Aer Lingus shares fall after profit warning

Aer Lingus shares fall after profit warning

Aer Lingus shares fell almost 6% on Friday following a profit warning.

The Irish airline blamed on a slump in short-haul business on “exceptionally good weather” during the summer and intense pricing competition from its rival Ryanair.

The carrier said it was reducing its forecast for 2013 operating profits to €60 million, down from €69.1 million, which it had forecast at the publication of its half-year results at the end of July.

The airline said: “The current booking profile for the rest of the year suggests that despite more aggressive pricing in response to market conditions, it will not be possible to recover lost volumes experienced in July and August as a result of the warm weather.”

Aer Lingus said it was “examining ways to accelerate existing plans to achieve further cost efficiencies in order to preserve competiveness and protect future profitability.

“However, measures such as employee exits under the current voluntary severance scheme have been slowed by delays in the resolution of funding issues in the Irish Airlines Superannuation Scheme.”

Chief executive Christoph Mueller said Ryanair had “opened the taps” on routes were it faced competition in Europe.

“We are less affected than other carriers in Europe but clearly the offering on some of the Ryanair routes [are] below their own cost level,” he told analysts in a conference call.

Comments

This is a community-moderated forum.
All post are the individual views of the respective commenter and are not the expressed views of Travel Weekly.
By posting your comments you agree to accept our Terms & Conditions.

More in News