Covid-19 costs Aer Lingus €1bn in lost profits and cash burn, says chief executive

Lynn Embleton tells politicians closing Shannon Airport base was right decision

Aer Lingus chief executive Lynne Embleton has told the Oireachtas Committee on Transport and Communications that the airline will not be reversing its decision to close its Shannon Airport base. Video: Oireachtas TV

 

More than 15 months of Covid-19 losses and wiped out profits have cost Aer Lingus around €1 billion, its chief executive, Lynne Embleton, estimated on Tuesday.

Addressing the Oireachtas Committee on Transport and Communications, Ms Embleton pointed out that Aer Lingus continued to lose €1 million a day in the face of Government pandemic travel curbs.

However, she said that the “swing between generating cash and burning cash” over the last 15 to 16 months has been closer to €1 billion. “No company can sustain €1 billion of damage,” Ms Embleton added.

The Aer Lingus chief observed that extra restrictions placed on non-vaccinated travellers from Britain, and Government plans to continue with other curbs, had dampened optimism about plans to re-open travel on July 19th.

“It’s looking too little too late to really have a significant bounce that will get us onto the right path to restoring connectivity and jobs,” she said.

“We are going to have a damp squib of a summer,” Ms Embleton predicted, adding that this had obvious financial implications for the airline.

She dubbed Government demands that will require non-vaccinated children travelling from Britain and the US with vaccinated parents to self-isolate on arrival here as “anti-family”.

That rule will not apply to families arriving from EU countries following the reopening of travel in July and the introduction of the digital Covid certificate, Ms Embleton maintained.

She stressed to politicians that in the short term, Aer Lingus needed the Government to treat British and US travellers the same as those from the EU.

Adopting cheaper, rapid antigen tests for travel instead of the more expensive and slower PCR screening required by the State would remove another bar to travel, the airline chief said.

Shannon closure

Ms Embleton told members that Aer Lingus’s decision to close its Shannon Airport base was meant to foster its ability to restore flights.

“We will not be reversing that decision, it’s the right decision to get Aer Lingus flying, generating cash and generating jobs,” Ms Embleton stressed.

However, she added that closing the base did not mean withdrawing from Shannon. “We want to fly to the regions,” the airline chief added.

She also confirmed that the company was talking to the State-owned Ireland Strategic Investment Fund about a further loan.

Aer Lingus borrowed €150 million from the fund last year on commercial terms. Ms Embleton said the airline was seeking liquidity from wherever it could find it.

Along with the rest of its industry, Aer Lingus has asked Government to extend the Employee Wage Subsidy Scheme into next year.

The airline is also seeking airport charge rebate schemes and aid to stimulate weaker routes.

She and Aer Lingus chief corporate affairs officer, Donal Moriarty, criticised the State for apparently failing to provide up to date figures on infection rates to either the EU or US centres for disease control.

EU members and other countries share this information. Mr Moriarty noted that the US Centre for Disease Control appeared to have been updated in the last 24 hours, but its European counterpart had not.

This meant that the Republic was “greyed out” on the European Centre for Disease Control Covid traffic light map.

The EU traffic light system grades regions as red, orange or green according to infection rates, but shades from which there is not up-to-date information in grey.

Both Aer Lingus executives warned the failure to update the Republic’s Covid rates was “another deterrent to travel”.

It is understood that the recent cyber attack on the Health Service Executive’s system caused the problem.

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