5th Nov 2013 10:08
LONDON (Alliance News) - Irish airline Aer Lingus PLC Tuesday reported higher operating profits for the third quarter as revenues increased and it controlled a rise in costs, and in contrast with rival Ryanair Holdings PLC, left its guidance for the full-year unchanged.
The airline, which has been the target of blocked takeover attempts from Ryanair in the past but is now safe after Europe's largest low-cost carrier was ordered to sell down its Aer Lingus stake, said operating profit excluding exceptional items grew to EUR94.9 million in the three months to end-September, from EUR90.9 million a year earlier.
Revenues rose slightly to EUR466.3 million, from EUR460.8 million, while costs rose just slightly to EUR371.4 million, from EUR369.9 million.
"Aer Lingus continues to expect that full year 2013 operating profit will be around EUR60 million," it said in a statement.
Ryanair Monday cut its earnings guidance for the second time in as many months, as it warned that pressure on fares was continuing. It reported higher revenues and profits for the first half of its fiscal year, but said it now expects its full-year profit to be between EUR500 million and EUR520 million, down from previous guidance for between EUR570 million and EUR600 million. That guidance was set at the start of September, when the airline first warned of pressure on fares.
Aer Lingus is being bailed out by its long-haul operations, which Ryanair doesn't have. Aer Lingus' own short-haul operations saw fare revenues decline 5.8% in the quarter, which it blamed on competitive pricing on its routes and the good summer weather which it says kept travelers at home.
However, long-haul fare revenues rose 12.4% and it filled slightly more seats on those routes even though it added capacity on North American routes.
"We do not expect any improvement in the short haul environment for the rest of 2013 which remains characterised by heavily discounted fare offerings across Europe. The 2013 outlook on long haul remains positive with the exception of some weakness expected in November which was previously communicated," Chief Executive Christoph Mueller said in a statement.
In a separate statement, the airline said it flew 0.5% fewer passengers in October as a 2.2% decline in numbers on its more numerous short-haul routes, more than offset a 16.3% rise in its less numerous, but more profitable, long-haul routes. It flew a total of 957,000 passengers, compared with the 8.02 million that Ryanair flew.
Aer Lingus shares were up 4.3% at 1.37 pence in London Tuesday morning.
By Steve McGrath; [email protected]; @stevemcgrath1
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