Buoyant Aer Lingus expects full year profits
Irish legacy carrier Aer Lingus has revealed strong trading in September is likely to push third quarter profits above expectations.
Strong trading over the period has improved yields, with growth in line with the second quarter of 2010.
Forward revenues suggest October and November will also be ahead of expectations.
However, the same measure indicates December and the first quarter of 2011 appear much weaker than anticipated.
“This may be down to a recent trend towards later bookings or an underlying softness in demand,” Aer Lingus explained.
Despite this weaker outlook for December, Aer Lingus now expects to report a full year operating profit, before exceptional items, at the top end of market forecasts.
Market expectations for Aer Lingus’ full year operating profit range between €25 million and €29 million, with the consensus at €27 million.
Aer Lingus made a full year operating loss, pre exceptional items, of €81 million in 2009.
Profit expectations do not take into account potential industrial action at the airline.
Cabin crew have already begun working toward strike action, while pilots were balloted earlier this month on possible action.
Looking ahead to 2011, Aer Lingus shares the concern expressed recently by the International Air Transport Association (IATA) the durability of the current aviation sector upturn is in increasing doubt in both Europe and North America and that growth will slow in 2011.
For Aer Lingus, weakness in North America and Europe would be further compounded by the weakness of the Irish economy.
Completion of the Greenfield cost reduction programme, therefore, remains vital if 2010 profitability is to be sustained into 2011 and for the longer-term, the airline added.