Resurgent long-haul traffic and a heavy cost-cutting programme have helped Aer Lingus slash pre-tax losses in the first half of 2010. The Irish carrier also says it expects to break even by the end of the year.

Losses fell to €20.8 million from €81.7 million whilst the company recorded double-digit growth in the amount of money it made per passenger. Operating costs fell 14 percent to €557 million, with about half of the improvement due to lower fuel prices.

However revenues fell 3.1 percent to €538 million.

In the second quarter, the airline reported an operating profit of €18.8 million, compared to a loss of €18.2 million in the same quarter last year.

Aer Lingus has had a torrid two years due to the severe slump in the Irish economy and the country’s high unemployment rate - now 13.7 percent. The airline has also had to fight off several hostile take-over attempts by Ryanair.

Christoph Mueller, Aer Lingus’ chief executive, said the results were a big improvement in difficult circumstances and that the company was on the mend. He also pointed out that the results came during the period of the volcanic ash cloud disruption.

Mueller said: “For the 2010 full year, we expect to report an operating performance, before exceptional items, of no worse than break even.”

“This would represent a good performance in difficult market conditions but is predicated on the delivery of committed staff productivity savings and no further significant disruptions to operations from industrial action or airspace closures.”

Despite previous management comments that Aer Lingus’s future as an independent airline was in the balance, finance chief Andrew McFarlane said that the carrier sees “no reason why we shouldn’t have to remain independent.”

He said the airline will likely join one of the global airline alliances, but no decision has been taken on that.

“We think the business is improving,” he said. “We think we’ve got a very attractive place in the market.”