Widespread cost cutting is on the agenda for Aer Lingus after its profits have plunged into the red against a backdrop of soaring fuel costs. The airline posted an operating loss of €22.3m (£17.93m) for the first half of this year, down from an operating profit of €2.6m a year earlier.Chief Executive Dermot Mannion blamed the slump on soaring fuel prices and warned that without making radical cost-cutting measures, losses would extend much deeper next year.
The Irish national carrier has already cut its capacity for this winter by 11%, so it is widely expected job will be the first casualty, as well as further reductions to its flight network.
An Aer Lingus spokesman said: “Things will not bounce back. We are heading for a pretty difficult challenge, and we need to take a surgical look at costs across the whole business.”
He also said that the carrier’s cost per passenger is roughly double that of arch rival Ryanair. The latter warned in June that its profits this year would be wiped out by high fuel costs.
Aer Lingus spent €253m on fuel in 2007, but this will rise to €390m in 2008. If it were to hedge all of next year’s fuel bill today, the cost would rise to €463m.
“We’re looking at a three-figure loss in 2009, potentially, if we don’t look at our costs,” the Aer Lingus spokesman added.