Aer Lingus profit to hit top of forecasts

City A.M. Reporter

Irish airline Aer Lingus yesterday said it expected to report full year underlying operating profit at the top end of market forecasts provided industrial action by cabin crew and pilots doesn’t disrupt operations.

Earlier cabin crew at the former flag carrier started “work to rule” action against management plans for increased working hours at the airline by sticking to original rosters. The airline also faces a ballot by its pilots over possible industrial action.

Aer Lingus said trading in the third quarter, and in the month of September in particular, had been stronger than expected, primarily as a result of improved yields. Forward revenues suggest that October and November will also be ahead of expectations, the company said. However, bookings for December and the first quarter of 2011 appear much weaker than hoped.

“The group is not yet able to determine whether this reflects the recent trend towards later bookings or an underlying softness in demand,” Aer Lingus said.

Looking ahead to 2011, Aer Lingus said it shared concerns recently expressed by the International Air Transport Association that the durability of the current aviation sector upturn is in increasing doubt in both Europe and North America and that growth will slow in 2011.

It added that weakness in North America and Europe would be further compounded by the weakness of the Irish economy.

Market expectations for Aer Lingus’ full year operating profit range between €25m (£22m) and €29m, with the consensus at €27m.