February 16, 2011
By Staff Reporter
Last year, the airline was plunged into crisis by a drop in passenger numbers as a result of the impact of the foot-and-mouth disease crisis and the fallout from the Sept. 11, 2001 terror attacks on the U.S.
It lost euro 139.9 million compared to a profit of euro 71.6 million in 2000.
A survival plan reduced the staff by 2,000 — one third of the total — cut the cost base by euro 190 million, made radical changes in work practices and brought in a pay freeze.
The projected loss for this year had been euro 27 million.
However, Walsh said the ongoing introduction of over half of a further cost cutting program, with a target of euro 130 million, meant the company could make a profit of up to euro 40 million this year.
“There are still three months of the year to go and a lot can happen, as we have seen in previous years, in those three months,” he said last week. “We are not satisfied with the level of profitability that we are forecasting. We intend to go further.”
Walsh told the annual conference of the Irish Small Firms Association that new cuts in air fares would save business travelers euro 65 million this year.
“Our costs are going down, our fares are going down, our passenger numbers are going up,” he said. “We are ahead of schedule and that has enabled us to take this action now on business travel.”
He told the conference that over 30 percent of sales were now being made over the Internet compared to just 2 percent less than a year ago.
Last month, the airline announced it would slash the commission paid on ticket sales to travel agents from 5 to 1 percent beginning Jan. 1. It is expected to save in the region of euro 10 million a year.
Walsh said the savings from cuts would be passed on in cheaper fares for customers.
Before the cash crisis, the government had planned to privatize the airline but is now expected to seek a strategic investment partner.
Walsh said the company’s management and board are not spending time on the question of future ownership and were focused “solely and exclusively” on turning Aer Lingus around.
“It [ownership] is an issue for the government,” he said.