Aer Lingus plans to cut 100 jobs through voluntary redundancies it announced today in an interim management statement. The airline said the performance for the first three months of the year highlighted the need to continue to review its cost base to protect profitability for the rest of 2013 and beyond. It had a strong performance on the long haul network.

On short haul, a 0.9% increase in average fares offset the 0.5% decline in passengers for a 0.4% increase in revenue. In contrast, long haul revenue was up over 14% as fares increased by 5.6% in addition to the 8.4% rise in passengers.

Revenue for the first three months of 2013 rose by 3.3% €259.7m while leisure passenger numbers were boosted by the timing of Easter, with the Easter bank holiday weekend falling into March 2013 compared to the start of April in 2012.

The airline said it had an operating loss before exceptional items of €45.5m for the three month period, down from a loss of €36.1m the same time last year. It normally incurs a loss in the low-season first quarter.

Total passenger numbers rose 2.2%  and the overall yield per passenger increased by 3.7%.

Stephen Furlong of Davy commented - - "DAVY VIEW: Q1 2013 operating loss, before exceptional items, of €45.5m is €9.4m higher than the prior year largely due to Virgin wet-lease start-up costs, planned changes to the long-haul fleet and slightly weaker trading on UK routes. Outlook is for 2013 operating profit, before exceptional items, to be broadly in line with last year – €69.1m (Davy: €80.3m). We are likely to adjust forecasts downwards accordingly. An analyst call will take place at 0830 GMT (Dublin: +353 1 4364265; London: +44 208 8179301). Q1 revenue up 3.3% but operating profit behind by €9.4m

Q1 2013 revenue was 3.3% ahead of the prior year with total passengers (including Aer Lingus Regional) up 2.2% year-on-year (yoy). Fare revenue per seat was 6.5% higher yoy with short haul up 3.3% and long haul up 10.4%.Overall, passenger yield was up 3.7% with load factor up 2.7 percentage points to 71.4%.

Long-haul yield and load factor performance were particularly strong, increasing by 5.6% and 3.4 percentage points respectively.

Q1 2013 operating loss, before exceptional items, of €45.5m is €9.4m higher than the prior year largely due to Virgin wet-lease start-up costs, planned changes to the long-haul fleet and slightly weaker trading on UK routes.
Cautious outlook; profits forecast to be in line with prior year

Long-haul capacity in summer 2013 will be higher than in 2012 due to the additional A330 aircraft, which will expand services to Boston and Chicago. Short-haul capacity will be lower as a result of changes to the route network and the impact of lower gauge A319 aircraft operating certain short-haul services.

With limited visibility over booking patterns for the second half of 2013, Aer Lingus commented that 'our present level of total bookings for the remainder of 2013 is ahead of the equivalent level at this time last year. The indications are that the long haul market is strong enough to absorb the additional capacity we have introduced. Trends identified in Q1 2013, including higher airport charges, the strength of long haul and the softness in GBP and our UK market have the potential to remain a feature for the rest of the year. On that basis, we currently expect 2013 operating profit, before exceptional items, to be broadly in line with last year.' On the UK, we believe that incremental capacity from BA/bmi out of Heathrow caps unit revenue.

Commercially, an interesting development is the damp leasing of three B757 to operate on the North Atlantic service starting in early 2014 and also the wet lease of an A330 to Nova Airlines over the next two winters."

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