Aer Lingus evaluating 15 destinations for new North American routes

Irish airline recorded record operating profit of €305m in 2018

Aer Lingus has been investing in new Airbus A321LR aircraft that would enable it to travel longer ranges. Photograph: Frank Grealish

Aer Lingus has been investing in new Airbus A321LR aircraft that would enable it to travel longer ranges. Photograph: Frank Grealish

 

Aer Lingus is evaluating over 15 North American routes to which it could fly within the next five years as it invests in its fleet.

On a call with reporters, Aer Lingus’s new chief executive Sean Doyle said the airline has an “extensive evaluation process going on now” to look at opportunities for new aircraft it is waiting to be delivered.

“We’re evaluating north of 15 [routes] at the moment, and that will increase with the range capability of the technology that’s coming our way,” he said.

As to how many markets the carrier, owned by IAG, will enter depends on “how attractive a deal we can negotiate to enter those markets”, Mr Doyle added.

His comments came after revenue rose almost 9 per cent at Aer Lingus last year, and operating profit hit a record €305 million as it increased capacity and trimmed costs.

Total revenue for the airline was just over €2 billion last year, with passenger revenues up almost 9 per cent to €1.95 billion and cargo revenues increasing almost 15 per cent to €54 million. However, unit passenger revenues were lower, down 1.2 per cent.

Despite cutting costs in some areas of the airline such as procurement and handling, Aer Lingus was also hit by rising fuel bills and increased staff costs.

The addition of new routes to destinations such as Philadelphia and Seattle increased capacity by 10 per cent. Aer Lingus increased capacity on its North American routes by 17.2 per cent over the year.

Transatlantic hub

The carrier’s growth will focus on Dublin Airport’s development as a transatlantic hub, and Willie Walsh, chief executive of IAG, said “there’s a lot of scope to improve and significantly enhance the position of Dublin as a transatlantic hub”.

Asked about a third terminal at Dublin Airport, Mr Walsh noted that there was “still a lot of scope for the existing terminal building to be exploited before you need to look for additional capacity”.

Aer Lingus has been investing in new Airbus A321LR aircraft that would enable it to travel longer ranges. Mr Doyle said the company has also been evaluating Airbus’s planned XLR, which would allow routes on the west coast of America and the mid-west to be served out of Dublin on a narrowbody aircraft.

“If you look four or five years from now we’re looking at a much larger list of places that could be served by the narrowbody that we’ll evaluate,” Mr Doyle said.

Additionally, new aircraft deliveries will have a larger capacity to serve business class customers as Aer Lingus sees a “broad-based increase in demand” in that segment of the market.

And while the Irish arm of IAG is looking to Airbus for its aircraft requirements, British Airways is planning to order 18 Boeing aircraft.

Operating profit

On Thursday, IAG reported a 9.5 per cent rise in operating profit before exceptional items to €3.23 billion, ahead of analyst estimates.

The carrier, which also owns brands including Iberia and Level, recently said it was offloading its stake in budget carrier Norwegian.

Mr Walsh said the company has been approached by a number of airlines in the past year, most of which were in “significant distress”, but he does not expect the group to do any deals this year or in 2020.

“Our focus will be on organic growth because we see a lot of opportunities just in Aer Lingus, and clearly Aer Lingus is one of the more exciting opportunities within the group.”