Aer Lingus: 2014 guidance raised again after strong 3Q as unions vote for pensions progress

Aer Lingus has had another very respectable quarter, increasing its 3Q operating profit by 19%. Its North Atlantic capacity expansion continues to drive its total ASKs up at a double digit rate of growth. Although costs grew slightly more rapidly than ASKs, its revenue grew faster still in 3Q.

The new services to Toronto and San Francisco and increased frequencies on other North American routes, appear to have been well received by passengers, thanks to a combination of Dublin's geographic location, US customers pre-clearance and feed from the UK and continental Europe. Aer Lingus' North Atlantic capacity grew by 29%, traffic by 30% and fare revenue by 34% in 3Q.

The strength the 3Q results has prompted Aer Lingus to increase its FY2014 guidance, which now anticipates an operating result above that of last year. Perhaps more importantly, a staff ballot has voted in favour of a proposed solution to the pension funding issue, paving the way for improved industrial relations.