2021 Full Year Results commentary from Aer Lingus CEO, Lynne Embleton

Lynne Embleton, CEO, Aer Lingus, Results Commentary

Our FY 2021 performance reflects the fact that Ireland continued to impose the most stringent and longest lasting travel restrictions in Europe, and those restrictions impacted Aer Lingus more acutely than other airlines. We announced a pre-exceptional operating loss of €347m for the year. This is on top of the €361m lost in 2020.

Additionally, it reflects the impact that US restrictions had on our key transatlantic business. For almost two years, the national narrative in Ireland was intensely anti-travel, compounded by the enforcement of mandatory hotel quarantine. As a result, passenger numbers in 2021 were less than 25 per cent of 2019 levels. The reaction to the Omicron variant in terms of reintroducing restrictions at the end of 2021 also dampened the nascent recovery and was a further setback for Aer Lingus.

The scale of these pandemic impacts was such that throughout 2020 and 2021, Aer Lingus losses were almost €1m per day and the company had to take on significant debt. The demand environment is now much more positive and Aer Lingus can look forward with optimism to more normal levels of flying over the course of 2022. However, the financial damage caused to the company over the last two years will take time to repair, in particular dealing with the debt which the company has accumulated. We also need to invest in adding new aircraft to our fleet. For these reasons the company will have to carefully manage its cost base and ensure that it is efficient and competitive going forward.

Throughout the pandemic Aer Lingus sought to retain the relationship with as many of its people as possible. Government supports such as the Employee Wage Subsidy Scheme (EWSS) helped, but painfully necessary cuts in pay introduced in 2020 were required into 2021 for both management and staff. Following constructive discussions with pilots and cabin crew communities, structural changes covering pay scales and working practices to make the company more cost competitive were agreed. Similar structural change is required in other areas of the business. Aircraft were parked and sold, and work practices were made more efficient. Support staff worked from home, IT infrastructure was upgraded, and some key digital projects were realised for future benefit.

Notwithstanding the challenges, Aer Lingus remains focused on its ambition to return to 90% of normal capacity in 2022. The lifting of travel restrictions on 9th January 2022, followed by societal reopening 13 days later has had a very positive effect. AerLingus.com had its busiest day since March 2020 - customers now have the confidence to book and we are delighted to be welcoming more and more customers on board as the year progresses.

The schedule for Summer 2022 triples capacity compared to Summer 2021 and will reach 90 per cent of 2019 levels by the summer peak. Today the EI061 departed for San Francisco - the first regular service to West Coast USA since March 2020. Aer Lingus is the only carrier serving West Coast USA this summer. Daily flights to Los Angeles start on 12 May, Seattle returns five times per week on 26 May. From June, the company will operate twice daily into Washington using the latest sustainable aircraft (A321LR Neo). Last week the Miami restart was announced, bringing to 14 the transatlantic destinations out of Ireland. Transatlantic services to / from Shannon restart in March restoring critical regional connectivity. Vital for the airline, but also vital for the Irish economy.