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Aer Lingus operating profits jump 18

Article By: ,  Financial Analyst
February 24, 2015 10:26 AM

Aer Lingus has reported an 18 per cent increase in operating profits rising to €72 million (£52.76 million).

The Irish airline has benefited from an uplift in interest on its long-distance routes. Despite the rise in operating profits, Aer Lingus made a loss of €180 million on a pre-tax basis. This was down to a one-off charge to allow the company to resolve pension funding issues. The carrier added that 11 million passengers had used its service on short and long haul flights over the course of the year.

Aer Lingus has been the subject of a takeover from British Airways owner International Airlines Group (IAG) but the move has faced increased scepticism from the Irish government which has not yet given its backing to the bid. Despite the Aer Lingus board recommending the €1.36 billion takeover, it has still to gain the approval of the government which holds a 25.1 per cent stake in the business.

Commenting on the latest trading figures, Colm Barrington, Aer Lingus chairman, said: "To enhance these excellent results and to accelerate Aer Lingus’ growth, it is the board’s strong belief that the company should now take the opportunity to combine with IAG.

"In this combination Aer Lingus will operate as a separate business while gaining access to IAG’s extensive network and benefiting from its scale."

IAG interest

IAG has been pursuing a takeover of Aer Lingus for a number of months with the company previously seeing bids rejected. The British Airways owner is looking to acquire the Irish carrier to gain a bigger influence at Heathrow Airport. Aer Lingus currently has 23 pairs of take-off and landing slots at the London airport, valued at around £30 million apiece. Only British Airways, Lufthansa and Virgin Atlantic boast more.

The takeover process is a complicated one as IAG will need to get the approval of not only the Aer Lingus board but also the Irish government and Ryanair, which also holds an interest in Aer Lingus.

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