27/08/2009

Aer Lingus Reports Big Losses

The state-sponsored airline Aer Lingus has reported large losses due to the downturn in global travel.

The part-government owned carrier said it had experienced a big increase in losses for the first half of the year as it was forced to cut fares during the downturn.

The company's first half results, published today, revealed an operating loss of €93 million in the six months to the end of June, during what it described as "challenging market conditions".

A spokesman for the carrier said: "Trading conditions continue to be very challenging across the airline industry.

"There has been a structural change in fares and in demand for our long haul business class product in particular.

"Aer Lingus expects that the continuation of the current market trends in Ireland and its other key markets will lead to further sustained and significant fare pressure."

The collapse in air fare prices have left a major mark on Aer Lingus bottom line, as the document also reports an actual rise in the number of flyers, despite its huge losses.

Air fares have fallen by 17% on average, while increasing fuel costs have compounded the companies financial woes.

The spokesman added that Aer Lingus expected the current market trends in Ireland would lead to further sustained and significant fare pressure.

"This dynamic and very challenging environment contributes to a highly uncertain outlook," he said.

Meanwhile, Aer Lingus' indigenous competitor Ryanair is keeping up the pressure with the announcement of a €5 seat sale.

The €5 fares are available on over 500 of Ryanair's European routes but must be booked on www.ryanair.com before midnight tonight.

However, customers will need to avoid discretionary fees by paying with Visa Electron, travel with carry-on luggage only and forego priority boarding in order to fly for the advertised €5 fare.

(DW/BMcc)

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