer Lingus Ltd, show that Government travel restrictions left the airline with a €385 million loss before tax in 2021, against a €576 million deficit the previous year.
A tax credit left its total 2021 losses at €339 million, from €502 million in 2020, the year that Covid restrictions first grounded airlines.
The Oireachtas outlawed “non-essential” travel until July 19th last year, forcing the Irish carrier to shelve many of its routes, while the State’s late reopening wiped out half the tourist season.
The “significant reduction in operations” prompted Aer Lingus to use the Government’s Employee Wage Subsidy Scheme, which the accounts state saved the business €56 million last year.
Airline workers, rather than the company itself, received the cash in their wages under the scheme, which ran until April this year, shortly after the State lifted the last of the restrictions imposed following the arrival of Covid’s omicron strain late in 2021.
Aer Lingus borrowed €200 million from the State-controlled Ireland Strategic Investment Fund in March of this year. This followed the €150 million debt it raised from the same source in 2021. The company also borrowed €150 million from its parent, International Consolidated Airlines’ Group (IAG), through a revolving credit facility.
According to its accounts, Aer Lingus owed IAG €162 million at the end of 2021, against €63 million 12 months earlier.
Aer Lingus borrowed the money as restrictions on flying put its cash under pressure last year. Its accounts state that none of those debts was due for repayment within 12 months of December 31st.
Government reopened travel with the rest of the EU on July 19th last year, several weeks after all other member states. Restrictions remained on travel to the US and UK, key markets for Aer Lingus.
The airline raised this frequently with both Government and the Oireachtas. Chief executive Lynne Embleton, appointed in 2021, pointed out that at their height restrictions had cost Aer Lingus €1 million a day.
The company recently confirmed that its operations earned profits of €139 million in the three months to September 30th, a turnaround from the €95 million it lost during the same quarter in 2021. However, this year’s third-quarter profit still trailed the equivalent three months in 2019, the last year that the air travel industry now benchmarks as normal as it preceded Covid’s outbreak.
Commenting on those results, Ms Embleton said Aer Lingus welcomed the profits as it began repaying the significant debt it took on during Covid. She added that Aer Lingus expected to make a small profit this year on the back of the progress it made in the third quarter plus what was likely to happen over the remaining months of 2022.
However, she cautioned that the surplus “would be considerably below the full-year profitability seen in 2019″.
Delays and cancellations, caused by bottlenecks across air travel networks and Covid outbreaks among staff, marred the airline’s first restriction free summer, although it maintained that these hit just a small proportion of flights.
Aer Lingus restored 90 per cent of its pre-Covid capacity this year, reopening many European and transatlantic routes that it shelved during pandemic curbs. It also launched transatlantic services, including New York and Barbados, from Manchester in England a year ago. Ms Embleton said it was encouraged by demand for these flights.
The airline recently restarted its Dublin-Miami service. It plans flying to 19 transatlantic destinations from the Republic’s capital next year.