February 16, 2011
By Staff Reporter
By Andrew Bushe
DUBLIN — Having shed itself of the troubled TEAM maintenance subsidiary, Aer Lingus is now set to negotiate a strategic alliance in an effort to consolidate its position in an industry increasingly dominated by global link-ups between carriers.
The airline recorded a profit before interest and exceptional items of _46.1 million last year, but this represented a net loss of _45.9 million after write-offs, including about _85 million for the disposal of TEAM.
The company is meeting FLS Industries to finalize the TEAM takeover deal this week. The deadline for TEAM staff acceptances of the _54 million offer to buy out their letters of comfort has been extended to Wednesday.
Aer Lingus carried a record 5.3 million passengers last year, up 10 percent on the previous year. U.S. traffic was up 16 percent, London traffic up 8 percent and Continental traffic up 14 percent.
On the North Atlantic, Aer Lingus opened a fourth “gateway” last year, at Newark Airport and increased the frequency of services into Chicago, New York and Boston.
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“We are pursuing a policy of profitable growth, in the UK, Continental Europe and the U.S., ” Chairman Bernie Cahill said. “This is being achieved, in many instances, in partnership with other appropriate carriers”
Cahill emphasized that it was important that the group’s positive financial performance be seen in a broader context. “The air transport industry is a low-margin business, which means our profitability is sensitive to even apparently small percentage changes in many cost areas,” he said. “The good progress achieved would be quickly put in jeopardy if we failed to remain vigilant in this area.”
Cahill also admitted the company’s performance might have been even better if it had been seeking an alliance several years ago when a lot of them were being brokered among airlines.
“But they are still ongoing,” he said. “Some of the major alliances are being added to practically every week.