AER LINGUS’S executive chairman Colm Barrington said yesterday that there was no chance of the airline going out of business within the next 18 months, in spite of what he said were recent claims to that effect by Ryanair chief executive Michael O’Leary.
“Michael O’Leary speaks a lot of rubbish,” Mr Barrington said. “Most of Michael O’Leary’s rubbish is self-centred and is to make some point on his own behalf. I deny entirely what he said about Aer Lingus going bust in 18 months.”
Mr Barrington, who was speaking on RTÉ Radio 1's This Weekprogramme, also claimed that Ryanair would record a loss this year.
In response, Mr O'Leary told The Irish Times: "I didn't say they would go bust. I said they could run out of cash, which is something entirely different. He also said Ryanair will lose money this year . . . no we won't. We've already guided that . Most of the numbers he parrots out are generally wrong."
Earlier this year, Aer Lingus said its net cash balances could be as low as €400 million by the year end. They stood at €803 million at the end of June 2008.
Mr O’Leary has stated that if the current rate of cash burn continues Aer Lingus could run out of cash by the end of 2010.
Mr Barrington said that Aer Lingus has €1.2 billion “in the bank”, while its net cash – after its debt has been deducted – is “about” €600 million.
Mr Barrington said Aer Lingus’s passenger traffic declined by 6.5 per cent in the first three months of this year while its yield – average fares – was down “nearly 15 per cent because we have to discount [fares] significantly to keep the [passenger] numbers up”.
Mr Barrington said Aer Lingus had reduced its capacity by 9 per cent so far this year. “We are going to be reducing our fleet in line with the market conditions that we find ourselves in right now,” he said.
