Aer Lingus likely to add two transatlantic services next year

Profits Airline’s parent IAG rises 28% in first six months but group cuts growth

The group said second quarter operating profit before exceptional items totalled €555 million, up from €530 million a year earlier. Aer Lingus contributed €68million towards the profit.

The group said second quarter operating profit before exceptional items totalled €555 million, up from €530 million a year earlier. Aer Lingus contributed €68million towards the profit.

 

Barry O’Halloran and CHARLIE TAYLOR

Aer Lingus could launch two further transatlantic flights next year, its parent group International Airlines’ Group (IAG) indicated in Friday.

The Irish airline earned a profit of €42 million on sales of €787 million in the six months to June 30th, figures released by the group show.

Speaking after IAG announced its results, chief executive Willie Walsh indicated that the Irish carrier could add new routes to the US next year. However, he did not say that what those routes are likely to be. “We will leave that up to Aer Lingus,” he said.

Sources have speculated that the airline is weighing a Dublin-Miami service. Industry data published earlier this year indicates that there could be strong demand for this service. The carrier did not rule this option in or out. A spokesman sad that it would consider any new opportunities as appropriate.

Aer Lingus is launching three new transatlantic services this year, from Dublin to Los Angeles, to Newark in New Jersey and to Hartford in Connecticut.

It is likely to announce any new services for 2017 at some point in the autumn. News of the likely expansion of the Aer Lingus network came as its parent said it was cutting back on planned capacity growth in light of varous factors, including continued problems with air traffic control strikes in France.

IAG, whic also owns British Airways, Iberia and Vueling, cut its 2016 profit outlook despite reporting a 28 per cent rise in operating profit for the first six months of the year.

The group said it expected full-year profits to rise by a “low double digit” per cent, having previously said in February that profits would be more than €900 million.

IAG said first half operating profit rose to €710 million from €555 million. Excluding Aer Lingus’s contribution, operating profit totalled €668 million.

The group said second quarter operating profit before exceptional items totalled €555 million, up from €530 million a year earlier. Aer Lingus contributed €68million towards the profit.

A weak pound contributed to a foreign exchange cost of €148 million. IAG reports reports in euro but earns the bulk of its revenue in sterling. It is also affected by dollar prices for fuel.

“Numerous external factors affected our airlines including the impact of terrorism, uncertainty around the UK’s EU referendum and Spain’s political situation and increased weakness in Latin American economies,” Mr Walsh said in a statement.

“This led to a softer than expected trading environment, especially in June.”

Non-fuel unit costs fell 1.1 per cent during the second quarter but were up 0.8 per cent at constant currency rates.

The company said it had had to cancel more than 1,000 flights in recent months due to adverse weather conditions and air traffic control strike action in France. The group said it expected to book at least €80 million in disruption costs as a result of this.

“We have reduced our planned capacity growth for the second half of the year, and have 2017 capacity growth and capex under review,” he added.

IAG said it already has 74 per cent of expected revenue booked for the third quarter. Based on current fuel price and currency levels it said it expected “low double digit percentage growth in pre-exceptional operating profit” in 2016.

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