Aer Lingus post loss for '08, issue profit warning

Aer Lingus has recorded a pre tax loss of almost €120m for 2008 compared a pre tax profit of almost €125m a year earlier. Taking out the one off restructuring costs incurred during the year, pre tax profits fell by 84%to just over €21m. 

For fiscal 2008, revenue grew by 5.6% to €1,357m. Passenger numbers grew by 7.5% to just over 10 million which gave a load factor of 72.8% down from 75.4% a year earlier. Short haul capacity grew by 13.6% while long haul capacity grew by 13%.

For the year ahead the airline said that it would not meet previous guidance on profit due to lower fares, softer cargo loads and the worsening Irish economy.

Following the release of the results, Shares in the airline fell by as much as 39 percent, the single biggest daily slump in value since the IPO in September 2006. At their lowest point, shares in airline were trading at 48 cents. So far this year the airline's value has fallen by 60%, cutting it's market valuation to just €320m.

As a result of today's profit warning, Ryanair, the largest investor in Aer Lingus has indicated that it intends to lodge a formal complaint with the Dublin and London stock exchanges, the Takeover Panel and the Financial Regulator about 'misleading' advice given by Aer Lingus in relation to profit forecasts.

"Today’s results from Aer Lingus prove conclusively that the chairman Colm Barrington, board and management of Aer Lingus misled shareholders and the Stock Exchange in their Defence Document of just 10 weeks ago. Shareholders are entitled to ask why there is no mention in today’s results about restoring or improving shareholder value," said Ryanair chief executive Michael O'Leary.

"It would appear that the board and management of Aer Lingus care more about lining their own pockets with excessive and unjustified director fees and multi-million euro resignation bonuses for failed management than they do about growing Aer Lingus, delivering profitability or shareholder value, " he added.