Aer Lingus revises 2013 outlook, reduces full-year profit forecast

Aer Lingus Group issued (13-Sep-2013) a trading update and revised outlook statement in respect of the company's expected FY2013 operating result. In 1H2013 results released on 31-Jul-2013, Aer Lingus noted that short and long-haul forward bookings
were ahead of prior year but that the short-haul booking profile had eroded in Jul-2013 due to the exceptionally good weather conditions that were experienced. However, the trading environment at the time was such that Aer Lingus was able to maintain its guidance that 2013 operating profit, before exceptional items, would be broadly in line with the EUR69.1 million reported in respect of 2012. The carrier noted that the current booking profile for the rest of the year "suggests that despite more aggressive pricing in response to market conditions, it will not be possible to recover lost volumes experienced in July and August as a result of the warm weather". In addition, the company has forecast that "the intensely competitive pricing environment will continue to impact higher yielding in-month bookings", adding: "We intend to reduce short-haul capacity by a minimum of 3% in Q4 2013 relative to prior year". The company also noted that Aer Lingus' long-haul business continues to "perform strongly ahead of prior year despite some weakness evident in November 2013 relative to November 2012". The company explained that "some of this weakness is attributable to a distortion in the prior year comparatives due to disrupted passengers travelling in November 2012 rather than late October as a result of Hurricane Sandy in the United States. Long-haul bookings for the remainder of 2013 are currently ahead of prior year". It also noted, "The recent nature of these new market conditions means that trading visibility is limited but on the assumption that these conditions continue unchanged for the rest of the year, Aer Lingus currently expects that 2013 operating profit, before exceptional items, will be around EUR60 million. We expect that the Q3 2013 operating result will be ahead of prior year". The company also noted that Aer Lingus management is examining ways to accelerate existing plans to achieve further cost efficiencies in order to preserve competiveness and protect future profitability. It also noted that measures such as employee exits under the current voluntary severance scheme have been slowed by delays in the resolution of funding issues in the Irish Airlines Superannuation Scheme. [more - original PR]