Aer Lingus holds 1Q2015 operating loss at last year's level, but FY outlook should be positive

As is usually the case, Aer Lingus reported another first quarter loss in 1Q2015. The seasonally weakest quarter is never a good guide to the rest of the year, but the good news for Aer Lingus is that its margin of loss narrowed. This was driven by healthy growth in unit revenues, which outpaced the growth in unit costs.

Nevertheless, unit costs remain stubbornly on an upward path. To a large extent, this is because Aer Lingus has been adding costs associated with its long haul expansion ahead of the stronger summer season. The growth in its North Atlantic network has been well received in the market, with strong unit revenues in spite of double-digit capacity growth.

However, the company is focusing on initiatives to reduce the level of fixed cost in the winter and has indicated that it plans to extend its CORE restructuring programme. This is to be welcomed.