Aer Lingus has reported an operating profit of €139m for the third quarter, managing a completed turnaround from the first six months of the year when the company made a €95m loss, although the Irish airline's profitability remains below 2019 levels.
Lynne Embleton, CEO of Aer Lingus, said the return to profit was welcome as Aer Lingus begins the process of repairing its sheet and repaying debt taken on during Covid-19.
"While there is much to build on, we are conscious that global and geopolitical forces causing higher oil prices, exchange rate fluctuation and rising interest rates continue to substantially increase the cost base of airlines," Embleton said.
"We believe that the progress we’ve made in Q3 and our view of the remainder of the year will bring Aer Lingus to a position of small profitability for the full year, which would be considerably below the full year profitability seen in 2019."
Aer Lingus operated at close to 90% of 2019 capacity over the summer months, during which the airline planned an "ambitious" schedule that "delivered a much-needed strong summer after a difficult two years," according to Embleton.
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The CEO said Aer Lingus had made progress during Q3 and believed the remainder of 2022 would see the company enter profitability for full-year, although at a considerably lower level than in 2019.
"As we look towards 2023, Aer Lingus is progressing with our North American expansion plans, growing the number of transatlantic routes from, and through our Dublin hub," Embleton said.
"We will operate 19 transatlantic routes in Summer 2023 with Miami having returned in this month (21 October) and Cleveland and Hartford, Connecticut added to the Aer Lingus transatlantic route network from next summer.
"We are also encouraged by the steady levels of customer demand for our new direct transatlantic routes out of our Manchester base which commenced just one year ago."
More than 30,000 Aer Lingus passengers were affected by IT problems that resulted in the cancellation of 51 flights last month, and 6,500 applications for compensation.
International Airlines Group (IAG), the parent company of Aer Lingus and British Airwyas, said demand had held since the summer, and that the group's capacity would increase to 87% of 2019 levels in Q4 from 81% in Q3.
IAG made an operating profit of €1.2bn in Q3, up from a loss of €452m during the same period of 2021, and operating profit for the first nine months stood at €770m, compared to a €2.5bn loss in the first three quarters of 2021.
Revenue during Q3 totaled €7.3bn, up 0.9% on Q3 2019, with passenger revenues a fifth higher than three years ago. The company expects to make an operating profit of €1.1bn for the year.
"While demand remains strong, we are conscious of the uncertainties in the economic outlook and the ongoing pressures on households," said Luis Gallego, CEO of IAG.
"Against this backdrop, we are focused on adapting our operations to meet demand, strengthening our balance sheet by re-building our profitability and cashflows and capitalising on our high level of liquidity.
"This will allow us to allocate capital while investing in a disciplined way in our service and our people, to build capacity and enable future growth," he said, adding that the airline's leading positions in key markets and flexibility would help the company return to pre-Covid levels of profit.
(Pic: Fennell Photography)
