Aer Lingus profit rises in 2010

Operating profit at Aer Lingus was €57.6 million last year but passenger numbers declined by 10 per cent and the company made provisions for a €32.5 million payment to the Revenue Commissioners.

The airline also warned that fuel prices could impact profitability in 2011, if the cost remained at current levels.

In a statement this morning, Aer Lingus said a changed business strategy delivered profit last year, compared with an €81 million loss in 2009, and ancillary revenues rising 5.5 per cent in the year to €17.67 per passenger.

The transatlantic business became profitable again, and average yields per passenger rose 12 per cent to €107.12, but revenue rose only marginally for the year at 0.8 per cent higher. The airline carried just over 9.3 million passengers for the year.

Costs were down 10 per cent. The company reported a pre-tax profit of €30.4 million for the year.

The exceptional charge of €32.5 million is the estimated cost of a settlement with the Revenue Commissioners announced last week arising from a redundancy scheme the airline offered to ground staff in 2009. It covers PAYE, PRSI, interest, penalties and related charges.

"Aer Lingus generated a positive operating result of €57.6 million in 2010. This result represents a swing in profitability of €138.6 million compared to 2009 and has been achieved despite adverse economic conditions in our core Irish market and significant operational challenges caused by volcanic ash and weather related disruptions in 2010," said chief executive Christoph Mueller.

"We expect significant challenges in 2011, with trading for the year likely to be impacted by fuel price inflation and increased airport charges in combination with difficult conditions in our home market. We do not expect that improvements in yield performance and ongoing cost savings can offset these increased costs. If current fuel prices persist, we expect that 2011 operating profit will be significantly below that of 2010."

Shares in the airline fell 2.6 per cent on the Dublin market to trade at 92 cent.