Aer Lingus has set itself an ambitious new target of increasing operating profits by 26 per cent to 95 million for 2004.

Last year's short-haul deal with Airbus will deliver extra capacity this year, the airline's chief executive has said.

Extra seats on British and European routes would be the main driver of growth in 2004 along with low fares and strong trans-Atlantic business, said Mr Willie Walsh.

The company is set to report operating profits exceeding €75 million within a fortnight.

Speaking to The Irish Times, chief executive Mr Willie Walsh said 2004 would be a "challenging" year characterised by serious competition among carriers.

He said the airline would shortly confirm it had exceeded its 2003 target of €75 million in operating profits. He said there was no reason the airline could not go beyond this in 2004.

He explained that due to the Airbus deal the airline could use larger aircraft and could grow revenues without even adding extra flights.

He said the airline needed to generate strong cash revenue to meet its responsibilities under the Airbus deal, the value of which was never disclosed.

In a related development, he said the airline was also looking at making changes to its long-haul fleet, which currently consists of seven Airbus 330s.

He explained that four of them were leased and the leases expired over the next few years.

"When they expire we then have a chance to examine what we want to do. Whether we want to add new aircraft or not. It has to be said, it is a pretty good time to buy aircraft."

He also disclosed that since Christmas a further 165 people had left the company as part of a severance package.

He said the terms were broadly similar to what was offered in the wake of September 11th.

Speaking on the theme of leadership at the National College of Ireland in the IFSC, he said some staff were uncomfortable with the level of change and wished to exit.

"When somebody is not certain of their future, to lock them into the company is not fair," he told students gathered for talk.

After the meeting he said staff numbers were now at an historic low of about 4,000 and the majority worked on the core business of the airline, not in subsidiaries.

On the potential flotation of the airline, Mr Walsh said this was a matter for the Government as the shareholder. He said he had not been approached by any company about a potential buyout.

He said management was focused on growing the airline regardless of future ownership.

He pointed out that a Government decision had been made in 1999 to sell the airline but it was only the Government which could "trigger" the sale.

He said the the weak dollar and the strong euro were having little impact on the airline's profits and, if anything, it was probably slightly in the airline's favour.

Earlier, Mr Walsh told students the airline was now selling 60 per cent of all tickets on its website, www.aerlingus.com. He said this site was taking daily revenue of €1.5 million.