Aer Lingus posted a 12 per cent rise in operating profit for last year todaybut said adverse factors would mean an operating loss in 2001.
The impact of the economic slowdown in main markets, allied to the effect of foot-and-mouth disease and the uncertainty caused by industrial relations issues, will lead the airline to report an operating loss for this year, it said.
Aer Lingus, a member of the Oneworld global airline alliance, reported 2000 operating profit of euro 80 million, with net profit up 29 per cent to euro 72 million and group turnover 21 per cent higher at euro 1.4 billion.
The warning of losses this year - with one market estimate at about euro 35 million - was not unexpected given the airline's high-profile woes in 2001, combined with a slowdown in the global economy.
"We had a very strong performance in the first quarter, but the slowdown, especially in the high-tech sector, has hit us very hard," chief executive Mr John O'Donovan said today.
In the first six months passenger traffic was down 4 per cent and the load factor dropped three percentage points.
Mr O'Donovan said the company was carrying out a root-and-branch review of its operations.
"It's essential that we match capacity to market expectations. We are not in recession but we're looking at much slower global growth, and passenger traffic is linked to economic conditions. I think this is going to be a very tough year for the industry generally," he said.
Mr O'Donovan declined to say how long it might take to turn the airline around. "We have a service people like and are prepared to pay for [and] we'll be doing our damnedest to return to profitability as soon as possible," he said.