Aer Lingus issues interim management statement

Aer Lingus today issued an Interim Management Statement to cover the three months ended March 31 and also announced a reorganisation of it's senior management as part of it's approach to meet the challenges of a deteriorating market.

For the period Q1 2009 (01/01 to 31/03) revenue fell 16% YoY while passenger numbers fell 6.5% YoY. Revenue per passenger fell 9.6% YoY. The airline blamed a deepening recession in Ireland and a declining demand on it's US routes for the fall in revenue.

Comparing short haul and long haul the YoY Q1 numbers look like :

Short  Long

Passenger numbers -05.7% -12.5%

Capacity in available seat kms -04.5% -19.5%

Load Factor 70.1% 67.1%

Change in Load Factor +01.4% +03.2%

Average airfare -10.8% -18.9%

The famed Aer Lingus cash pile has taken a hammering in the period also, dropping 9.2% since December 31 2008 to €593.6m. A charge of €80m has been taken for restructuring costs and also for a final payment on an A330 aircraft. 

As a result of the worsening situation, the company is currently reviewing it's long and short haul fleet requirements and scheduling. A further update in relation to capacity and capital expenditure will be issued on June 5 2009.

In it's outlook for the remainder of 2009, Aer Lingus expects that the average fare trend for the year will be worse than previously forecast and as a result "it is currently expected that the loss for the 2009 full year will be materially below the bottom of the range of current market expectations."

In order to meet the challenges of the current market the airline has announced a number of management changes.

Niall Walsh, currently Deputy CEO will assume the role of Chief Operating Officer with responsibility for all of the Group's ground and flight operations, procurement and airport bases.

Sean Coyle, currently Chief financial Officer has been appointed as Head of the Group's short haul operations with additional responsibility for IT, e-commerce and ancillary revenue.

Stephen Kavanagh has been appointed as Head of the Group's long haul operations with added responsibility for cargo operations, strategic alliances and resource planning.

Commenting on  RTE Radio, Ryanair CEO Michael O'Leary poured scorn on the management restructuring program saying that it amounted to "rearranging the deckchairs on the Titanic."

In relation to Ryanair's 29.8% shareholding in Aer Lingus he said that he didn't anticipate a third Ryanair bid for Aer Lingus. "The next time the government will have to come ask us to rescue Aer Lingus."

Shares in Aer Lingus closed today, down 19% at €0.56.

Posted 090428